"In a government of law, existence
of the government will be imperiled
if it fails to observe the law scrupulously."
- Justice Louis Brandeis
2. The "Backdoor" Approach
WHEN we review the justice Department's all-agency conspiracy against the Church of Scientology, one feature of the plot almost immediately captures our attention:
In their efforts to subvert the rights and immunities of the church, which they found restrictive upon their aims, the lawyers at Justice acted with specific knowledge and deliberate design to circumvent those constitutional protections.
Their modus operandi was to encourage other instrumentalities of the federal government to do the dirty work, grossly abusing the police powers vested in them. When some of these agencies moved slowly and cautiously, complaining of
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"the religious obstacle," and citing the Supreme Court decision in the Ballard case, the U.S. attorneys decided, upon their own authority to declare the Church of Scientology a nonreligion.
By thus ostensibly placing the church outside the protective high wall of the First Amendment, the Government could brand the organization a criminal activity and seek to justify their persecution of the sect as a fight against crime. This, despite the fact that in all the years of intensive investigation conducted by the combined forces of federal, state and local law enforcement, not one prosecutable offense came to light. Report after report by undercover agents sent to spy upon the church contain statements absolving the Scientologists of the offenses for which they were supposedly being investigated. Yet, being thus aware from their own probes that the monstrous charges against the church were false, the justice Department prosecutors continued to press for development of a criminal case.
In a memo dated November 13, 1962, Nathan E. Kossack of the Department of justice's Fraud Section wrote:
"The entire operation appears to be a complex hoax, involving a possible harmful device, and many persons have apparently been defrauded into subjecting themselves to the treatments. State authorities have apparently been unsuccessful in their attempts to deal with the problem.
(Deletion in FOI copy)
"We have referred all information to the postal inspectors, but due to the religious guise employed they are moving cautiously in view of the Ballard case...
"We have asked FDA to expedite its handling of the matter; they, too, have been moving slowly until now...
"We are also maintaining close contact with the Tax Division. The 'church' is presently involved in a U.S. Court of Claims proceeding in which its tax exempt status is in issue. A successful tax case would greatly enhance our chances for criminal prosecution."
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In the Internal Revenue Service, the Justice Department found an especially useful confederate, since, of all federal bureaucracies, the tax agency had exercised the broadest and most arbitrary police power, unrestrained by either the courts or the Congress. Time after time during what the late Senator Edward V. Long called "the Revenue Service's lengthy and tarnished record," IRS agents have routinely and with impunity, violated both federal and state laws.
Moreover, the revenue collectors, who claimed the authority to determine the bona fides of religious bodies for tax exemption (an act of grace, according to them) would resort to their usual "backdoor" investigative practices - electronic surveillance, infiltration of the church by undercover agents, the building of raw-data files, burglary, wiretapping, and dissemination of false reports.
The Church of Scientology case was of particular interest to the IRS for several reasons, one of the most important being that the Service was even then trying to establish legal precedents which would support its later and incredible "religious purposes test," which would fully breach the wall of separation between church and state with an official definition of religious faith.
The IRS had mounted several covert operations which were useful in penetrating not only church affairs, but other constitutionally protected activities of the citizenry as well. One of these was known as the "Case Development Unit," a pilot project aimed at gathering intelligence with which to build criminal cases against targeted individuals and groups. The programme was initially carried out in Los Angeles and later merged with the nationwide "Intelligence Gathering and Retrieval System" (IGRS).
The latter was a vast system of espionage in the classic police-state mould. It employed paid informants and secret agents to gather raw data relating to both individuals and organizations, whether they were suspected of law violation or not.
A Senate committee which later studied the operation,
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noted: "It was not intended that a specific allegation would precede intelligence gathering; rather, it would follow."
The true purpose of the IGRS was to compile computerised dossiers on people and organizations which the Government did not like, and to use this information - much of it false to degrade or destroy them. A large part of the material collected by the IRS spies had nothing whatever to do with tax. It was, rather, concerned with such personal data as the subject's drinking and sexual habits; political learnings, close associates, and so on. Elsa Suarez, an IRS undercover operative who took part in the sordid Operation Leprechaun in Florida, said: "It was like a small CIA operation."
