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FOR THE COUNTY OF LOS ANGELES

DEPARTMENT NO. 57        HON. PAUL G. BRECKENRIDGE, JR., JUDGE

  (See Appearances page.)

VOLUME 10

Pages 1564 - 1739, incl.

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APPEARANCES:

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WITNESS

EXHIBITS

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-o0o-

THE COURT: All right, in the case on trial, let the

record reflect that counsel is present. Mr. Armstrong, you

may retake the stand.

GERALD ARMSTRONG,

the witness on the stand at the time of the adjournment,

having been previously duly sworn, resumed the stand and

testified further as follows:

THE COURT: Just have a seat. State your name again

for the record, sir. You are still under oath.

THE WITNESS: Gerald Armstrong.

THE COURT: You may continue, Mr. Flynn?

MR. FLYNN: Thank you, Your Honor.

THE COURT: Did you have something, Mr. Harris?

MR. HARRIS: I just have a brief item, Your Honor. I

checked. There were two items requested yesterday. In

any event, we checked.

There is the COLED 824 LRH biography plan which

we think probably was produced to the defense previously,

but in any event here it is.

THE COURT: All right.

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MR. HARRIS: With respect to the alleged letter to the

founder, Mr. Hubbard, of the non-existence formula by this

witness, there is no such thing. We were not able to find

it. And we have access to all the materials, as far as we

can tell, that he had in his area.

THE COURT: All right.

DIRECT EXAMINATION (Resumed)

BY MR. FLYNN:

Q Mr. Armstrong, do you recall that your testimony

that when you boarded the Apollo and prior to joining Sea Org

it was represented to you that Mr. Hubbard had resigned from

all managerial or supervisory posts of the Church of Scientology

in 1966?

MR. HARRIS: I do not believe that was his testimony.

THE COURT: I don't recall anything like that.

Q BY MR. FLYNN: Were any representations made to

you about Mr. Hubbard's position, first, within the Church

of Scientology prior to your joining the Sea Organization?

A The only -- the only thing that comes to mind

was the fact that he was the -- the Sea Org worked directly

for Ron.

Q After you joined the organization and boarded

the Apollo were representations made to you that he had

resigned from any position, manager, or director or officer

of any Scientology organization?

A No.

I did read what is called, I believe, the

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but it would have been in 1966 in which something to that

effect was written. But it was completely obvious to me and

to everyone else on board that Mr. Hubbard was completely

engaged in management on a day-to-day basis. So nothing like

that ever came up.

MR. LITT: That is his opinion, I take it, Your Honor?

We certainly don't have a foundation.

THE COURT: It is nonresponsive; everything after he

saw some Guardian policy memoranda, I'll strike everything

else.

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Q BY MR. FLYNN: Now after you became the ship's

representative, were questions asked of you as to what

Mr. Hubbard's position was in relationship to the Church of

Scientology?

A I don't believe that I ever fielded that

question. I was drilled on that subject.

Q All right, and how were you drilled on that

subject?

A The answer was that Mr. Hubbard had resigned

as a director in 1966 and was no longer engaged in the management

of Scientology organizations.

Q And will you explain the circumstances under

which that was drilled?

A There were a number of questions and areas

which were included in briefing packs of materials to do with

the ship, to do with Scientology, to do with Mr. Hubbard,

and that was included in that pack of materials as an answer

to the question on his control.

Q Now, were those briefing packs given to everyone

who came on board the ship?

A Not necessarily that -- the complete briefing

pack.

Q Was a briefing to the effect that L. Ron Hubbard

had resigned all managerial roles in the Church of Scientology

given to everyone who came on board the ship?

A No.

Q Under what circumstances were those briefings

given?

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A You mean to do with the subject of --

Q Of L. Ron Hubbard's status in relationship to

the Church of Scientology.

A Well, those on board, and I can definitely

speak for myself, knew that he controled the operation on

board and outside the -- in other organizations around the

world, and it would be ridiculous for me to be briefed that

he was not.

The briefing that I am referring to is what I

would brief to inform others. I was in the particular

position of dealing with a lot of local officials, a lot of

local press, and with people who might show up at the ship

from other organizations without being invited in, people

who sought to talk to Mr. Hubbard, for example.

So, it was in the context of drilling to be

able to handle those sorts of public that I would state

the story that he had resigned as a director.

Q Now, during the period that you were on the

Apollo did you have the opportunity to observe Mr. Hubbard's

position in relationship to the Church of Scientology?

A Yes.

Q And what did you observe?

A That he controlled it.

Q And in what --

MR. HARRIS: May that be stricken as a conclusion,

Your Honor, without an adequate foundation?

THE COURT: Well, I will have to strike that.

Q BY MR. FLYNN:what specific activities did you

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relationship with the Church of Scientology?

A There were two aspects to it. The first was

an on-board aspect, and the second was a managerial aspect

of outer Scientology organizations.

On board he was in control of every aspect.

His messengers ran messages from him and ran orders into the

galley, into the engine room, into the port captain's office,

into the legal bureau, into the ship's operation when we were

at sea, when we were in port. I observed the messengers

running those messages.

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I received orders from Mr. Hubbard throughout

the four-plus years that I was on board. And I saw on an

international basis, I saw evaluations which were done by

Mr. Hubbard, orders which were issued by Mr. Hubbard,

telexes from Mr. Hubbard to organizations internationally.

I saw the mail which arrived to and from

Mr. Hubbard. And from, that I was able to draw a fairly

good conclusion that he was in control.

Q Now, when you went on board the Apollo do

you recall your testimony that you were working for a

corporation called Operation Transport Corporation?

A Yes.

Q Between the time that you worked for Operation

Transport Corporation up until the time that you began

collecting the personal documents of L. Ron Hubbard for the

biography project, was there any change in your relationship

with Mr. Hubbard; specifically, with regard to working for

him?

A Yes. There was a series of changes.

Q And what were those changes?

A From the time when I was on the ship, although

I was working for him, I was not working on his -- for him

on an individual or personal basis. I was not dealing with his

personal matters, but rather, matters for the whole ship's

company which included him.

In Dunedin I was working for him. I was in the

LRH External Com Bureau. And when I moved from there to

Astra, which was the staging area appartments in Culver City,

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External Com Bureau. And I was in a very small group of

people, all of them in the personal office of L. Ron Hubbard

and all living with him. And I was taking care -- I was

solely taking care of his needs.

When I went to the RPF, then, again, I was

more distant. And I was not at that point in the personal

office of L. Ron Hubbard.

When I again rejoined Mr. Hubbard at the end of

1977, I was working with him personally in making movies.

When I began to work on his house in the

Household Unit, which are the group of people who serve his

very personal needs, I was working directly for him.

I had nothing whatsoever to do with what you

would call church affairs or church personnel or anything

like that.

That continued when I remained in the personal

office and worked for him assembling his personal archives

for the biography to be done on him.

Q Now, you mentioned the personal office of

L. Ron Hubbard; what is that?

A The personal office of L. Ron Hubbard is the

group of people who perform various functions which are

personal for Mr. Hubbard.

Q Was there various divisions within the

LRH personal office?

A When I was a part of that office, there were a

number, yes.

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Q What are they?

A There was the LRH PR Bureau; LRH Artists;

LRH Compilations Unit; LRH Accounts Unit; there was the

personal secretary, LRH's personal secretary. There was the

LRH Assembly Unit and Authorization end Verification Unit.

