Freewinds

Scientology’s cruise ship the Freewinds: Why OT 8 needed to be delivered off-shore

(This article by Jeffrey Augustine was originally published on Tony Ortega’s blog and is republished here for archival purposes)

As covered in our previous article, the Church of Scientology proclaimed the imminent release of the highest auditing level on the Bridge, OT 8, in 1971. “Imminent,” however, turned out to be another 14 years of waiting before it was L. Ron Hubbard announced the release of the level in Ron’s Journal 39. Hubbard declared that OT 8 was his 1985 New Year’s Gift to Scientologists…

On OT 8, Scientologists would finally discover the primary reason for amnesia on the Whole Track — why they had forgotten most of what they had experienced in their trillions of years of previous existence. Such a huge technological advance would need a special location to deliver, and a new Advanced Org dedicated solely to OT 8. An elite team of Sea Org auditors would need to be selected and trained.

But why a ship for OT 8? We see three reasons. First, the Church was purchasing real estate in Downtown Clearwater at a pace that made the locals tense about Scientology’s plans for their tranquil seaside community. Those tensions were becoming open hostility by 1985. Second, Scientology did not have IRS tax exemption in 1985. Third, Scientology was still smarting after the FBI’s massive 1977 raid and the subsequent prosecution of eleven church officials.

Hubbard was in hiding, and he had a series of backup ranches in case he needed to flee his hiding place in Creston, California. Having a ship based outside of US jurisdiction offered the Church its own backup location. The IAS was already headquartered in Curacao and it made sense to designate Curacao the home port of the new ship. Essentially, the new ship would serve as an IAS office and fundraising center. Scientologists who visited the ship would be squeezed for IAS donations.

The undertaking to find, purchase, staff, and renovate a suitable ship was called the Ship Project, with the IAS fundraising from 1985 to 1988 to pay for the initial costs. In 1986, the Ship Project was taken over by the Flag Ship Trust. A most curious entity, the Flag Ship Trust had no jurisdiction and could only be contacted in care of Whitman & Ransom in London:

The Flag Ship Trust purchased the Bohème in September 1986. However, the way in which Scientology purchased and took ownership of the vessel was dodgy. For example, the Church of Scientology told the IRS in 1992 that the Freewinds had a mortgage on it:

[The] “Freewinds” cruise vessel: this asset has a net book value (cost less depreciation} of $15,295,000 and is subject to a mortgage of $12,500,000 held by Trust for Scientologists. The net equity in the vessel is thus $2,795,000. The vessel is owned by San Donato Properties Corporation and is chartered to Majestic Cruise Lines Inc. Its home port is Curacao in the Netherlands Antilles, and it sails primarily in the Caribbean.

San Donato Properties Corporation is a Panamanian Corporation and a subsidiary of Transcorp Services S.A. In turn, Transcorp Services S.A is owned by the Flag Ship Trust. Thus, it appears that the Flag Ship Trust conveyed ownership of the Freewinds to San Donato Properties Corporation in such a way that resulted in a $12,500,000 mortgage on the ship. This was simply moving a Scientology asset from one pocket to another in order to create a mortgage and a new owner. All of these offshore machinations created legal barriers behind which Scientology was shielded.

The new Advanced Organization created to manage and deliver OT 8 was named the Flag Ship Service Organization (FSSO). One of the initial goals of the Ship Project was to find Sea Org members who were professionally qualified to serve in key FSSO positions aboard the new ship. On the Apollo, which was classed as a private yacht, Commodore Hubbard could appoint a person Captain based solely upon their past life experiences of having captained ships. However, David Miscavige and the FSSO had a different situation. The Freewinds is classed as a cruise ship and had to meet the standards of maritime law for cruise ships. Miscavige had to find a professional Captain, navigators, electricians, deck hands, mechanics, chefs, and trained engineers for the engine room. The crew of the Freewinds had to be Sea Org as well because the FSSO is a Sea Org Org. Mike Napier was a public Scientologist who had captained ships and had masters papers. He was recruited into the Sea Org as were other qualified people. The crew of the Freewinds constitutes the FSSO. The ship itself serves as the FSSO Base.

The FSSO can also be called the CSFSSO (Church of Scientology the Flag Ship Service Organization). In its 1992 IRS application for tax exemption, Scientology made it abundantly clear to the IRS that both the Flag Ship Trust and the CSFSSO keep and bank all of their money outside of the US.

The Church of Scientology Flag Ship Service organization (CSFSSO) was incorporated in Curacao, Netherlands Antilles as a non-profit foundation in April 1988. It commenced activities on 1 May 1988, shortly before the maiden voyage of the Freewinds on 6 June 1988. Its procedures for handling its receipts, discussed below, have applied since its inception and remain unchanged today.

CSFSSO does not have, nor has it ever had, a United States bank account. None of its income has ever been banked in the U.S. CSFSSO has never provided any religious goods or services to its parishioners within the United States; rather, these activities are conducted entirely outside the U.S., from aboard the M.V. Freewinds.