When IRS officials were questioned under oath by Congressional committees, they revealed that the IGRS files contained 465, 442 names. Although the operation - as IGRS was discontinued in 1975, there is evidence that it has continued under other guises. For example, the Tax Resister Project is still in full swing.
In any case, it was a regular practice of the IGRS to disseminate the raw date to other government agencies, who in turn transmitted it to foreign authorities and organizations. It became a global gossip circuit.
The IRS had other programmes in progress in addition to the IGRS, all of them inquisitorial. One of these was the Special Service Staff (SSS) reorganized under the Nixon administration, but which had been operating since 1969 under the designation, Activist Organization Committee on Government Operations. The avowed purpose of this spy squad was to investigate 22 organizations in the U.S. classified as extremist, militant, or subversive. However, the list was rapidly expanded to include many other groups, including the Church of Scientology.
Some idea of the programme's broad scope may be seen in an internal memorandum which declared:
"One of our first problems is to define or to determine what kind of organization we are interested in. We have a general idea, but we have no fixed limits. " (Emphasis added.)
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Later, another staff memorandum further clarified the project's over-all objective: "What we are doing is trying to assemble all information available from within the Internal Revenue Service, from the Federal Bureau of Investigation, from the Department of Defense, from any other federal agency."
In consolidating and substantially expanding their massive intelligence files, the IRS was not particular about the way in which their information was acquired.
By devious means, some as yet unknown, a large number of documents - internal memoranda, private correspondence, banking records, etc. - stolen from the Church of Scientology, turned up in the IRS archives.
Perhaps a memorandum from Donald F. Durkin, then chief of the Revenue Service's Foreign Operations Division explains part of the mystery. Writing to the head of the Audit Division in Los Angeles, Durkin said the IRS London representative, who was in possession of some of the church's cancelled checks, would like more of the same.
"It must be remembered that we are attempting to prove Mr. Hubbard's income. He is not cooperating with us. Therefore, the 'backdoor' approach is being used. However, by the use of this method, complete and detailed verification is needed."
When Durkin complained of Mr. Hubbard's lack of "cooperation, " what he meant was that the church founder would not assist his avowed enemies in their efforts to build a criminal case against him.
It is still not known how many covert operatives the IRS has had in the Church of Scientology over the twenty-odd years it has monitored, investigated and re-investigated the sect. Church officials suspect that some of the disaffected members who secretly fed the federal agency information and stolen documents from church files were, in fact, infiltrators from the beginning of their association with the church.
One of these was Lauren Gene Allard, who became affiliated with the church in Arlington, Texas in March 1969.
Allard, who was then 28 years of age and the divorced
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father of three children, went to California almost im mediately after he became involved in Scientology. He joined the church's Sea Organization and was assigned to receive training on a ship in San Diego. His superior was Jerry McDonald who, it was later discovered, was a justice Department informant who had joined the church the preceed ing year. At the time he enrolled in the church, McDonald was in possession of a boat, The Blue Fin, which had been used previously in narcotics smuggling. Two years later he was arrested along with a narcotics ring aboard another ship, the Makaira, but was given immunity from prosecution as an informant.
After a very brief period of indoctrination under McDonald, Allard was given a job with the Advanced Organization in Los Angeles. His new position was director of disbursements in the finance section of that group. His work consisted in paying bills, and purchasing supplies for the staff.
By curious coincidence, a month after Allard entered the service of the church, the IRS reported in an internal memorandum that the agency had received confidential information concerning the church flagship, Apollo. The same memo also contained data regarding the ship Blue Fin and its operation.
Sometime around May 1, 1969, the Church of Scientology appointed Allard Flag Banking Officer. In this position, he was responsible for receiving the tuition fees paid to the Advanced Organization, and for the deposit of funds in the bank and disbursements.