Q And was there the LRH Household Unit?

A Yes. That is another section.

Q What did the LRH Compilation Unit do?

A The Compilations Unit took materials which had

been published in one form or another, writings by

Mr. Hubbard, and compiled them into various packs or orders

or books or pamphlets or magazines and -- for publication,

republication, and sale.

Q To your knowledge was that a profit-making

operation?

A Well, it certainly did make profit for

Mr. Hubbard.

Q Were all of the units that you just described

all profit-making divisions of the LRH personal office for

L. Ron Hubbard.

MR. HARRIS: May we have an objection to this as

calling for a conclusion of the witness without adequate

foundation.

I move to strike the book, et cetera,

Compilations Unit as certainly making profit for Mr. Hubbard,

Your Honor.

THE COURT: It is a little late, but I'll strike it.

You have to lay some kind of foundation as to

the basis of his knowledge.

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Q BY MR. FLYNN: Were you in any of these units

other than the Household Unit?

A I was in the PR Bureau.

Q And when did you join the PR Bureau?

A 1980.

Q Now with regard to the Household Unit, did the

Household Unit perform any services for the Church of Scientology

or any of its divisions to your knowledge of any nature or

description?

A No.

Q Did all of its services relate to personal

services of Mr. Hubbard?

A Yes.

Q And you described the personal services that

you worked on yesterday; is that correct?

A Yes.

Q With regard to the LRH PR Bureau, did you

become familiar during the period that you were on the

biography project with the operation of that bureau?

A Yes.

Q And the head of that bureau was who?

A During most of the period in which I was in the

bureau it was Laurel Sullivan.

Q Were there meetings between you and Laurel

Sullivan with regard to the purpose of the LRH PR Bureau,

particularly with regard to the project that you were working

on?

A I don't think it was ever discussed, the

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purpose of the biography project.

Q And what was that purpose?

A There were a number of purposes. One was

increased acceptance of L. Ron Hubbard and his products.

One was money to L. Ron Hubbard. One was increased PR

for Mr. Hubbard.

Q Now, when you say that money to L. Ron Hubbard,

did you participate in meetings in which the question of

whether Mr. Hubbard would receive royalties on the book to be

written by Omar Garrison was discussed?

A Yes.

Q And who participated in such meetings?

A There was a number of such meetings. Laurel and

I discussed it at some time and, in fact, I made some grids

of the -- which involved the splitting of royalties between

Omar Garrison and how much they would make on a given amount

of sales of books, and the subject was also discussed at some

length with Laurel Sullivan and Alan Wertheimer.

Q And were you present in those meetings?

A I was present at least at some of the meetings.

Q To your knowledge was it always the intended

purpose of the biography project in which you were working

that Mr. Hubbard derive income from the sales of the book to

be written by Omar Garrison?

A That was definitely a large part of it.

Q With regard to the LRH Accounts Unit, do you

have a general familiarity with what the purpose of that unit

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A Yes.

Q And what is the basis for your understanding

of what the purpose of that unit was?

A From talking to the people who were the LRH

Acounts through time and from my dealings with them.

Q And who were these people?

A The first one that I recall was someone called

Vicky Polimeni; later Vicky Livingston, and there was

Mike Smith and then Jim Isaacson.

Q And did you have the opportunity to observe them

in connection with their duties in the LRH Accounts Unit?

A Not a lot but some.

Q What did you observe?

A I knew that they handled the accounts of

Mr. Hubbard, his bank and his sources of income, and that

they were very much involved with the sale of his book and

his income from various sources.

Q For the moment I am going to digress from

this subject and then we are going to come back to it.

Now, I'd like to take you back, Mr. Armstrong,

to the beginning of the biography project in February 1980.

At that time do you recall a program relating to the Safe

Environment Fund?

A Yes.

Q And what was that program?

A Well, the Safe Environment Fund was an organization

which was established of Scientologists which was established

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for the defense of the 11 people involved in the Federal

criminal case.

Q And at some point in time did you become

involved in part of that project?

A Yes.

Q And when was that?

A Some time in February 1980, the beginning of

February.

Q And describe the circumstances under which you

became involved?

A One of the Safe Environment Fund personnel by

the name of Jerry McNeely who was then in the Guardian's

Office, having read that Mr. Hubbard wrote the screenplay

for the movie "Dive Bomber" created an idea of renting the

movie "Dive Bomber" -- it was a 1940 Warner Brothers movie --

and showing it to some Scientologists in public and obtaining

through the sale of tickets to that movie and through the

promotion of the movie as L. Ron Hubbard's movie income for

the Safe Environment Fund.

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I became involved because Laurel was asked --

and I had moved by that time into the P.R. Bureau -- Laurel

was asked by Jerry McNeely to give a talk, a L.R.H. talk at

the event, at the movie showing. So she agreed.

I, at that point, saw some of the promotional

materials which the Safe Environment Fund was distributing.

And they had posters made up and glossy promotional items.

L. Ron Hubbard was noted as the man behind the

scenes.

They had obtained a poster from the Dive Bomber

movie and then reprinted it with some text underneath it

concerning L. Ron Hubbard and his part in the movie.

At that point I had obtained from Del Sol a great

amount of materials. And I had within those materials

information concerning Mr. Hubbard's involvement in the screen

plays, screen writing in Hollywood.

So I tried to assemble documentation at that time,

thinking that I would support the -- you know, add some color

to it, perhaps some anecdotal material that Laurel could

include in her speech.

And in going through the material, I couldn't

find anything to do with Dive Bomber.

I obtained a copy of the short story which

Mr. Hubbard had written and had been produced in a pulp

magazine in, I believe, 1936. And I checked the screen --

I read through the story and then I went to the Academy of

the Motion Pictures Arts and Sciences here in Los Angeles --

I was then in Gilman Hot Springs -- and I obtained a copy

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or a treatment. And I realized that the two were completely

different.

And I also saw that Mr. Hubbard's name was not

noted in the credits. And I believe there were a couple of

writers noted.

In any case, I checked their names against other

records in the Academy Library and confirmed that they couldn't

have been him because they were writing on several other

movies which he could not possibly have been involved with.

So they weren't pseudonyms that he was using.

So then I sent to Mr. Hubbard some of the

information which I had obtained on the movie. Up to that

point because I had also contacted -- thinking at that point

that perhaps there was some error, maybe he did not write

Dive Bomber, I didn't want to have the Safe Environment Fund

promoting this thing if he had not in fact done it. It would

have been embarrassing if someone had, said, "where is your

name" and his name wasn't on it.

People had paid money. So I thought perhaps I

could come up with something else that could be a substitute.

So I tried to get ahold of one which I knew he

had written called The Secrets of Treasure Island which was

a 15-part Saturday afternoon serial. He wrote that for

Columbia, at least he worked on the screen plays.

I couldn't find that with Columbia. So I wrote

to Mr. Hubbard and let him know what I had found to date in

the research that I had done. And he didn't answer me.

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But he sent down a dispatch to the Safe Environment

Fund and a copy to Laurel which I had at that time.

And in that document he said that there was no

credit for the movie, but that he had in fact written it.

And he -- sounded like he was going to create

some trouble for the studio. And it was just before the war.