CSFSSO has local bank accounts in Curacao, Netherlands Antilles, the home port of the Freewinds. CSFSSO also has U.S. dollar and foreign currency accounts in Luxembourg. CSFSSO accepts payments and donations via major credit cards (e.g. Visa and Mastercard), which are deposited in its local accounts in Curacao.|

Parishioners in the U.S. who wish to make donations to CSFSSO for religious services usually send payment by check or credit card debit to CSFSSO via the Church of Scientology Freewinds Relay Office, located in Clearwater, Florida. This is a practical expedient because the Freewinds is usually at sea in the Caribbean and its exact location for mail purposes varies. The Relay Office collects all mail and other communications destined for the Freewinds. Any currency intended for CSFSSO is converted into a U.S. dollar draft or money order; cash is never sent abroad in a mailpack because of the risk of theft or other loss. Every week, the Relay Office forwards all mail, including checks and credit card invoices, to Curacao. If the Freewinds is not in port, the mailpack is collected by a Ship’s representative and delivered to the Ship as soon as it arrives. All checks are invoiced by CSFSSO on-board the Freewinds and is deposited into local bank accounts in Curacao, as noted above.

In that same 1992 IRS filing Scientology also told the IRS about Scientologists having bounced checks:

One wonders what sort of hellish Ethics handlings OT 7’s faced when their “postulate checks” for OT 8 bounced. This amusing admission that some Scientologists write bad checks shows us that Scientology follows up to collect on them.

When the Church of Scientology took delivery of its new ship in 1986, an intense 20-month period of renovations began. Deadly blue asbestos on the ship was discovered during this period. Former Sea Org member and architect Lawrence Woodcraft wrote an affidavit on this matter in 2001. Woodcraft describes the extensive amounts of asbestos aboard the ship. An excerpt of the Woodcraft Affidavit is quite revealing about Scientology’s attitude regarding asbestos:

No one on the ship knew anything about asbestos, nor did they care… Around this time Bitty Miscavige visited the ship. She was the Church executive with overall responsibility for the ship project. I went to her and took copies of the ship’s blueprints and showed her the full extent of asbestos on the ship. At first she was calm, but as I further explained the dangers, she begun to realize that it was a problem. We had a meeting to discuss the problem of asbestos. Steve Kisacky stated that L. Ron Hubbard doesn’t state in policy that asbestos is dangerous; he only states that fiberglass is dangerous and therefore we are only removing the fiberglass. In fact, the dock next to the Freewinds was piled high with fiberglass that had been removed by Sea Org members. It was explained to me that the ship was being remodeled only according to the written policies and “advices” of L. Ron Hubbard. Since Hubbard had been in the US Navy and had then founded the Sea Org and had run a fleet of ships, he knew everything about ships. If asbestos was dangerous, he would have written this somewhere. Also Hubbard knew everything about cancer. He had written that cancer was caused by the mind and specifically second dynamic aberration (problems with relationships). I was told that people only get sick if they go into “agreement” with being sick. As the ship was going to be filled with “operating thetans” doing the highest level in Scientology (OT 8) nothing was going to make them sick. I was being a “wog” (non-scientologist) worrying about a little thing like asbestos.

International Management having decreed that Sea Org members and OTVIII’s were impervious to asbestos and mesothelioma, the renovations and crew recruitment continued apace. Scientology management’s view of asbestos offers us yet more evidence into how Scientology thinks and acts with wanton and flagrant disregard for the well-being of its members.

In our next installment we look at the immediate events leading up the Maiden Voyage of the MV Freewinds.


Declaration of Lawrence Woodcraft

Lawrence Woodcraft Affidavit about Asbestos on the Freewinds - January 24, 2001

Scientology Dictator David Miscavige In a Free Fall in Colombia Over His Fake Medal

Retired Colombian Police General Carlos Ramiro Mena Bravo presented an unauthorized medal to David Miscavige. Outrage has ensued in Colombia over giving an American cult leader an undeserved and unauthorized medal. An investigation of this insult to Colombia in underway by the authorities.

Tom Cruise recently took late night show host James Corden skydiving. The two men skydived to promote Cruise’s monster box office film Mission Impossible – Fallout. In the video, Cruise showcased his expert skydiving skills while Corden nervously fumbled his way through his first jump in which he was attached to a master skydiver with 7,000 jumps. Cruise’s landing was picture perfect as he glided effortlessly to the ground. James Corden, on the other hand, skidded to a rather abrupt stop and then did a face plant.

If anyone could use Tom Cruise’s help with a parachute right now it is Scientology leader David Miscavige, a man who finds himself in a sudden, calamitous, and unexpected free fall in the Colombian media. Miscavige appears to be headed straight down for a face plant in Colombia.

Despite decades of Scientology “safepointing” itself in Colombia, no one in Colombia is coming to Miscavige’s defense as he is being pilloried in the media for having received a medal from a retired Colombian police general who had no authority to award the medal.