Again, by odd synchronism, soon after Allard assumed his duties as banking officer, IRS mysteriously came into possession of cancelled checks and other bank documents detailing financial transactions of the church.
As a security move, during Allard's period of employment, his superior, Allen Boughton, had him change the combination to the church safe so that it would be known only by the two of them.
After less than two months in his job, Allard decided to
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leave the church, offering several different reasons for doing so. He voiced dissatisfaction with his room and salary, his food and clothing. He also complained that he had been ordered by Boughton to falsify tax records, although under cross-examination in court later, he admitted that his boss' request may have been to correct errors in the records, not to falsify them.
According to church executives, one day in early June, Allard allegedly opened the church safe and took from it a number of confidential documents, $23,000 in Swiss francs; $800 in American Express travelers checks; $2400 in Australian travelers checks; and $50 in cash. He then collected his personal belongings, both from his office and his residence, borrowed a friend's car and drove to the Los Angeles International Airport. There he boarded a plane to Kansas City, where he was to meet his girl friend, Judy Koch.
It was not until the following day that church officials learned that Allard and the contents of the safe were missing. After consulting with their attorneys, they filed a complaint with the Los Angeles police, alleging that Allard had stolen the church's money and disappeared.
Meanwhile, in Kansas City, the absconding staffer contacted the IRS district office. After he had identified himself by name, two IRS special agents were immediately dispatched to meet him in the Country Club Plaza, where he was interviewed in the agents' car. There he turned over to them the documents he had stolen from the church safe.
Two days later, Allard left Kansas City and traveled to Florida. During a sworn deposition taken by church attorneys, he was asked where he got the money to leave. He replied, "I always have money in my pockets." He also said that he had a safe deposit box in Kansas City. The following colloquy then took place between him and the Scientologist counsel:
"What was contained in the safety deposit box?"
"Cash and various personal records and things that were important to me."
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"How much cash was in the safety deposit box?"
"I don't recall the exact amount."
"Your best estimate."
"In the neighborhood of a thousand dollars or more."
"Do you recall the name of the bank?"
"No, I don't."
"Do you remember its location in Kansas City?"
"I could take you there, but I don't know the street name." "Why did you keep cash in a safety deposit box?"
"Just always did."
"Where did this cash come from?"
"My earnings."
"As what?"
"As a student."
"What was your declared income for your years as a student?"
"I have no recollection."
Allard's deposition was riddled with similar instances of memory blackout.
A warrant for Allard's arrest, based upon the church's complaint, was issued in Los Angeles. He was, at the time, in hiding in Florida, apparently under IRS protection. In a sworn statement, Allard's father said that his son told him that the IRS "instructed my son to keep on the move and to stay low regarding an outstanding warrant for his arrest issued against him for an alleged theft from the Church of Scientology Advanced Organization in Los Angeles."
Allard was eventually arrested, however, and returned to Los Angeles to stand trial. While he was in jail, he was visited by IRS agent John Daley; a member of the State Attorney General's staff; and a special agent of the FBI. All of them recorded interviews with the defector.
Allard never had to stand trial for his admitted theft of church documents and his alleged theft of church funds.
The case was dismissed on the recommendation of the Deputy District Attorney who conceded that Allard had stolen the documents, but not the money as alleged. He argued
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that the defendant's contention "that he did not take any money from Scientology and that accusations made against him by Scientology were made to discredit him appears to be well founded, or at least sufficient to raise a reasonable doubt as to the defendant's guilt."
This opinion flew in the face of a preliminary hearing, in which Judge Glenn A. Wymore found probable cause to hold Allard for trial.
As for Allard's larceny of the church records, the Government held out the novel, but legally untenable theory, that it is quite all right to steal other people's property, provided you turn the loot over to the IRS.
Once freed on the charges against him, and apparently with the encouragement of the IRS, which had made good the promise of two Kansas City agents that the Service would "pull him out of it one way or another," Allard now sued the Church of Scientology for malicious prosecution: his complaint asked for $150,000 general damages and $150,000 exemplary damages.