And one day the PR representative for the studio called him

up and said -- was very apologetic because he could have been

sued for, I believe it was, a dollar per foot.

And so he gave Mr. Hubbard a certified check which

Mr. Hubbard stuck in a safety deposit box until the end of

the war, at which time he went on a Caribbean cruise.

Q That is what the document said?

A To my recollection, Yes.

Q Do you know whether that document is under seal?

A Yes, it is.

MR. FLYNN: May we have that, Your honor? That is T.

Q Is this the document received from Mr. Hubbard

that you just testified about?

A Yes.

Q Now, in the -- May this be marked as defendant's next in order,

Your Honor?

THE COURT: All right. DD.

MR. FLYNN: Should I mark that and give it --

THE COURT: Just put "double D" on it.

MR. FLYNN: in Massachusettes, Your Honor, the lawyer

is not allowed to mark an exhibit.

THE COURT: You are here with the Court's permission.

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Q Now, what is the date of exhibit double D?

THE COURT: What we will do is we will put DD, and

then in parenthesis we will put T; DD(T).

MR. FLYNN: It may be just as devastating, Your Honor.

Q What is the date of double D, Mr. Armstrong?

A 11 February, 1980.

Q Now do recall when you sent your dispatch to

Mr. Hubbard?

A Yes.

Q And did you put a routing formula on the dispatch

that you sent?

A Yes.

Q And what was it?

A It would have been through Laurel to the

messenger on duty to R.

Q And when you say "Laurel", it would have had her

post title?

A Yes, Senior Pers Bureau.

Q And was Mrs. Hubbard one of the 11 defendants

in the criminal cases you mentioned?

A Yes.

Q Now, when you received this back, I note the

name Fred Ulan, MC. Who was he?

A Fred Ulan, I believe, was the head of the

Safe Environment Fund. What the "MC" is, I am not sure.

Q Incidentally, do you know what the tickets

were selling for for the showing of this movie?

A No, I don't recall.

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Q Do you know approximately how many people showed

up for the showing of the movie?

A My recollection there was a thousand or more.

Q Do you know whether Laurel Sullivan is aware

of how much the tickets were selling for?

A I don't know.

MR. FLYNN: May I read this into the record, Your

Honor?

THE COURT: Any objection?

MR. HARRIS: Yes.

MR. LITT: We object to reading any of the documents

under seal into the record, and there is no reason to read

it into the record. There is nothing exceptional about it,

but what is the reason for reading it into the record? He has

testified about what he has to nay about it.

MR. HARRIS: The court can read it.

MR. FLYNN: It lays the foundation for his state of

mind for a lot of events that are going to take place over the

next year and a half, Your Honor.

THE COURT: Oh, I will permit the reading. I don't

see anything any different in this and any of the other

communications that we have had here.

MR. FLYNN: Exhibit Double D:

"11 February, '80.

"Committee for a safe environment.

"CC Fred Ulan, MC.

"CC SNR PPRO INT.

"CC: F

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"Re: Dive Bomber.

"You may get a question from the audience

or someone as I don't think my name is on the

sub-titles of credits for story. The reason for

this is that Warner Bros. shot the whole story and

got it in the can before somebody had noticed they

had forgotten to contract with me and pay me for

it. They hastily made up for this omission but

after the film was released.

"There is an amusing anecdote connected

with this: It was just before I was shipped out

for the South Pacific as a naval officer. I

was closing up my New York, Riverside Drive,

posh apartment. The phone rang and the head

of Legal Department of the studio's New York

office announced himself. He was very worried

and stammeringly informed cue that they wanted to see

me down at their office right away. Having my

hands full of gear I was packing, I demanded to

know what it was all about and murder outed. The

studio could have been hit for a $ a foot in

damages. They made me a very reasonable offer

and I said, 'Sure, great, mail the check to the

Explorer's Club,' and he said, 'Well, don't you

want to come down and sign the contract,' and I

said, 'Mail it to the Explorer's Club with the check'

and he said, 'Wouldn't you like to come down

right now and have lunch?' He was feeling very

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expansive and relieved and I said, 'No, just mail

the check and contract to the Explorer's Club,

I'm busy.' And I was and the war lasted for 4 1/2 years.

"When it was over, I used the check to take a

holiday in the Caribbean. And that's the story of

'Dive Bomber'.

"The audience will have the advantage of

me; I've never seen it. They didn't have movies

where I went."

MR. LITT: There was a mistake made in the reading.

The word "it" was just before I shipped out.

MR. FLYNN: I might have included the word "was."

MR. HARRIS: No, you included the word "the.°

I think the best way is for Your Honor to read

it.

THE COURT: Well, it's been read now and I don't want

to read it again.

MR. HARRIS: But I mean in future.

THE COURT: Well, let's deal with it, on a situation-

by-situation basis.

Q BY MR. FLYNN: And for the record it was

signed "L. Ron Hubbard" at the bottom; is that correct,

Mr. Armstrong?

A Yes.

Q Now, whether items of significance in that

communication from Mr. Hubbard that you then pursued in

connection with investigating some of the statements that

were made?

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A Yes, there was a number of points.

Q And what are they?

A I noted here that he had sent the check --

that it was a check and that it had gone to the Explorer's

Club.

An earlier tape which Mr. Hubbard made, I

believe it is called "The Story of Dianetics and Scientology"

or "The History" or something like that, I had a copy of the

transcript at that time and it showed that the amount that

he received was $10,000 in thousand dollar bills and that he

had put it into a safe deposit box.

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Q That is what was said on this tape?

A Right. And that he had used the money to finance

the research for Dianetics.

Additionally, I was struck by the fact that here

he was going on a -- the war was over and he used the check

to take a holiday in the Caribbean.

And my understanding was, from what I had read,

that he was cripled and blinded and studying when he was blind

at that period and that he was broke at the war's end and

was deserted by his family and friends.

So I had on my hands a number of contradictions.

Q Now, subsequent --

Your Honor, at this point we are not going to

try to go through all the records of '45 and '50 which we

have, but we intend to bring out the pertinent ones at a later

time. But in order to keep some continuity in the system

by which we are going to go through the records, I'm going

to leave the records that we are going to use to address this

particular issue, leave that to a later time; just so the

court will know.

THE COURT: All right.

Q BY MR. FLYNN: Did you, however, Mr. Armstrong,

go through all of Mr. Hubbard's records that you could find

for the period after World War II?

A Yes. I went through what I could find right away

to see if I could answer the contradictions.

Then throughout the next almost two years, I went

through a great deal more masses of documents and kept that

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Q Now, did you examine Mr. Hubbard's Naval and

Veterans Administration records with respect to his physical

and financial condition after World War II?

A Yes,

Q And what did you find?

A He was claiming throughout the postwar period

to the Veterans Administration that he was broke or penniless.

And he was also claiming throughout that period that he had

various illnesses, particularly an ulcer and diminished

eyesight.

Q Did you find a record in the Naval records in

which he said that he was hospitalized for one year in a

civilian hospital after the war ended?

A Yes.

Q And did you find any records to indicate that

he had ever been hospitalized in a civilian hospital for one

year?

A No.

Q Did you find other Naval records that indicated

that he stated that he had not been hospitalized for one year

in a civilian hospital after the war?

A Yes.

MR. LITT: Can we not have leading questions, Your Honor?

THE COURT: Well, these are leading, counsel.