Never one for modesty, Miscavige went fullblown Messiah in this bizarre award ceremony and had the general give him the medal for, “saving humanity from violence, evil, terrorism, drug dealings and all the negative factors that threaten it.” This screenshot from davidmiscavige.org tells the story of Miscavige’s runaway ego:

David Miscavige is a certifiable megalomaniac. He actually believes that he has personally saved humanity from “violence, evil, terrorism, drug dealings and all the negative factors that threaten it.” Moreover, he wanted a medal given to him at a special ceremony in recognition of his having saved humanity. This is the delusional state in which Mr. Miscavige exists.

The basis of Miscavige’s medal is a ridiculous claim the Church of Scientology’s has been making for many years now. Specifically, Scientology claims that its efforts in distributing millions of copies of The Way to Happiness brought peace and calm to Colombia and therefore paved the way for the 2016 peace treaty between the Colombian government and FARC rebels that ended a 50 year civil war in Colombia. This claim so ridiculous that it deserves nothing but scorn. Here is the claim for Scientology’s own website:


Two things to note in this story:

1. The event at which Miscavige received his medal for saving humanity took place in Bridgetown, Barbados and not in Colombia. This is the first indication that the presentation of the medal was not authorized by the Colombian government; had it been authorized the event would have taken place dockside in the Port of Cartagena where the fifty-year old Freewinds frequently docks and/or goes into drydock for repairs.

2. Aside from the retired police General Carlos Ramiro Mena Bravo, there were no Colombian government, military, or police officials at the Barbados event. The absence of Colombian officials also indicates that this was not an authorized event. The retired General Mena has been rebuked for wearing his uniform without permission and displaying the Colombian flag and other state symbols without permission. Retired generals are not allowed to do these things without explicit permission as they no longer hold office and are civilians.


When David Miscavige opened the Bogota Ideal Org on July 15, 2015 there were several Colombian officials who spoke at the event and participated in the rope pull:

L-R: Dr. Sandra Rincón, Advisor to the Ministry of Social Integration, Bogotá City; Lt. Colonel Carlos Peña, Coordinator for Anti-Drug Education, Colombian Anti-Narcotics Department; Captain John Galindo, Operations Director, Circle of Aid Technicians of Colombia; David Miscavige; Lt. Colonel Anstrongh Polania, Chief of the Department of Joint Operational Law, Ministry of Defense; and Lt. Colonel Edgar Rojas, Special Ops Commander for Rural Zones, National Colombian Police.


DAVID MISCAVIGE — FALLOUT

Now that David Miscavige is in a free fall in the Colombian media, he suddenly has no friends or allies in the Colombian government — and indeed who would come forward to defend the man given his grandiose Messianic claims? Even Colonel Ricardo Antonio Prado, long the face of the Colombian National Police in Scientology PR and at its events, including events held on the Freewinds, has not appeared anywhere to defend Miscavige:

Colonel Ricardo Antonio Prado, the long-time champion of Scientology in the Colombian National Police. Will the David Miscavige scandal force him into retirement?

Miscavige has no defenders and is instead receiving his just and due comeuppance in a barrage of negative headlines. These headlines are translated via Google:


Text of a Google-Translated Article in Colombia



Translation via Google: Controversy for awarding leader of Scientology — The ceremony was held in Barbados, for “saving humanity from violence (…)”.


As portions of this translated article from El Espectaror makes clear, David Miscavige — in his perpetual quest for self-glorification — has gotten a retired Colombian general into trouble:



David Miscavige and the Church of Scientology have badly embarrassed themselves in Colombia. However, as of the date of publication of this article, Scientology has not issued a press release stating that David Miscavige would return this unauthorized and unsanctioned medal.

As this story continues to unfold, we’re wondering how many chartered planes full of Scientology lawyers bearing suitcases full of cash David Miscavige is flying down to Colombia in an attempt make the medal legitimate. On the other hand, no amount of money and lawyers is going to persuade anyone in Colombia to legitimize Miscavige’s claims to have saved humanity.Nevertheless, David Miscavige plays for keeps. In our view, he has no intention of giving up his fake medal and it will remain on his vanity website.


In our opinion, the entire matter reeks of a caper between a retired general and Scientology. There has been a claim put forward that the general authorized the medal while he was still in office in December 2017 but that Miscavige was not available to receive his medal for saving humanity and instead waited six months. This claim to legitimacy rings false. Miscavige charters a private jet when he travels. It would be nothing for him to fly from Tampa to Cartagena for an officially-sanctioned ceremony and award when the general was still in office. Instead, Miscavige waited six months to receive the award in an unsanctioned ceremony in Barbados at the end of the 30th Maiden Voyage cruise of the Freewinds.

General Mena Bravo surely must have known there would be blowback from the Colombian government and people for him giving an official award to an American cult leader. This is why, in our view, Mena played a game in which he technically authorized the award when he was in office but then waited until he was retired to award it. Mena broke the rules by wearing his uniform and using the Colombian flag, but so what? He is well established in Colombia and will likely receive a slap on the hand for this bit of capering. Alternately, if this story doesn’t die a quick death in the Colombian media, whatever Scientology paid Mena Bravo for this caper may be discovered and publicized. This is a calculated risk Mena chose to take.