For the main thrust of his argument, Allard's attorney cited a church policy known as Fair Game, which had been officially cancelled by L. Ron Hubbard before Allard had any contact with Scientology. The practice of Fair Game, which, the church maintains, was never understood by the general public, was formulated in response to heavy attacks by Scientology's enemies in the early 60's. It stated that a Suppressive Person or group (i.e., those seeking to destroy the church) "may be deprived of property or injured by any means by any Scientologist without any discipline of the Scientologists. May be tricked, sued, lied to or destroyed."
While such extreme tactics against a mortal enemy are perfectly acceptable in wartime and, indeed, have been used by warring nations throughout history, they are viewed with abhorrence when practiced openly in peacetime - at least in Western societies, where appearances of good sportsmanship must be maintained.
Perhaps L. Ron Hubbard took the measure of the enemies
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who surrounded him on all sides, their daggers drawn - so to speak - for the kill. The Scientologists had been tricked, sued, lied to, and made an avowed target for annihilation. Would not turnabout be fair play (or fair game) under such circumstances?
Be that as it may, by the skillful use of this recinded church policy, and other inflammatory assertions concerning Scientology, Allard's lawyer played upon the emotions of the jury. In high dudgeon, the twelve good men and true awarded Allard $50,000 in compensatory damages and a whopping $250,000 in punitive damages.
The appeals court later found that the disparity between the compensary damages and the punitive damages suggested that "animosity was the deciding factor" in the jury's determination of the awards.
Nevertheless, the court let stand the jury's verdict and merely reduced the amount of punitive damages to $50,000.
The church took their case to the California State Supreme Court and later to the U.S. Supreme Court; but review was denied in both appeals.
Thus, as a result of his apostasy and theft, Allard was awarded $100,000.
According to internal memoranda of the IRS, some of the documents stolen by Allard from the church were "communications between persons using first names only, and appear to be the basis for an international arrangement to transmit orders to buy and sell European currencies." There was nothing illegal, of course, about trading in foreign exchange. Bankers at the time were doing it on a grand scale. If, on the other hand, IRS could show that the church was moving money out of the country through illegal or surreptitious channels, they could make a strong case against allowing tax exemption to the Church of Scientology.
That is where an IRS undercover agent known as QO-41, who had Mafia connections, proposed that he help the church establish a system of transporting money out of the country. The idea was to involve church officials in tax avoidance or
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currency law violations. His offer was made through his Mafia contact, who introduced him to Attorney Thomas Cellin then representing the church in the Allard case. Celli apparently had, in the past, represented the mafioso as a legal client in his 14W practice.
The efforts of IRS slyboots QO-41 were frustrated, however, when Attorney Celli learned that the Mafia go-between was connected with the drug traffic, and immediately severed all relations with him.
QO-41 took his instructions from and reported to IRS Agent David Forsythe, of the Service's "Case Development Unit."
Such a programme, of course, set the American system of justice upon its head. It completely subverted the established principle of Anglo-Saxon law under which an offender is punished for unlawful acts, if the offender is found guilty by a court of competent jurisdiction. It substituted an inquisitional spy-system of social control in which the Government turns loose a body of secret agents to exercise a pervasive surveillance over the citizenry, with the object of punishing those the authorities in power conceive to pose a threat to their autocracy. That is why the IRS delators and undercover operatives gathered intelligence against ideological and political groups, as well as those who challenged the inequities and unlawful enforcement of the lax laws. It is why the Church of Scientology was placed upon the "Subversives" list even though there had never been a single report worthy of credence that the church had ever been involved in political subversion.
The church had mounted an effective, nationwide campaign against abuses in government, including an operation based on the theme, "Audit the IRS". During the latter coastto-coast exposé, the Scientology activists published materials obtained under the Freedom of Information Act, which disclosed policies and practices in the IRS that the Service found embarrassing.
Documents from the files of the IRS Intelligence Division reveal that the agency suspected one of its former agents of aiding the Scientologists in an anti-IRS campaign on college
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campuses. The IRS internal report covering this activity states that "we may have to respond to the propaganda by one or all of the following methods."