MR. FLYNN: I'll make them more direct, Your Honor.

Q Did you find any records that indicated that

Mr. Hubbard went on a Caribbean cruise after World War II?

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A There was --

MR. LITT: Your Honor, I am going to object to the form

of the question as another leading question.

He should ask Mr. Armstrong what it is he

discovered in this relationship.

THE COURT: He doesn't have to ask it that way to be

nonleading. The question doesn't indicate he has to give

any particular answer. Either he did or he didn't.

Let's go ahead.

THE WITNESS: There was a story of a ship which was

purchased in 1946. Mr. Hubbard purchased the ship as part

of a corporation or a company called Allied Services or

something along with John W. Parsons and that the money which

went into it was Parsons' money.

Q BY MR. FLYNN: Now, is all the Parsons' material

among the documents under seal?

A Not all of it, but there is a portion of it.

Q Now, were there any records relating to any

Caribbean cruise?

A No.

Q When you say, "a ship," what type of a ship are

you talking about that Mr. Parsons purchased?

A It was a fairly substantial ship. It may have

been 35 feet, maybe a little longer.

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Q A 35-foot sailboat?

A Yes.

Q Okay. Now did that situation with Mr. Parsons

end up in litigation?

A Yes.

Q And are those litigation records under seal?

A Yes.

Q Now were there other records that you found

under seal that indicated Mr. Hubbard's physical condition up

until 1949?

A There is a great number of records on that

subject.

Q Okay. Now after you found that these contradictions

existed, what did you do?

A Well, right at this time or shortly thereafter

Laurel was signed to a mission, a mission which is called

MCCS, Mission Corporate Category Sort-Out, and she was

going to be having extensive dealings with Mr. Hubbard's

attorney, Alan Wertheimer, and his tax attorney at that time,

Jim Murphy, both of whom had offices in Beverly Hills. So

we were at that time in Gilman Hot Springs and it was decided

that it would make more sense if we moved into Los Angeles.

Laurel was to move. I was at some point asked

to be her second on the mission. There was a mission in

charge, and if there is more mission personnel, they are

designated second, third, fourth, fifth, sixth et cetera,

and I was to be the mission second.

Q And this was what they called the MCCS mission?

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A Right.

In addition, all the top personnel of the

CMO at that point also moved into Los Angeles, and they moved

all the international management personnel from Gilman Hot

Springs into Los Angeles, so it made more sense because we

would be dealing with those personnel and dealing with

attorneys to move into Los Angeles. So I moved at that point

along with Laurel, and I moved in all the materials which

were from archives, the archives which I was establishing at

that point. I principally had only the materials from

Del Sol, so I moved into Los Angeles.

Q And the purpose of the move was because of the

MCCS Mission?

A Right.

Q Now, did the MCCS Mission become inter-related

to the biography project over the next year and a half?

A Yes.

Q And did it become an integral part of the

biography project?

A Well they were connected. I wouldn't say that

MCCS was a part of the biography project. Maybe the biography

project was part of MCCS.

MCCS dealt with a number of subjects, one of

which was the biography contract and the biography project.

Q Now, what was the purpose of the MCCS Mission?

MR. HARRIS: I will object, Your Honor; no foundation

THE COURT: Well if you know.

THE WITNESS: The purpose of the MCCS Mission was to

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by which Mr. Hubbard could retain control but not be responsible

for the organization.

Q BY MR. FLYNN: How do you know that, Mr. Armstrong?

A Because I was involved in the initial briefing

and in the correspondence from Mr. Hubbard which were given

to Laurel and myself at the outset.

I also was involved in a number of meetings,

discussions with Laurel Sullivan and similar discussions

with Alan Wertheimer.

MR. HARRIS: Your Honor, at this point I will move to

strike as a conclusion of the witness based upon hearsay,

or if not, attorney-privileged communication which he is

disclosing at this point.

The MCCS Mission, the subject of the corporate

sort-out, involved many attorneys and involved church personnel

who were in liaison with such attorneys in respect to church

matters and sorting out corporate church matters as well as

the relationship of the founders of the church, and on that

basis I'd move to exclude any further testimony in respect

to that.

MR. LITT: Furthermore, Your Honor, the church can

provide documents that show what the purpose of this is.

This implication -- there is no foundation for his statement

statement of what he recalls.

If the court wants, we can provide in camera to

the court whatever documents are necessary to show that this

whole activity was directed by attorneys for the purpose of

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of different church organizations and the founder of

Scientology.

This whole subject matter is wrong. The

characterization that has been given, there is no foundation

for. It is inaccurate and it cannot be used as an

excuse to not begin to probe into this area.

We are very concerned about this question.

We are prepared to provide the court whatever materials are

needed. We are prepared to bring the attorneys involved.

We have some memoranda which can be submitted

to the court by this afternoon on this area, and we just

don't think it can be gotten into. This is just improper.

Everything that was done on this mission, this was a mission

to regain attorneys, gather facts for attorneys, provide those

facts to attorneys, get advice from those attorneys about

how to solve a variety of problems concerning these inter-

relationships.

This man was an employee of the church at the

time when all of this occurred, and to the extent he has any

such knowledge, he may not divulge it. He may not characterize

it.

MR. FLYNN: If I could be heard, Your Honor.

THE COURT: All right.

MR. FLYNN: At this point, I have in my preparation

of the examination restricted it to the briefing with

Laurel Sullivan which was just described to the court laying

a foundation for what is going to become readily apparent to

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reasons:

The MCCS Mission worked together with the

biography project because the biography project in the

collection of the documentation, particularly documents

relating to the Hubbard Explorational Company Operation

Transport Corporation, OTS, and a corporation called

Religious Research Foundation, all of which documents or

most of which documents Mr. Armstrong collected, basically

revealed that from --

MR. LITT: Your Honor --

THE COURT: Let counsel finish.

MR. LITT: Your Honor, I am afraid -- if we can have

an in-camera thing on this. This has happened before. He

cannot refer to contents of any privileged conversations.

MR. FLYNN: I won't, Your Honor.

MR. LITT: Okay.

MR. FLYNN: I won't refer to any privileged communications.

The sealed documents in part, together with

the other 98 percent of documents that are in the Armstrong

Archives which are not here, basically reveal that throughout

the period of time that Mr. Armstrong was working for

Mr. Hubbard, as he has testified to, and he believed that

Mr. Hubbard was only making $35,000 per year from the church,

as he has testified to, and as he testified was represented

to everyone -- everyone that he knew have related to the

Church of Scientology.

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The documents basically reveal that over

$200,000,000 was paid to Mr. Hubbard from church funds through

Hubbard Explorational Company initially at 15,000 pounds per

week set forth in the documents under seal; then to the

Operation Transport Corporation; then beginning in 1972, to

a corporation called Religious Research Foundation. And the

funds were transferred into Swiss bank accounts initially

and then later on into Liechtenstein bank accounts.

Mr. Armstrong, together with Miss Sullivan during

the period of time that they were sorting all of this out,

basically realized that every Scientologist including

themselves, had been grossly misrepresented to relative to

the facts of L. Ron Hubbard's control over the Scientology

organization, L. Ron Hubbard's participation in these profit-

making corporations which received monies from Scientology

organizations and whether or not L. Ron Hubbard had even been

receiving funds from Scientology organizations aside from

the issue of control.