When Pope Francis visited Colombia in September 2017, he was greeted in Bogota by President Juan Manual Santos and the First Lady. Thousands of people lined the streets for the Holy Father’s procession. There was no seedy ceremony in Barbados with a retired police general.

This is how a true global ecclesiastical leader is welcomed in Colombia:

Scientology Leader David Miscavige Pays the Colombian Police for a Medal

Official Scientology Photo Caption: “On behalf of the National Colombian Police, General Carlos Ramiro Mena Bravo presented Mr. Miscavige with the Brigadier General Jaime Ramírez Gómez Inspector General Transparency Medal. In presenting the medal General Mena declared: ‘The National Police praises, acknowledges and materializes our great gratitude for all the training, motivation and respect Mr. Miscavige has given, not only to every police officer and Colombian military officer, but to every citizen that has benefitted (sic) from L. Ron Hubbard’s technology and the humanitarian campaigns he inspired… Thank you for your invaluable support in helping us build a new society and for making us part of your team.’”

David Miscavige loves wearing medals. And now it looks like the self-aggrandizing Scientology Dictator has paid the corruption-ridden Colombian Police for a medal. As reported by our good friend Pete Griffiths on Facebook, the proclamation declaring Miscavige a hero is nauseating:

The National Colombian Police presented “a medal of the highest honor to the ecclesiastical leader of the Scientology religion, Mr. David Miscavige, for “saving humanity from violence, evil, terrorism, drug dealings and all the negative factors that threaten it… In an official presentation ceremony held at the launch point and final stop of the Maiden Voyage in Bridgetown, Barbados, National Colombian Police General Carlos Ramiro Mena Bravo presented Mr. Miscavige with the Brigadier General Jaime Ramírez Gómez Inspector General Transparency Medal. The award is among the most prestigious of the National Police and represents ‘courage, bravery and honesty’ and the ‘display of the highest ideals, morals and ethical values.’”

David Miscavige is so deluded that he actually believes he deserves a medal for, “saving humanity from violence, evil, terrorism, drug dealings and all the negative factors that threaten it.” This is so completely absurd that the language itself is an indictment of David Miscavige’s uncontrollable narcissism.

The vainglorious Scientology Dictator had his fake Navy and his cash barge The Freewinds serve as props in the background to this lunatic cultic charade:

Miscavige’s attorney Jeffrey Riffer wrote a few years ago of his client:

Mr. Miscavige is the leader of a dynamic global religion expanding across five continents. His duties are herculean and accomplishments monumental.

In another letter Riffer wrote:

Mr. Miscavige is one of the great individuals of our time… He is a man of impeccable character… He has improved, enriched or saved millions of lives. He has done so
personally and through the Church’s numerous social betterment programs that he
initiated or expanded and that are available for Scientologists and non-Scientologists alike.

My Prediction: This ceremony was done for PR reasons, but primarily to serve as fodder for Scientology TV. Look for the special to air on the Scientology Cult Network (SCN) as a paean to David Miscavige. This medal from the Colombian Police serves as a companion piece to the David Miscavige self-love video in which he was praised by Colonel Prado of the Colombian Army. Never one for immodesty, Miscavige himself translated Colonel Prado’s praise:

Memo to David Miscavige: You are a truly disgusting and evil human being who belongs in prison. Here are some real heroes:

 

Billionaire Bob Duggan, the Panama Papers, and the Scientology Money Club

The Scientology Money Project did an article recently on the US Bankruptcy Court’s denial of Matt and Kathy Feshbach’s attempt to discharge $3.8 million in back taxes via bankruptcy. This led me to do further research on Matt Feshbach’s Bahamian stem cell medical company called Okyanos Heart Institute. Please see my article on Matt Feshbach and Okyanos.

In the course of my research I found Feshbach and his business partner and fellow Scientology OT Manuel Vianna listed in the Paradise Papers:

BD.1

Curious as I am about Scientology and its sources of money, I checked into Okyanos and discovered its $14.2 million dollars in capitalization largely came from a Scientologist named Ali Shawkat, a man whose father is Mudhar Shawkat, a former member of the Iraqi parliament. The ICIJ Offshore Leaks Database page on Mudhar Shawkat states that Appleby Global — an offshore law firm that some have compared to the notorious Panamanian firm of Mossack Fonseca — set up the “Passion Group S.A.” for the Shawkat family. “S.A.” is a business term meaning “Society Anonymous.” A person who owns shares in an S.A. corporation can have those shares held by an offshore law firm. An S.A. grants a certain degree of anonymity.

There were concerns at Appleby about the Shawkat money and its Passion Group S.A., this according to an internal Appleby e-mail leaked by the Paradise Papers:

According to 2008 confidential emails, the lawyer representing Shawkat and his son, Ali, asked Appleby to hold in escrow about $140 million, the proceeds of the sale of the Shawkats’ shares in a joint venture with a Kuwaiti telecommunications company. The law firm refused that request but accepted them as clients later in 2008.

