Cult Paradox: Why Scientology Is Collapsing As a Function of Its Burgeoning Real Estate Empire

The Church of Scientology is so heavily entrenched in Downtown Clearwater that it has become harmful to the community. Scientology does not pay taxes on its huge portfolio of tax-exempt properties in Clearwater and yet demands police and fire services, uses the roads, freeways, and other public infrastructure. Worse, Scientology has driven businesses, redevelopment, and tourism dollars out of Downtown Clearwater, thus further depressing the economy and tax base of Clearwater. In 2017, Scientology even announced its brazen plans for what amounted to a hostile corporate takeover of Downtown Clearwater. The details are quite alarming as can be seen in an excellent and highly detailed article by Tracy McManus of The Tampa Bay Times.

Compounding matters, John P. Capitalist recently noted that many public Scientologists are moving out of Clearwater, Florida to escape the never-ending onslaught of Scientology regges. In  Scientology “registrars” are called “regges” and are actually salespeople. All across Scientology, the regges demand donations on a daily basis. It is very bad in Clearwater and Los Angeles where the largest concentrations of Scientologists live. John P. wrote of the public Scientologists in Clearwater:

…I’ve heard from several sources that a number of longtime members have moved out [of Clearwater] in order to avoid visits from desperate “regges” in the middle of the night ringing the doorbell and demanding cash. They’re claiming to be moving for innocuous reasons like “to be closer to the grandkids,” but apparently they’re just tired of the stress and want to deal with the cult from a distance. It’s not clear how many people are making the move, but even a few sure makes it sound like the rank-and-file (all those dentists, chiropractors and small business owners) are reaching a saturation point.

It is quite true that Scientology regges do show up unannounced at any hour of the day or night at the homes and businesses of public Scientologists to demand money. I personally know dozens of former Scientologists to whom this happened. In many cases, when the public Scientologists refused to answer their front door, the rampaging regges went into backyards and beat on the patio doors in an attempt to flush their quarry from hiding. Deplorable conduct but it is nevertheless true.

As Scientology regges are usually Sea Org members, public Scientologists who treat them rudely or object to their intrusive tactics can get in very serious trouble with the Church for doing so. These salespeople are deemed to be helping “Clear the Planet” and so their unwanted intrusions are considered justified by Church management. For this reason, public Scientologists have taken to refusing to answer their doors and have stopped answering their phones as a means to avoid the greedy Scientology fundraisers. These hapless public Scientologists choose to hide as they know the regges have complete immunity to engage in predatory and intrusive tactics that include invading the privacy and sanctity of one’s own home.

John P.’s observation of the flight of public Scientologists from Clearwater led me to create this simplified graph and the accompanying commentary:

J. Swift’s Scientology Real Estate Axiom #1: The more real estate the Cult of Scientology owns in a given area, the more public Scientologists will flee the area, refuse to accept regging phone calls, attend regging briefings, or accept unannounced and intrusive home regging visits. This “Public Scientologist Money Flight” occurs as a function of an ever-increasing number of Scientology fundraising personnel occupying buildings that contain competing Orgs, Scientology front groups, and Scientology fundraising programs.

In practice, each new piece of Scientology real estate becomes a standalone business operating unit within the Scientology corporate structure. These standalone operating units are called “Orgs” or “Social Betterment Groups” and each has its own weekly fundraising quotas.  Scientology also has fundraising programs for both current and planned programs. These fundraising activities also have weekly financial quotas. All of these separate business operating units result in intense competition within Scientology for a shrinking pool of donations.


As a condition of receiving tax exemption, US tax law requires religious tax exempt organizations to spend money in the public benefit. For example, if Catholic churches  provide free services to the homeless this is seen as helping to reduce the tax burden on the US Government. Hence, tax exemption is viewed as a form of exchange. L. Ron Hubbard, however, taught that giving anyone anything for free was wrong. Hubbard said charity was “rewarding a downstat” as it rewarded people for doing nothing. Hubbard’s 1950’s view of poverty was that poor people were lazy; did not want to work; were worthless; and only wanted free welfare checks and handouts.

Hubbard’s 1950 view of poverty became Scientology doctrine. Given Scientology’s doctrinal refusal to engage in charity, the only things Scientology can actually spend its money on are real estate, self-promotion, and financing its perpetual state of warfare with those people and groups it deems enemies. This spending plan results in the Scientology we see today: A self-aggrandizing, angry, paranoid, and hostile cultic group characterized by its bloated real estate holdings and its insane and lavishly-financed wars against former members, critics, the media, and those governments that oppose Scientology and correctly see it as a for-profit business.


The endless purchasing of real estate by Scientology is paradoxically and ultimately self-destructive as it acts to exponentially increase fundraising pressures amongst competing Scientology business units while simultaneously driving membership and donations out of the Church. Scientology incessantly boasts that the growth in square footage it owns proves Scientology is growing. However, this is a misdirection. While Scientology’s real estate portfolio is indeed growing, the Cult quietly sweeps the real story of its shocking membership decline under the rug.