The individuals like Mr. Armstrong, for a period

of ten years, worked at $4.20 per week, 100 hours per week

on personal services of L. Ron Hubbard such as renovating

his homes and collecting his documents and --

There will be extensive testimony about the

biography contract with regard to what Mr. Hubbard was going

to get for it. In fact, hundreds of millions of dollars have

been transferred to Hubbard in the liechtenstein bank

accounts.

What happens is the following: the purpose of

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in conversations with Laurel Sullivan, completely shifted

in midstream to conceal what I just told the court.

Two of the tapes that are under seal --

THE COURT: We are not going to talk about what is on

the tapes.

MR. FLYNN: -- relate to that subject.

So we are in a position of knowing the individuals

involved who were involved in the intentional future

concealment, the concealment in the future of the facts that

have just been taking place over the last ten years and facts

that relate to the biography project.

Mr. Garrison, Miss Sullivan, and Mr. Armstrong

discover all of these facts, the tapes and the later activities

of MCCS -- and we have a memorandum already prepared on the

subject -- go to the future concealment of the past fraud.

THE COURT: Well, of course, this is going a little

bit beyond the particular subject we were talking about here.

And it seems to me that at this stage of the proceedings I

don't really see that there is anything that involves any

attorney-client privilege.

He was asked about what he had been briefed on.

I can't see how he was briefed on -- assuming it was

from somebody else within the Scientology group or the Sea

Organization or whatever, could be attorney-client privileged.

And it may be that you'll get to something that might be

privileged, but we haven't got to that yet.

When the time comes, you can make an objection.

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The fact that there may be something written down

doesn't mean that the other side is bound by it. The fact

that the plaintiff may have something in writing which

purports to indicate one thing does not mean that the defense

is bound by it. The other evidence which the defendant has

to produce which can contradict it, present it in conflict,

we have to deal with that as we go along.

I don't remember what the last question was, but

clearly, he can testify as to what he was briefed upon.

MR. HARRIS: If he was briefed, as he claims as MCCS

second, that is, the second person in charge of this mission

which was to sort out all of the corporation relationships

and so on, in respect to the attorneys and their advice --

THE COURT: We haven't got to that yet.

MR. HARRIS: He has also conclusorily stated what the

purpose was.

THE COURT: If he was told what the purpose was, he

is certainly entitled to testify to that. He wasn't told

by some attorney, I presume.

Q BY MR. FLYNN: Mr. Armstrong, the testimony you

just gave about the briefings that you received regarding

the MCCS Mission, who did you receive that briefing from?

A The initial briefing was by Laurel.

Q Was there any attorney present in that initial

briefing?

A No. We -- for the first few days, there was

Laurel, myself, and another man by the name of Rick Klingler,

joined MCCS at that time.

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After the first -- after we moved to Los Angeles,

then began a series of meetings with Alan Wertheimer. And

during some of those meetings another attorney, Jim Murphy,

was present

Q Just yes or no; did some of those meetings relate

to MCCS with Mr. Wertheimer and some relate to the biography

project?

A Initially all of then related to MCCS.

When the -- we proceeded in the biography project,

then Mr. Wertheimer became very involved in that as well.

Q All right. Now, leaving that subject there for

the moment, after you learned of the contradictions in respect

to the Dive Bomber presentation, you indicated to Laurel

Sullivan what those contradictions were; is that your

testimony?

A Yes. I told Laurel at that time what I had come

up with.

Laurel was not very willing to accept my

information and she believed that what Mr. Hubbard had said

in the letter was true. And she in fact read that letter

at the showing of the film Dive Bomber.

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Q And was the movie shown?

A Yes.

Q And thousands of people attended.

MR. HARRIS: Your Honor, that misstates --

THE COURT: He said a thousand. I don't know about

thousands.

Q BY MR. FLYNN: Do you know how many people

attended?

MR. HARRIS: Objection. Asked and answered.

THE COURT: Sustained.

Q BY MR. FLYNN: Do you know whether or not the

people who attended paid money?

A Yes. It was advertised and there was an admission,

the purpose of which was to raise money for the Safe

Environment Fund.

Q Now, when you found these contradictions, what

was your state of mind at the time with respect to your duties

and the biography project when you found those contradictions?

A Well, I -- at that time and thereafter, for a

long time I remained convinced that the man would not lie

and that there was some other explanation for the

contradictions. I could not resolve them in my mind at the

time and they remained as contradictions, but that didn't

sway me as far as my dedication to the project and in trying

to get to what the real facts were.

Q Now, approximately when did you move to Los Angeles

from the Gilman Hot Springs property?

A My recollection, it was -- would have been

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Q Of 1980?

A Yes.

Q Now, at that time did you and Laurel Sullivan

have discussions relative to appraising the contents of the

archives that you had found?

A No. The idea of the appraisal came sometime

later. that would have been perhaps in the summer, late

spring, summer, of that year.

Q And what occurred in connection with the appraisal?

A The idea was originated that these things -- when

I say "these things," we are talking about the Hubbard

originals and the Hubbard archives together with the controller

archives; at that time were noted by the L.R.H. accounts who

at that time was Mike Smith as having an immense amount of

value.

His function or the statistics of the L.R.H.

accounts post was income to L.R.H., L. Ron Hubbard.

And one of the plans that he devised was the

possibility of the establishment of a trust. And the

intricacies of that thing, I don't know. But one of the

purposes of it was to have Mr. Hubbard donate these things

into a trust of some sort and be able to take the value as

a tax write off of some description.

There was a program which was written by Mike

Smith at that time. And it has been referred to in some of

the documents which have been produced in this case, I believe

particularly something from Tom Vorm here. He refers to the

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by Mike Smith.

Mike Smith at that time was thinking particularly

of the controller archives.

But when I discovered the Del Sol Archives, then

those were also included in the overall plan.

Sometime around that period Mike Smith left.

He left suddenly. And Jim Isaacson took over the L.R.H.

accounts.

For my part in that, I had Virgil Wilhite, who

was a collector come in and with his professional expertise,

appraise the documents which I then had in my possession.

And he was to come up with a figure which was then given to

Mr. Hubbard's tax attorney, Jim Murphy.

Then came back another order that Mr. Wilhite

was to come up with two figures; one was a maximum; one was

a minimum. And this had some bearing, apparently, on the

way that the documents were ultimately going to be used in

a -- for the establishment of an archives trust.

The subject of an archives trust came up a number

of times during that period. It involved both myself and

involved MCCS personnel.

I also mentioned the archives trust in

communications to Mary Sue. So she was also aware of the

plan at that point for the establishment of it.

One of the purposes was, of course, to gain

income for Mr. Hubbard.

Q When Mr. Wilhite did this appraisal, was it in

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A Yes,

Q And that was before you sent the letter of

October 15, 1980 to Mary Sue Hubbard; is that correct?

A Yes.

Q Now, at some point in time you had collected

approximately 22 boxes from the Del Sol Hotel?

A Yes.

Q Approximately how many documents were shredded

from the Del Sol Hotel during the shredding in January, 1980?

MR. LITT: From the Del Sol Hotel?

MR. FLYNN: I'll withdraw that.

Q Approximately how many documents that were

shredded in January, 1980 in the shredding project came from

the Del Sol Hotel, if you recall?

A I couldn't give you a very accurate figure, but

there was a great deal of material which came from there which

was shredded.