Appleby set up the Passion Group Trust for the benefit of Mudhar Shawkat’s family members and registered three affiliated companies in the British Virgin Islands in 2008 and 2011, according to the files. Shawkat was identified in the Appleby documents as an “additional settlor” (a person who creates and funds a trust) of the Passion Group Trust and as a shareholder of Passion Investment Ltd., the trust’s investment arm.

However, upon the incorporation of a not-for-profit entity, which was also a beneficiary of the trust, concerns about the Iraqi family’s reported association with Chalabi [Ahmed Chalabi, 1944-2015. A controversial Iraqi politician.] emerged at the law firm. “It is suspicious,” an Appleby employee wrote in an email, “that they are setting up a charitable company offshore [Passion for Change S.A.] for funds coming out of Iraq – there does not seem any benefit other than lack of accountability in doing so.”

A Paradise Papers page on Mudhar Shawkat shows the relationships for the Shawkat family and its Passion group; there are ties to Amman, Jordan and the British Virgin Islands:

BD.Passion.Group

In a development that could portend trouble for the Shawkat’s and all other Appleby clients, Appleby confirmed in October 2017 that it had been the victim of a massive computer hack. Some in financial circles are saying the hacked information from Appleby Global will amount to a Panama Papers II. In November 2017 Appleby released a less than reassuring statement to its clients:

We wish to apologise to our clients and to our colleagues for the difficulties which have arisen from this incident. We remain committed to working with each and every client to talk to them about what has happened so that they can understand its impact on them and in order to support them with their own reporting requirements.

I note in passing that when your offshore legal firm tells you that it will help you understand the impact of it being hacked and will support you with your “reporting requirements” this is not a good thing, particularly if one has not self-reported.

Ali Shawkat and his wife Noor donated $5 million to the IAS. This was covered in a 2014 article by Tony Ortega at the Underground Bunker.

BD.2
Ali and Noor Shawkat receiving their IAS trophy for donating $5,000,000

Things were intriguing at this point so I called upon my erstwhile colleague Dr. Jeff Wasel. As Jeff and I learned from the Okyanos website, Ali Shawkat’s Passion Group invested money in Feshbach’s stem cell company:

FREEPORT, The Bahamas, March 18, 2014 – Okyanos Cell Therapy, whose mission it is to bring a new standard of care and a better quality of life to patients with coronary artery disease (CAD) using adult stem cell therapy, announced today it has raised $8.9 million in its Series B offering. Passion Group founder Ali Shawkat led the round and is a visionary entrepreneur-investor with success in a diverse set of industries including cellular services, telecom, media and healthcare.

Shawkat’s investment in Feshbach’s Okyanos is borne out by the Panama Papers’ mention that the Shawkat family invested in two medical companies:

In the following months, in 2009, the leaked files show that the Shawkats transferred more than $30 million to the family trust and one of its affiliated companies, some of which was converted into shares. Board meeting minutes of Passion Investment Ltd. chaired by Shawkat’s son show that from 2013 to 2016, the company has invested in two medical companies and in an Iraqi dealership for Peugeot cars.

On a side note to this story, Freewinds Captain Mike Napier’s son Sean Napier appears on the Okyanos website as the Director of IT & Operations:

Former US Ambassador to the Bahamas John Rood was brought in by Matt Feshbach to serve as a Director at Okyanos Holdings Co LLC. Because the Bahamian government had to pass a law allowing Okyanos to operate, Former Ambassador Rood’s contacts were undoubtedly invaluable. On a related note, John Rood is the Chairman of the Vestcor Companies Inc. This firm invests in multifamily dwellings. Scientology OT8 Grant Cardone’s firm Cardone Acquisitions follows the same business model as Rood’s Vestcor Companies Inc. This raises the question: Was Cardone introduced to John Rood via Matt Feshbach? If so, was Cardone inspired to get into investing in apartment buildings by seeing Rood’s success?

I found three UCC filings on Okyanos Operating Company Ltd. A “UCC filing” is an instrument that allows a lender to secure its interest on equipment for which they loaned money to a debtor to purchase. UCC’s are routinely used where a company borrows money to purchase expensive office equipment, phone systems, computer systems, medical equipment, etc. In the event of a default on the loan, the UCC protects the lender as it prevents the debtor from selling the equipment. The UCC also allows the lender to take physical possession of the equipment if the firm goes bankrupt. The UCC gives the lender first priority over other creditors in a bankruptcy.

The three UCC’s filed on Okyanos were filed by Prince’s Gate LLC of Santa Monica. A quick check shows Prince’s Gate LLC to be an entity owned by EarthLink founder and Scientologist Sky Dayton:

BD.8

According to news reports, Black Beret Life Sciences of Houston acquired Okyanos in a leveraged buyout in July 2017. This begs the question: Why would BBLS need to use an LBO to acquire an insolvent company? BBLS has cash. Indeed, in January 2017 Affigen announced a $17 million Series A led by Black Beret Life Sciences.