Scientology’s Ideal Org program was a debacle which proved that the more real estate Scientology purchases and accumulates, the fewer members it will have. The Ideal Org scam drove untold thousands of people out of Scientology due to incessant fundraising demands. Likewise, the Basics book campaign was a giant $100,000,000+ cynical money grab that saw legions of people leave Scientology.

The pointless accumulation of real estate by Scientology is a function of its tax exemption and L. Ron Hubbard’s policy that endless fundraising must occur. What Hubbard called “new money” must be brought into the Scientology each week. The smallest possible portion of this “new money” is spent paying expenses. Hubbard mandated that the remaining money be locked away in untouchable reserves. Hubbard purposely designed Scientology to generate large cash reserves. This is why Scientology’s main focus is on money. Because the IRS does not allow excessive capital accumulation by tax exempt entities, however, Scientology spends part of its reserves on the items described above.

Scientology also spends the minimum amount of money possible on its Sea Org labor force. Sea Org members live far below the US poverty level of $13,860 in annual income for an individual. Legally speaking, Sea Org members are not employees and are classed as religious volunteers. As such, they receive a meager weekly stipend of $50, usually less, plus room and board. Scientology’s goal is to spend the least possible amount of money on Sea Org members while demanding the maximum amount of production. Sea Org members routinely work 80-100 hours per week. A Sea Org work week is six and one half days in duration.  One half day is given to do laundry and clean one’s berthing area. Scientology’s slave labor program also applies to the child labor Scientology uses in the Sea Org.


As an illustration of my premise, Scientology’s Flag Land Base in Clearwater, Florida has numerous Orgs, Scientology front groups, and  fundraising programs that compete with each other daily for an ever-shrinking volume of donations. Here is what a Scientologist can be expected to donate to, or pay for, on a trip to Flag Land Base; this list is not exhaustive:

1. Flag Service Organization — Mandatory donations for auditing services and courses
2. The International Association of Scientologists — Scientology’s multibillion dollar slush fund
3. Lodgings at one of the several Scientology-owned hotels
4. Meals at one of the several Scientology-owned restaurants
5. Citizens Commission on Human Rights — The rabid anti-Psychiatry component of Scientology
6. The Way to Happiness Foundation — A Scientology Front Group
7. Youth for Human Rights — A Scientology Front Group
8. United for Human Rights — A Scientology Front Group
9. Foundation for a Drug Free World — A Scientology Front Group
10. Applied Scholastics — A Scientology Front Group
11. Criminon — A Scientology Front Group
12. Volunteer Ministers — A Scientology Front Group
13. The Basics Book Campaign — Fundraising to put L. Ron Hubbard’s books into libraries
14. The Ideal Org Campaign — Fundraising to buy more real estate called “Ideal Orgs”
15. The Archival Project — Fundraising to store L. Ron Hubbard’s works in nuclear proof vaults
16. Advanced Payments — Scientologists are asked to donate money now future services later
17. The L. Ron Hubbard Hall — a planned auditorium in Clearwater


Monastery Scientology is a term I coined in 2008 when I predicted that Scientology will be drained of its middle class parishioners and become a haven for only the wealthiest of Scientologists who can afford to stay in the game. Monastery Scientology is becoming inevitable as only the wealthiest and most status-obsessed Scientologists will remain in the Cult of Scientology.

At present, the Cult is in a Palace of Versailles phase in which wealthy Scientologists vie for David Miscavige’s attention and favor as signified by a competition for larger and gaudier IAS statuses and trophies. These statuses and trophies require wealthy Scientologists to increase ever-larger amounts of cash to Scientology.

The prime example of failure in this pointless Palace of Versailles status race was Scientologist Richie Acunto. After donating ten million dollars to Scientology, his Survival Insurance company went bankrupt. And to his ignominy — and that of Scientology —  Richie’s ten million dollar IAS trophy languished in a storage locker. When Richie failed to pay rent on the storage locker, its contents were sold at auction. Richie’s $10,000,000 trophy was sold on eBay to the highest bidder. The Church of Scientology was likely the highest bidder as the Acunto trophy has never been seen since it was sold on eBay. Again, another inconvenient matter swept under the rug. Richie Acunto has been long forgotten by Scientology.

This Palace of Versailles phase is characterized by a never-ending series of useless galas awash in flimsily contrived stories of imagined Scientology global triumphs, wildly inflated and nonsensical statistics, and garish trophies and awards. One of Scientology’s more patently absurd claims is that the mere distribution of its insipid Way to Happiness booklet reduced crime in Colombia by 50 percent.

In the terse no-nonsense language of American corporate life these events can be correctly described as circle jerks.