Q Would the number be in the thousands?

A Yes.

Q Now, were there documents shredded from the upper

floor of the Del Sol Hotel?

A Yes.

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Q And approximately what percent of the documents

that are presently under seal were headed for the shredder

when you rescued them, Mr. Armstrong?

MR. LITT: Objection. The characterization of "rescued."

He's testified what he did. Rescue is argument at best.

THE COURT: I suppose so, but it is in the eyes of

the beholder.

Q BY MR. FLYNN: Aproximately what percentage of

the documents that are presently under seal were brought to

you to determine whether they should be shredded?

A Probably a very small percentage.

Q And what is your best memory as to what

percentage it is?

A I couldn't say. If you include the total amount

which would have -- if we had allowed the first box to be

shredded --

MR. LITT: Objection; this is not responsive.

THE COURT: Well he is getting up to an answer.

THE WITNESS: Yes, I am trying to give you a percentage.

Then the other boxes would have followed suit,

the other boxes which were in Del Sol at the time, so I would

say 50 percent of the documents under seal come from the

Del Sol materials which potentially all could have been

shredded during that shredding campaign.

Q BY MR. FLYNN: And under the criteria that was

established should they have been shredded?

MR. LITT: Objection; this has been asked and answered

and is a conclusion.

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THE COURT: I will sustain the objection.

Q BY MR. FLYNN: Now, during the period of time

in the summer of 1980 when Mr. Wilhite was appraising the

documents that you had collected, did you become concerned

about the fact that documents were being lost, shredded or

destroyed from sources other than Del Sol that you had not

yet reached in connection with your duties?

A Yes.

Q And in what way did you become concerned,

Mr. Armstrong?

A Well, I had at that point gone to Clearwater

and some time in May of 1980 I had seen materials at

Clearwater, I knew that -- I talked to John McGinley who was

in the LRH Pers Com Flag. He informed me that B-1 personnel

had gone through the Pers Com files and had taken out

anything which they considered sensitive at that time.

I also knew that he had taken the totality of

the Pers Com files out of the organization offices and had

them hidden off the property in a cleaning closet in one of

the buildings which was used for housing and berthing by

organization personnel.

I had by that time gone through the basement of

the building known as ASHO, American Saint Hill Organization,

and had discovered materials down there which was very early

Dianetics--Scientology materials which were being destroyed,

and just from those sources alone by the summer, I knew that

there was a problem.

In August I traveled up the coast and visited

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met with a number of early Dianetics and Dianeticists and

Scientologists and determined that in those locations there

were materials which were not being cared for.

So I thought it as a problem of some magnitude

at that point.

Q And did you learn that materials had been left

at the LA organization in an area which flooded really

and those materials had been completely ruined?

A Yes, those are the ones that I am referring to.

I went to the L.A. organization and those materials were

being destroyed.

MR. LITT: Destroyed or ruined?

THE COURT: You can cross-examine later.

Q BY MR. FLYNN: Ruined, Mr. Armstrong?

A Yes, ruined.

Q And you learned at that period of time that

documents pursuant to these shredding procedures were being

destroyed throughout the United States; is that correct?

A I knew of that from 1977 because I was

involved even in 1977 on the destruction of, you know, what

could have been records of what I considered then historical

significance.

Q And prior to your undertaking the duties that

you are undertook in collecting the documents, to your

knowledge was there any organized efforts by Mr. Hubbard

or anyone else in the Scientology organization to prevent

the destruction of documents of historical interest?

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A I think that Mr. Vorm had also around that

period, probably in part because of communications with me

because I was trveling around a great deal and finding

these materials, he also became aware of the problem and

within his organization sought to bring the problem to light

and take steps to correct it.

Q Now in your correspondence of October 15, 1980

which, for the record, is exhibit J, of seven pages in

length, did you communicate these problems of destruction

or ruination of materials to Mrs. Hubbard?

A Yes.

MR. HARRIS: Well, to the extent that the words "To

Mrs. Hubbard" are in there, Your Honor, the document speaks

for itself and is now in evidence. There has been testimony

that she didn't receive it. He communicated in a letter.

THE COURT: All right. Should be more specific, I

suppose.

It was communicated in this communication;

is that right?

THE WITNESS: Yes, Your Honor.

THE COURT: All right.

Ask the next question.

Q BY MR. FLYNN: And you sent that to the controller?

A Yes.

Q And the controller at that time was who?

A Mary Sue Hubbard.

Q Now did you find, you mentioned the Pers Com Flag

files, did that same situation exist with other sources

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or ruination of materials?

A Well, the one that comes to mind is, and I

may have mentioned it, GO PRWW where they were being

totally uncared for and a lot of the materials which I went

through were mildewed in the building in which they were

housed in St. Hill.

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Q To your knowledge prior to your collection

of these documents in one place, had a complete collection

attempt ever been made together with an appraisal of the

documents collected in that process?

MR. LITT: Collection attempts of what?

MR. FLYNN: Of the biographical materials of L. Ron

Hubbard.

MR. HARRIS: That is a compound question, Your Honor.

MR. FLYNN: I'll withdraw it, Your Honor.

THE COURT: Very well.

Q BY MR. FLYNN: Do you know whether an appraisal

had ever been done before of Mr. Hubbard's biographical

materials?

A I don't know of any.

Q In your initial petition to Mr. Hubbard did you

recite that this is basically what needed to be done; that

the materials all needed to be collected for his benefit?

A Yes.

MR. LITT: Objection. The document speaks for iself.

BY MR. FLYNN: With regard to --

THE COURT: The document says, "...one of the historians

of the company."

What are the historians of the company?

THE WITNESS: That was -- the historians of the company

were to be the people who collected up the -- what they call

the PR archives at WW.

There was -- there had been something written

on that subject. And I took that -- the note "historians

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THE COURT: All right. You may continue, counsel,

Q BY MR. FLYNN: Did you meet anyone who fell into

the category of being an historian of the company?

A I guess I was possibly the closest thing to it.

Q Now, prior to the discussions of the contract

with Omar Garrison and PDK, did you conduct interviews with

people relating to the biography project?

A Yes.

Q And who did you interview?

A This is up to the point of meeting Omar Garrison;

is that correct?

Q Prior to the contract being executed.

A Okay. I had met a number of people in Seattle

and Portland areas who were early Dianeticists.

I had met Mr. Hubbard's cousin who lived in

Bremerton, Washington.

I met two of his cousins at that point.

I met another cousin in Bellingham, Washington

and his living aunt in Bellingham, Washington.

I interviewed an old woman who had lived beside

him in Port Orchard, Washington and another couple of people

who knew little bits of information up in the Port Orchard

area.

There was a person who worked with me, Francis

Schier was his name; he was just sort of a volunteer. And

he interviewed a number of people throughout that period.

Those were people who were principally at that time working

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Q Now, what was your understanding as to where the

money came from to finance those trips, Mr. Armstrong?

A From -- all of it ultimately came, I believe,

from Sea Org reserves.

Q What is Sea Org reserves?

A Sea Org reserves is the money which is collected

by the sea Organization from other organizations or from their

own organizations which is over and above operating expenses

and which is put into reserve bank accounts.

Q And did you know where the bank accounts were

located for Sea Org reserves in 1980 and '81?

A I can't say for sure. I was told Luxemborg at

that point.