It would be edifying to know the kind of response the agency planned; but the "methods" 'which the special agents were to employ were deleted from the document before it was released under the FOI Act. The IRS has resolutely refused to disclose what they were.
In the all-agency complot against the Church of Scientology, the Justice Department assigned Assistant Attorney General Mitchell Rogovin to assist the IRS in its surveillance and intelligence gathering.
At his instigation, Tax Division Attorney Michael Sanders asked the FBI to infiltrate the church "to verify unsupported allegations that the cult is experimenting with harmful drugs, encouraging immoral sexual practices and using derived form subjects' individual's [sic] personnel files for blackmail and/or extortion purposes." (Emphasis added.)
The Case-Development Unit of the IRS in 1968 was receiving sensitive data concerning the church from another undercover operative identified as IC-29 in the agency's files. He was, in fact, a private investigator, who was acting as a kind of double agent. He hired himself out to the church to conduct confidential investigations aimed at protecting the security and sanctity of the sect. To enable him to carry out his assignments, the church entrusted him with information of a personal nature regarding parishoners, past and present. These data, together with copies of his reports, paid for by the church, were turned over to IRS Special Agent David Forsythe.
By the early 70's, the IRS, together with other cooperating federal agencies, had an imposing number of informers and hawkshaws with their hands and noses in what the Service called Mr. Hubbard's "grab bag of philosophical voodooism."
The trouble was that the "pseudo- scientific religious sect" defied all efforts to pin something illegal on it - something that would stand up in court. At one point, frustrated and
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impatient to build a criminal case against the church, the federal conspirators decided to frame the Scientologists. An FBI undercover operative, assigned to work with the FDA, was instructed to plant drugs in the church's Chicago mission. When he refused, and told his superiors that he no longer wanted to work in that kind of intelligence, he was informed that he was being put on inactive status, and was asked to sign a form letter that he was not critical of the FBI or its Director.
During an interview, the spy-informer related the sordid details of his assignment:
"He [his agency contact] told me that I was going to be shifted in the pool, because a new face was needed and it needed to be a young face. And the Justice Department wanted it done immediately. This was even over the Director's head. The Justice Department was his boss. So, they are shifting me, and I know I'm going to be working for a different Department.
"They told me to go into a franchise office, which is part of the Church of Scientology in Chicago. He indicated to me that he was very interested in finding something illegal. I went into the center that Saturday night, looked over the place. I do admit that there were all kinds of people there; however, that wasn't my interest. My interest was to see if there was anything out - like drugs or anything, or any claims that were illegal to make, and so on.
"I found nothing illegal, and personally enjoyed the lecture. . . . They were interested in hearing that there was something illegal, and they wanted to hear it now. So they indicated to me that I should drop some drugs in the place. This one fellow, after leaving the office and telling me that this case has to be handled, said this is what we're going to do ... and he had the drugs with him. (This was in the car.) He said, 'I want you to go back there, and I want you to drop the stuff.'
"I sent a letter to where my payroll checks were coming out of, which was the FBI, indicating that I no longer want to work in this capacity for them. And they called me in and said,
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'Look, you're still a special employee. This is merely putting you in an inactive capacity and we want you to sign this form letter stating everyone is happy and you're not mad at the Director, and everything is fine.' "
Seven years later, the covert operative was still serving the Bureau from what is evidently a fair-sized federal fink corps, known euphemistically as a "special employee pool."
In their mounting desperation, the officials who were directing the offensive against Scientology grasped at any straw that promised a case against the church. After the circulation among federal agencies of a slanderous report by Charlotte Murphy, an attorney in the tax agency, falsely alleging "specific evidence of firearms violations by Scientologists," the Bureau of Alcohol, Tobacco and Firearms began to take an interest in the sect.
Agents of the BATF (at that time a unit within the IRS) were investigating an explosion which occurred at the Explosive Corporation of America in Issaguah, Washington, when they learned that Steven Heard, a Scientologist, was an employee of the firm.