Genuine First Aid International Ltd

In the map below of the Shawkat offshore money we see a company with the innocuous name of Genuine First Aid International Ltd. A search of the Paradise Papers shows that Robert “Billionaire Bob” Duggan and Ali Shawkat to be shareholders and directors of Genuine First Aid International Ltd.:


Another Panama Papers diagram shows the relationship of Robert “Bob” Duggan with the Shawkat’s; Amman, Jordan; Beirut, Lebanon; and the British Virgin Islands via Duggan’s ties to Genuine First Aid International Ltd:

BD.5

What is Genuine First Aid International Ltd.? It is a company registered in the British Virgin Islands and based in Fujian, China. The company’s Chairman is a Danish Scientology OT8 named Michael Holstein. His Scientology Completions page is extensive:

Michael Holstein’s LinkedIn page leads to dietary supplements, vitamins, diabetes supplements, etc:

Michael.Holstein

Another Panama Papers diagram shows Ali Shawkat to be a director of Genuine First Aid International Ltd:

Yet another Panama Papers diagram shows Robert Duggan to be a shareholder of a company called Spang CM Ltd:

A more micro Panama Papers diagram shows a tighter Duggan relationship to Spang and Genuine First Aid International Ltd:

BD.9
While Spang CM Ltd. is registered in the Cayman Islands (tax identification number: 139726), the company is a Chinese manufacturing firm:

BD.Spang

The Scientology Money Club Investigation, as Dr. Wasel and I are calling it, will take a look into the intertwining  world of wealthy Scientologists and their money. We are not alleging anything untoward whatsoever. Rather, we are examining linkages amongst Scientology whales who donate big money to the IAS. That these relationships have been found in the Panama and Paradise papers is part of what Dr. Wasel and I will discuss in an upcoming podcast.

Dr. Wasel’s comments on offshore corporations:

So why go offshore? Well first, “offshore” has many connotations, and can denote both legal and illegal financial behavior. There are legitimate reasons for high net worth individuals to maintain offshore companies, trusts, and other “vehicles”, mainly to lessen one’s tax obligation or to ensure privacy in sensitive, though legal financial matters.

Other reasons include political instability or corruption in their home country, or the registration of expensive assets such as planes and boats, as well as financing the associated insurance costs. Lawful tax avoidance involves organizing one’s financial affairs to legally minimize the amount of tax to be paid, versus tax evasion, which involves hiding one’s assets altogether, from the responsible reporting authorities.

Large corporations such as Apple, Google, and others use favorable tax regimes in Ireland as an example of tax mitigation/avoidance, as do individuals in the Caribbean, Liechtenstein, Switzerland, and other “tax havens”.  These “Offshore Financial Centers” (OFCs) exist primarily to provide anonymity and tax regimes favorable to the investor and not the regulator; where the illegality occurs, is when an individual or entity fails to declare an interest in an OFC to their respective nation’s tax authority or financial regulator. The use of OFCs is significant; while verifiable data is difficult to collect, it’s estimated that some 20 percent of all private wealth is located in OFC’s, as is an estimated 75 percent of the captive insurance market.

The nexus of the OFC phenomenon is geography. In other words, “sunny places for shady people” to some extent, though the post-9/11 regulatory environment has drastically altered this perception. Indeed, The Cayman Islands, Bermuda, and other former “light touch” OFC locales, now often exceed US and EU anti-money laundering and tax reporting requirements.

That said, many significant loopholes exist in the structure of OFC’s, loopholes that, in a variety of ways, are structurally resistant to regulation, and still offer the less-than scrupulous individual or entity plenty of ways to create private banks, phantom or “shell companies” and fake trusts, and to hide money and other assets. One such option within this structure is the use of “bearer shares”, a term often reflected in the associated charts in this story. Implicit in the many OFCs available to the “sophisticated” investor, is the International Business Company, (IBC), which is a corporate vehicle that can be owned anonymously, and does not do business in the country where it’s domiciled (has physical residence), and usually located in an extremely “light touch” regulatory and tax locale. An IBC can be created online in less than an hour, involves minimal regulatory and ownership filings, and has limited liability. It’s unrestricted in the type of business it can entertain, and an IBC can consist of multiple sub-entities, complicating any future audit trail.

The main ownership stake in an IBC is a bearer share, which simply means that if you physically own the shares, you own the company, yet nowhere is it recorded that you physically hold them. In essence, the IBC is a truly “portable company”, allowing one to schlep a veritable business empire in one’s briefcase.