MR. LITT: I object to what he was told.

THE COURT: By whom were you told?

THE WITNESS: By Laurel Sullivan, Your Honor. And in

communications with finance personnel, someone by the name

of Tinglenberg.

THE COURT: People in the Sea Org?

THE WITNESS: Yes.

THE COURT: I'll deny the motion.

Q BY MR. FLYNN: Do you know an individual named

Bill Franks?

A Yes.

Q In 1980, '81 what was his position?

A Throughout at least some of that period he was

called the executive director international.

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Q And what is that post, Mr. Armstrong?

A That was the post which was originally held by

Mr. Hubbard up until he supposedly resigned in 1966. And

the post was recreated and Mr. Franks assumed that post

sometime, I believe, in 1980 or 1981.

It was to be the supreme head of all of

Scientology.

Q Now, did the post of executive director

international have superior authority to the post of

controller?

A That was my understanding of it at that time.

Q Prior to the creation of the post or placing

Mr. Franks in the post of executive director international,

did you have any understanding that there was any higher

authority above the post of controller other than what actual

authority Mr. Hubbard exercised?

A Under Mr. Hubbard and under the messengers who

acted for Mr. Hubbard, the controller was the top post.

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Q Now, at some point in time was there a group

called the Watchdog Committee that came into existence?

A Yes.

Q And what is the Watchdog Committee?

A The Watchdog Committee was a group of senior

messengers who as a committee oversaw and managed all

Scientology and other activities within the complete network

of Scientology related activities.

Q And who did they answer to?

A Mr. Hubbard.

MR. HARRIS: Excuse me, Your Honor. I will move to

strike that as a conclusion of the witness unless he was

there.

Q BY MR. FLYNN: Did you have the opportunity in

1979 to 1981 to observe the activities of the Watchdog

Committee?

A I never saw them meet directly as a committee.

Maybe I saw them when I walked into their office once or

twice, but never to actually observe them acting as a

committee.

Q Did you see orders that emanated from them as

a committee?

A Yes.

Q How many such orders?

A Oh, boy, I really don't know, probably 20 or

30.

Q And do you know whether Mr. Franks had any

supervisory control or authority over Sea Org reserves in

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A I don't know that.

Q Do you know whether Mr. Franks signed an undated

resignation in advance of assuming his position as

executive director international in 1980-1981?

MR. HARRIS: Your Honor, he could only know by hearsay

unless he is present. Could we please have a foundation?

THE COURT: Well, if you have personal knowledge that

you have seen something like this, you may answer. If you

don't, you could so state.

THE WITNESS: I haven't seen such a thing.

Q BY MR. FLYNN: Do you know what the practice

was with regard to officers and directors of corporations of

Scientology between 1970 and 1981 with regard to resignations,

Mr. Armstrong?

MR. HARRIS: Same objection. He's already testified,

I think, Your Honor, that he wasn't an officer or a director

of any such organizations?

THE COURT: Well it is conceivable he might have

personal knowledge. If you have personal knowledge, you can

tell us. If you don't, you can so state.

THE WITNESS: I don't have any, personal knowledge.

Q BY MR. FLYNN: When you collected the documents

under seal, did you find records relating to undated letters

of resignation?

A Yes.

Q For what corporations, Mr. Armstrong?

A For various Scientology corporations.

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Q And when you were collecting the documents

under seal, did you make inquiries as to what the practice

was of Scientology organizations with respect to having

undated letters of resignation signed by officers and directors

of Scientology corporations?

A No. By the time I came across these things,

I was already aware of such a practice and so I understood

what it was at that time.

Q And where did you ---

MR. HARRIS: May everything be stricken after "No"

as nonresponsive to the question, Your Honor?

THE COURT: Well, if I did, that would be the next

question so I will let it stand.

Q BY MR. FLYNN: How did you become aware,

Mr. Armstrong?

THE COURT: Of the practice.

THE WITNESS: Yes, Your Honor.

I had had communications with various people

throughout that period. I had been involved in the OTS,

the back-dating procedure and in dealing with Kima Douglas

who was then the legal officer what was called the Flag

Bureau at that time. I had discussions with her regarding

the possession of undated resignations and the holding of

them.

Q BY MR. FLYNN: Do you know where Kima Douglas

was an officer or director of any Scientology organizations?

A I don't know.

Q Do you know of any other individuals who were

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A I have known several throughout the years.

Q And who are they?

A Sue Pomeroy, Jimmie Mulligan, Bill Fosdick.

Those are the names that I recall right now.

Q Do you recall whether Bill Franks was?

A Well he was the ED International, so I would

assume that is an officer at least.

MR. LITT: Objection.

THE COURT: All right, what he would assume would be

stricken.

We will take a 15 minute break.

(Recess.)

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THE COURT: In the case on trial let the record reflect

that counsel are present; the witness has retaken the stand.

Just state your name again for the record, sir.

You are still under oath.

THE WITNESS: Gerald Armstrong.

THE COURT: Mr. Flynn, you may continue.

MR. FLYNN: Thank you, Your Honor.

Q Mr. Armstrong, prior to the contract being entered

into between PDK and Omar Garrison, did you participate in

negotiations relative to that contract between Omar Garrison,

yourself, and Laurel Sullivan?

A Yes.

Q And when was that?

A We had a number of discussions between the time

that he arrived back from Europe -- which would sometime in

October -- up to the point of his arrival in Los Angeles

which would be sometime in late October.

Q Now, you mentioned Europe; had you met him over

in Europe?

A Yes.

Q When was that?

A In September, 1980.

Q And what was the purpose of your meeting him in

Europe?

A It was to sell him on the idea of undertaking

the writing of the biography.

Q And whose idea was it to try to have Mr. Garrison

write the biography?

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A I think there were a number of people who were

involved in that decision.

I corresponded with Shelia Gaiman for a couple

of months and a number of times prior to actually going to

England to meet Mr. Garrison.

I was in favor of it; I had the memo from

Mr. Hubbard from 1977 where he had basically approved of

Mr. Garrison's work points in which he had created a -- not

on the line of the book so much as a method or a style of

writing it.

Q Now, when you say "work points," are you referring

to what I think has been marked in two places as exhibit I

for the defense?

Your Honor, I think it was attached to the contract

by Mr. Litt.

MR. LITT: We just used what was already there; so it

is exhibit I and it is attached, I think, to exhibit G.

THE COURT: I remember.

Q BY MR. FLYNN: Exhibit I is dated March 16, 1977;

is that correct?

A Yes.

Q To your knowledge what role had Mr. Garrison

played prior to the time that you became involved with him

in connection with the biography?

A The only thing that I know about that he had done

relating to the biography was to write what he called his

work points.

He did that not in anticipation of himself doing

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approached.

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Q And do you know who asked him to do that?

A I don't know.

Q Do you know the circumstances under which

exhibit I was created?

MR. LITT: Is this personal knowledge that is being

asked for, Your Honor?

THE WITNESS: I don't have any personal knowledge of

it, only what I have been told.

Q BY MR. FLYNN: Well, when the contract was

created, did exhibit I come into your possession?

A I had exhibit I prior to the creation of the

contract. Exhibit I, both parts of it existed in the PR

Bureau files at that time.

Q Had you found that when you were collecting

documents on the biography?

A Yes.