In a telex memorandum to the BATF headquarters in Washington, D.C., the Seattle branch reported that Heard's alibi "for the time before, during, and after the explosion is his presence around the Church of Scientology." Then, the special agent added:
"Our investigation will lead us into the church and break his alibi, at which time we feel there may be some repercussion. Heard is reported to be such a radical on explosives that the only way he can get satisfaction in his mannerliness [sic] is to set off an explosive. He is reported to have a supply of explosives in his home which we understand he has conversed [converted] some to bombs ...
"We are endeavoring at this time to secure enough probable cause to obtain a search warrant for Heard's home. This may take a week, more or less."
The report went on to reiterate another completely untrue "fact" about the church:
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"We understand the church of Scientology is on the subversive list in England and would probably be classed as a militant organization..."
The agency later admitted -in a letter to Heard, replying to his inquiry under the Freedom Information Act, that the allegations about him contained in the telex report were false, and promised to remove the data from their files. The derogatory publicity generated by the BATF, however, remained in media files uncorrected.
Undeterred by the failure of their incursion into the church through the Steven Heard incident, BATF agents had another go at the Scientologists in 1973. Acting upon some unknown person's unsubstantiated allegations that Scientologists in Omaha, Nebraska had been stockpiling firearms and ammunition as part of a plot to overthrow the Government, BATF Special Agent Robert Stumpenhaus was assigned to infiltrate the church to conduct an undercover investigation.
After covertly monitoring the church's activities for a month, Special Agent Stumpenhaus reported that "at no time during this investigation was anything turned Up to indicate that the Scientology Mission or Don Hill [mission director] himself were involved in any militant activity or that they had any militant activity planned."
Despite this clean bill of health by his own investigator, however, Stumpenhaus' superior, Special Agent Thomas J. Sledge notes in his memorandum that FBI Special Agent Gary Lasotta "has been contacted regarding the overthrow of the Government, and has been advised that the ATF is closing its investigation."
Sledge also reports that he interviewed the relative of a couple who were members of the church in Los Angeles. He quotes the woman's biased opinion that "Mr. Don Hill and this church are swindling the people." He further includes in his memorandum her version of Scientology's religious beliefs.
While wholly unrelated to the avowed purpose of the BATF investigation, such statements were nevertheless fed into the
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official files to be disseminated to other agencies, thereby expanding the already massive compilation of false or misleading data concerning the church and its adherents.
In short, it is black propaganda, deliberately planted in the record by the BATF agent.
During its long years of unsuccessful assault on the Church of Scientology, the IRS has felt the inadequacy of its own spy apparatus. Responding to the acute need for auxiliary forces, the IRS Commissioner ordered District Directors throughout the U.S. to obtain information (including unsubstantiated raw data) from "local police departments, welfare agencies, licensing boards, medical societies, psychiatric professional associations. "
In effect, the order was for a kind of general exploratory search, in violation of the Fourth Amendment.
Even with this elaborate and pervasive intrusion into a constitutionally protected area, the IRS has not been able, in 20 years, to achieve a final victory - that is, to put an end, once and for all, to the Church of Scientology.
The prolonged campaign does not trouble IRS minions, who are as resolved as ever to continue their intensive investigation of the church and its members.
In one instance, at least, a court did not share the Government's contempt for reasonableness in their dealings with the church. In 1975, when ruling on a tax exemption claim by two church members, the Ninth Circuit Court took judicial notice of the situation in these words:
"We are disturbed by the length of time that the issue of the tax status of Scientology churches and ministers has been in controversy. We presume that the Commissioner will bring this protracted controversy to a close with all due haste. Certainly any continued and unwarranted delay on the part of the Government in reaching and resolving the merits of this class of tax suits may suggest bad faith on its part and the
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prospect of awards for attorneys' fees and damages under the First Amendment. We are concerned, too, over the prospect of needless litigation and appeals which have become a burden to this court,"
There is no evidence, however, that this reprimand from the bench had any more impact on the IRS than previous censure by Congressional committees and the courts.