Adding to the attractiveness of portability, is a lack of accountability, in that most IBC’s allow for “nominee” directors; that is, hired-hand “directors”, who are usually employees of the registering agent, say a corporate registration house in Curacao. Thus there is no “official” record of who owns the bearer shares, and therefore, the company’s beneficiaries, nor is there any direct owner – a responsible fiduciary –  that can be held responsible for the company’s actions. While a more thorough discussion of all the permutations of this murky financial world is beyond the remit of this article, suffice to say, it’s the concepts of “plausible deniability” and anonymity, as well as the ability to hide one’s financial affairs,  that is the greatest lure to go offshore.
_____________________________________________________________________________________

Here is the Appleby Global document on the creation of the Shawkat’s Passion Group Trust. Hover over the document with your mouse to invoke the control panel at the bottom of the PDF:

Shawkat-2011-Passion-Group-Summary

How Scientology’s 1970s infiltration scandal led to the creation of its IAS slush fund

(Authored by Jeffrey Augustine, this essay was originally published by Tony Ortega at the Underground Bunker and is reprinted here for archival purposes)

July 8, 1977: The FBI conducts a massive raid on the Church of Scientology to find evidence relating to its “Snow White Program.” The raid eventually leads to eleven top Scientology leaders being criminally charged and convicted for their role in the conspiracy to burglarize federal offices.

SEFThese Scientology defendants, including Mary Sue Hubbard, wife of Scientology’s founder, L. Ron Hubbard, needed a great deal of money for legal defense. So in 1978 Scientology’s notorious Guardian’s Office created the “Safe Environment Fund” (SEF) to pay for the significant legal expenses of the GO members who had been indicted. Essentially, the SEF was a GO legal slush fund that generated a significant amount of unrestricted donations.

The GO could spend the money on almost anything broadly related to the defense of the Guardian’s Office members. This included funding private investigators to engage in spying and dirty tricks. Even as the GO became the precursor of OSA, the SEF became the precursor of the IAS.

One of the more notorious church operations likely funded by the SEF involved the private investigator Richard Bast, who was hired to find dirt on Judge Charles R. Richey.

After the Snow White Program was busted up, nine top Scientologists, including Mary Sue, were indicted and faced trial. (Two more, Jane Kember and Mo Budlong, first needed to be extradited from England.) Two judges recused themselves from the case before Richey took it, and then, in the summer of 1979, he traveled to Los Angeles to hold trial. After the defendants stipulated to evidence submitted by the FBI in return for the dropping of all but one charge against them, Richey found them guilty and prepared to sentence them. Bast, meanwhile, swung into action. He found a US marshal who had traveled with Richey to LA who told Bast that the judge had paid for prostitutes. Bast fed the information to columnist Jack Anderson, and Richey recused himself — but not before he’d sentenced Mary Sue and other initial eight defendants to prison sentences, most of about two to four years.

Bast was paid $321,000 and $84,000 in expenses for his work, which, adjusted for inflation, would be about $1.2 million today. In his book The Unbreakable Miss Lovely, Tony Ortega describes Bast’s operation not only against Judge Richey, but also against Paulette Cooper, who was duped into being hired by Bast under the pretense that the private eye was working for a Swiss millionaire who wanted to expose Scientology.

And Bast orchestrated one other nefarious caper designed to destroy an additional judge. Vicki Aznaran, the former President of the Religious Technology Center (Scientology’s nominally controlling entity), revealed this particular Bast caper in her declaration of August 9, 1998:

Dick Bast secured a yacht and attempted to get the judge on board for the purpose of filming him under compromising circumstances. The judge declined to go yachting and the operation was unsuccessful. Approximately $250,000 was spent on the operation.

While the US Government and the media took serious note of Scientology’s hardball tactics and willingness to spend vast sums of cash to smear a US Judge, so did a ruthless twenty-year-old Sea Org member named David Miscavige. While Miscavige was not a part of the Guardian’s Office, he was at this point handling some of L. Ron Hubbard’s more urgent problems.

When it became apparent that the GO defendants were going down in flames, the Church decided it was best to avoid a messy public trial in which Mary Sue Hubbard and the other defendants would be cross-examined at length on the record, and that’s why they signed the stipulation of evidence mentioned earlier.

Mary Sue appealed her prison sentence using SEF money while she remained in control of the Guardian’s Office. Meanwhile, L. Ron Hubbard went into hiding in February 1980 and remained in hiding until his death on January 24, 1986. Mary Sue never saw or heard from her husband after he went into hiding.

Although the Snow White Program had become a colossal train wreck, L. Ron Hubbard’s goal to eliminate, by all means possible, the legal threats against himself remained unchanged. In 1981, Hubbard effectively transferred the goals of the Snow White Program from the Guardian’s Office to a newly created entity called the “All Clear Unit.” David Miscavige was a prominent figure in this unit. During this period, Miscavige was able to force Mary Sue to resign as Controller of the Guardian’s Office and force her into exile and house arrest.

In the power vacuum created by the collapse of the Guardian’s Office and Mary Sue’s fall from grace, the Office of Special Affairs was created in 1982. The GO’s intelligence and Fair Game functions, and many of its personnel, were transferred into OSA. The Snow White Program’s “Programs Op” Linda Hamel was among the GO personnel relocated into OSA. Linda Hamel is now the Commanding Officer of OSA International.