Church of Scientology: 385% Profit Margin on E-Meters

The dishonest and greed-driven Church of Scientology purchases dubious “experts” as needed to bolster its phony claims. For instance, the late Colonel L.  Fletcher Prouty took a big Scientology payday to argue that L. Ron Hubbard’s military records were “sheep-dipped” and that Hubbard had actually won 27 war medals including two Purple Hearts. The fact is that Hubbard never saw one day in combat and was never wounded in combat. Aside from his mere assertion that Hubbard’s records had been sheep-dipped, Prouty absolutely failed to ever produce even one shred of evidence to back up his opinion concerning Hubbard’s military records. To give the reader an idea of the profundity of Prouty’s larger intellectual deficiencies, he denounced both Evolution and Heisenberg’s uncertainty principle as being amongst, “the greatest propaganda schemes ever put forth by man.” This can be found in Prouty’s controversial book Beyond Our Consent, Secret Power, Deception, Abandonment of Freedom in America.

The Church of Scientology has also funded, sponsored, entertained, cajoled, or otherwise persuaded certain credulous and weak-headed religious scholars to turn a blind eye to Church cruelty and greed in favor of embracing a dubious construct called New Religious Movements. This flawed construct favors cults at expense of their victims. These religious scholars have written sanitized fantasies defending Scientology as a valid new religious movement. The erstwhile Scientology crypto-apologist J. Gordon Melton certainly comes to mind as the foremost member of this class of pliable religious scholars.

When the Church of Scientology was working to get tax exemption from the American IRS,  it hired several commercial pricing experts to comment on its pricing policies for its books, meter, and jewelry. This was necessary to rebut the IRS’ claim that the Church’s pricing structure was purely, and only, designed to obtain maximum profits on everything it sold: Books, meters, jewelery, and services.

These pricing experts were then quoted in the written pre-exemption responses the Church furnished in response to hundreds of IRS questions.

In what is a completely bizarre comment shown below, pricing experts Dudley Smith and Cruzen Alexander evaluated e-meter pricing and concluded that  the Church’s 385% price mark up over the manufacturing cost of the e-meter was acceptable. Said another way, the Church of Scientology has a 285% profit margin on e-meters. Note: there is a difference between a price mark up and profit margin. Please click here for more information.

Meter.PricingIn my three decades of corporate sales and management, I never once heard of an astonishing 300-400% price mark up over the manufacturing cost of an item. This would be like manufacturing an item for $100.00 and then marking it up to a sales price of $500.00.  Unless one has an unchallenged monopoly on an item, the simple fact of competition will not allow an exorbitant 400% mark up on any item, particularly given the fact that global manufacturing capacity far outstrips demand in virtually all manufactured goods. A more typical mark up for an item that costs $100 to manufacture would be to use a 100% mark up. In this case, the sale price would be $200 and the gross profit would be 50%. This would allow a steeply discounted sale price of $150 to yield a very healthy 33% profit margin — and this was what the entire pricing exercise was designed to do: Trick consumers  and end users into thinking they got a smoking hot deal at 50% off list.

The facts are blatant: The Church’s monopoly on its e-meter allows it to demand an obscene 285% profit margin on the retail price of its e-meter. In my opinion, the Church’s so-called pricing experts appear to have used 1950’s pricing models in which unrealistic pricing mark ups were used only as the price from which to begin discounting. This was a stratagem or a ruse designed to allowed sleazy companies to offer what appeared to be very steep price discounts. In actuality, it was usually an attempt to use cheap flattery to convince customers into thinking they were receiving an enormous discount because they were so important. The ridiculous and irrational pricing structures of the 1950’s have all been replaced by consumer contracts of adhesion laden with dishonest and deceptive small print, the net effect of which is to massively price gouge customers by locking them into sleazy contracts for 2-3 years. Think cell phone and credit card contracts.

After admitting to the IRS that it takes a monopolistic and extortionate 285% retail profit margin on the very e-meter required for spiritual salvation in Scientology, the Church then takes a great deal of pride in noting that IAS members pay 20% less for the meter. Imagine the nerve of the Church of Scientology: IAS members are price-gouged for a 208% profit margin on the meters necessary for their spiritual salvation. My thinking is that the profit margin on the new Ultra Mark VIII is even higher.

Shown below, the 1993 filing offers a cost breakdown of the e-meter. This breakdown nicely confirms Marc Headley’s estimate that the Mark VII and Quantum e-meters cost about $400 each to make at Golden Era. This cost breakdown further shows  a royalty of $426.10 taken on each meter. Again, this is pure greed and hypocrisy: Given that L. Ron Hubbard donated all of his works to the Church, why must a royalty be taken by the Church on anything Hubbard donated?


Supporting document from the Church of Scientology’s 1993 submission to the IRS. This section of the document discusses Church pricing and profit policy on books, meters, and jewelry. Note: Please hover your cursor over the document to invoke the page up/page down controls at the bottom of the document.