By April 1982, Mary Sue Hubbard had exhausted her legal appeals. On January 7, 1983 Mary Sue was sentenced to four years in prison (she actually served only a year):
MSHSentence

With the final Snow White Program defendant behind bars in 1983, the Guardian’s Office-tainted SEF had served its purpose. As with all people and things in the Church that have outlived their usefulness or have become a PR liability, Mary Sue Hubbard, the GO, and the SEF were, in L, Ron Hubbard’s words, “disposed of quietly and without sorrow.” Mary Sue’s name was even purged from the 1978 edition of What Is Scientology?

The Snow White Program and the SEF had taught the Church a very valuable lesson: Having a large slush fund that was legally autonomous from the Church was a very important resource to possess — particularly given Scientology’s penchant for vicious Fair Game tactics that were either on the edge of law or crossed over into illegality.

This lesson was particularly relevant to David Miscavige. Indeed, about one year after Mary Sue’s incarceration in a federal penitentiary, Miscavige learned that both he and Founder Hubbard were the subject of an investigation by the IRS Criminal Investigation Division (IRS CID). Miscavige needed to move fast to kill this looming IRS CID investigation. Therefore, just as the Church had dismantled the Guardian’s Office on paper and resurrected it as the Office of Special Affairs, the SEF was also resurrected as the International Association of Scientologists (IAS). As the old French proverb states, “The more things change the more they remain the same.”

With its usual sense of overblown grandiosity, the Church evoked the signing of the US Declaration of Independence when it created the IAS in October 1985, or “AD 35” in the “After Dianetics” Scientology calendar created by Hubbard. Held at Saint Hill, the event included a ceremony that featured “delegates” using a quill pen to sign a “Pledge to Mankind” printed on parchment.

After having been unceremoniously kicked out of Saint Hill at thirteen years of age for having slugged his female preclear during an auditing session, David Miscavige made a triumphal return to “Ron’s home” in 1985 as a signatory on the IAS Pledge to Mankind. Pictured below, Miscavige is seen front row center in his red tie:
SaintHillMiscavige

True to form, Miscavige rolled out the IAS by stating that the previous membership organization, the “International Membership” program that was sold to Scientologists between 1977-1984, was illegal and off-source. See underlined text in this excerpt from Scientology Policy Directive 104R of 31 October 1985:
IASRulesScientologists were told to cheer for the on-source IAS as it was a “war chest” beyond the reach of the evil IRS.

Just how beyond the reach of the IRS was the IAS?

Shares of the IAS were held in trust by two individual Scientologists: Carl Heldt and Maureen Brigatti. These shares, in turn, were held in trust by the shadowy Curaçao Trust Management on Curaçao. President of the IAS Janet Light owned 1 percent of the shares and these were ultimately held in trust by the murky Theta Management Ltd. on Cyprus:
IASOwnership If you cannot follow the chain of IAS ownership it is because no one is supposed to be able to follow it. Theta Management LTD. was dissolved in 1993 and its functions transferred to the IASA. Presumably, the shares held in trust by Theta Management were transferred to the IAS to be held in trust. Curaçao Trust Management (CTM) still plays an unknown role in the IAS. For many years, the IAS was purportedly based aboard the M.V. Freewinds and was thus considered a “non-situs” trust, meaning it had no fixed location.

As previously covered, the IAS domesticated in 2007 and became a Delaware corporation. This may have been due to two events. First, new and stricter US laws went into effect for American companies and individuals holding offshore assets. The US Government was cracking down on money laundering and money that could be used to fund terrorism. Second, it seems that Curaçao Trust Management was becoming increasingly involved in managing online gaming monies. The IAS perhaps may have wanted to distance itself somewhat from CTM and its owner the Dutch tax lawyer and Curaçao national Englemindus George Praag. One of the most shadowy figures in the “shadow side” of Scientology, George Praag goes back decades with the Church.

The Snow White Program was clearly a case of Scientology turning lemons into lemonade, or in this case felonies into a billion dollar slush fund. As mentioned in our previous article on the IAS, CO OSA Linda Hamel is a trustee of the US IAS Members Trust. Thus, Scientology’s spy boss has access to a pile of money to, say, pay lawyers to pay private investigators to pay other private investigators to hack the email accounts of Scientology critics and ex-members.

Documents filed in the Garcia vs. IAS et. al. lawsuit yielded an intriguing item. Buried in the back pages of one filing provided by the Church was a bad photocopy of CO OSA Linda Hamel’s driver’s license. At last, a photo of Linda Hamel:
Linda_Hamel

 

FSSO: Church of Scientology Flag Ship Service Organization IRS 990-T, 2006-2012

Church of Scientology Flag Ship Service Organization IRS 990-T, 2006-2012

FSSO Book Value 2012: $26,705,235

FSSO Book Value 2011: $28,154,721

FSSO Book Value 2010: $29,518,595

FSSO Book Value 2009 Not Reported

FSSO Book Value 2008: No 990-T on Record

FSSO Book Value 2007: $24,069,621

FSSO Book Value 2006: $18,841,604