Q Now, did you notice in exhibit I there is a

letter from Mr. Hubbard regarding the biographical work points;

is that correct?

A Yes.

Q And did you know in there Mr. Hubbard records

that his own records were stolen in 1953 relative to his

personal records that existed prior to 1953?

A Yes.

Q And did you find that to be true?

A No.

Q And, in fact, you found his records in the

Del Sol; is that correct?

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A Yes.

Q Now when you met with Mr. Garrison, did you have

any discussion with him prior to entering into the contract

about the fact that the internal records of Mr. Hubbard prior

to 1953 did exist?

A Yes.

Q And what did you tell him?

A I told him in considerable detail what I had

found and the conditions under which they were found, and I

provided him at that point with a copy of the Virgil Wilhite

inventory. Wilhite by that point had done a rough inventory

of the documents which I had located in Del Solt and I took

off the monetary amounts from the copy that I made and provided

that to Mr. Garrison along with explaining to him what the

mass of the materials was and roughly the contents or

description of the -- what types of materials they were.

Q Now, did you have any discussion with

Mr. Garrison about the fact that he would not undertake the

biography contract unless these materials were given to him?

A That was my understanding right from the

start. It was a point which he demanded.

Q Namely, access to these personal materials?

A That is right.

Q Now after meeting with Mr. Garrison in England,

when did you see him again?

A Right around the time of the biography contract

negotiations.

Q And when was that, Mr. Armstrong?

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A Probably a few days prior to the actual signing.

Might have been the 28th of October.

Q And who was present at that time?

A Laurel and I and Mr. Garrison.

Q Was there an attorney present who represented

Mr. Garrison?

A No.

Q Did he represent himself?

A Yes.

Q Was there an attorney present representing

Mrs. Hubbard?

A No.

Q Was there an attorney present representing

Mr. Hubbard?

A No.

Q Was there any attorney present?

A No.

Q And what was said in that meeting?

A Laurel showed him -- we both showed him the

space which had at that point been renovated for him and

which -- and he was shown primarily by Laurel the files of

archives which I had which were to be made available to him.

That was principally it at that point. It was another selling

point.

We sort of had arrived at the conclusion at

that point that he would do it. He had agreed to do it.

The final points of the contract had to be worked out so that

they were agreeable to him, but he was at that point willing

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Q Now were you present at any meetings when the

final points of the contract were worked out?

A No, aside from -- no, I really wasn't.

Q And were you present when the contract was

signed?

A Yes.

Q And who was present then?

A Laurel, myself, Omar, Larry Brennan. I believe

also Alan Wertheimer was there. At least for the finalization,

if not for the signing of it.

Q Going back to the prior meeting had you had any

conversations with Mr. Garrison about who was representing

Mr. Hubbard, particularly in connection with who Mr. Garrison

would deal with from the Church of Scientology?

A Well right at the outset I told him that I

represented Mr. Hubbard, that Laurel represented Mr. Hubbard,

and that we would be the people that he would be working with.

He was quite adamant that he would not work

with what he considered church personnel. He stated that he

had run into some difficulties in doing the prior book

"Playing Dirty" and that for that reason, that reason he would

not or did not wish to deal with them.

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He was insistent on dealing with Mr. Hubbard's

representatives.

Q And was always understood by you when you dealt

with Mr. Garrison that you were dealing with him as

Mr. Hubbard's representative?

A Yes.

Q When the contract was signed did you and Laurel

Sullivan represent the interests of Mr. Hubbard?

A Yes.

Q And whose interests did Mr. Wertheimer represent?

A Mr. Hubbard.

Q Who did Mr. Brennan represent?

A The publisher, AOSH DK.

Q Was there an attorney there present who was

representing Mr. Garrison?

A No.

Q Was there any discussion relative to -- as at

the meeting when the contract was signed or at a prior

meeting -- relative to what, if any, control Mr. Hubbard would

have over the biography project?

A Yes. The whole thing was actually under his

control. And the final approval of the biography was to be

his.

Q Was there any discussion relative to monies that

he would receive as income from the biography project?

A That was discussed at some length, principally

between Laurel and myself.

Q What was that discussion?

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A Well, she asked me to make a number of grids which

would reflect the amount of income to Mr. Hubbard and to

Mr. Garrison, given different percentages and different

royalties and given different numbers of books sold and at

different prices. And these, I did at her request.

Q Were these basically financial projections of

what the earnings would be?

A Right.

Q What was your projection for Mr. Hubbard?

A Well, there were various of them. It depended

on the amounts of books sold.

We were talking about -- they ran between 200,000,

500,000, and over a million.

Q Now, were there discussions relative to the values

of the materials collected, aside from income from the book,

the biography itself?

A These were at different times, but there were

discussions on that subject.

Q And were values placed in these discussions on

the materials collected by you?

A Here we are talking about the materials I had

located in Del Sol and that sort of --

Q All of the materials that were going to be

collected for the biography project that belonged to

Mr. Hubbard?

A Yes. We had discussions on that.

Q And what values were discussed for those materials?

MR. HARRIS: I'm not sure I know the referent "we,"

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BY MR. FLYNN: How many discussions were there,

Mr. Armstrong, relative to the value of the materials

collected?

A Probably ten.

Q And who was present in these meetings?

A They were principally between Laurel and myself.

Later there were conversations with the -- with

Mr. Hubbard's attorney Alan Wertheimer and other discussions

with another attorney, Jim Murphy.

We also discussed it, Laurel and I, discussed

it with Virgil Wilhite. And we discussed how to pay Virgil

for his professional services.

Q With regard to discussions between you and Laurel

were you acting as Mr. Hubbard's representatives at that time?

A Yes.

Q And what values were placed on the materials when

you and Laurel had the discussions as Mr. Hubbard's

representatives?

A The value placed, rough value, as I recall, placed

on the materials which I had at that time -- and this was

in the summer of 1980; so I had at that time only accumulated

a portion of what I finally ended up with.

I believe the total came to $5 million as appraised

by Mr. Wilhite.

Q Now, was there value placed on the controller

archives that were under Mr. Vorm with respect to technical

items?

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A To my knowledge, a full appraisal was not done.

I made arrangements to get Mr. Wilhite access

to the controller archives. And I was successful in doing

that. I don't recall the reason that it was not done at that

time. Perhaps it was because Mr. Wilhite moved away for a

period of time.

We tossed around figures, given the amount of

volume that Mr. Vorm said was there.

Mr. Vorm and Mr. Wilhite and I met and discussed

it a number of times.

Q And what were the figures that were mentioned?

A $50 million.

Q Now, when these meetings took place between you,

Mr. Vorm, and Mr. Wilhite, were you acting as Mr. Hubbard's

representative?

A Yes.

Q Who was Mr. Wilhite acting on behalf of?

A Mr. Wilhite was paid by Hr. Hubbard's accounts

personnel to do the initial appraisal of the materials which

I had.

He was also to be paid for the final appraisal.

A distinct differentiation had to made regarding

who paid Mr. Wilhite because -- so that no future problem

would be run into.

I would assume, then -- here is an assumption --

that given --

MR. FLYNN: Don't give us that.

You mentioned future problems; were there

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who you worked for with respect to the biography project and

legal problems that could result therefrom for Mr. Hubbard?

A We discussed that subject a number of times.

Q What were those discussions?

A In that the biography was going to be making a

great deal of profit for Mr. Hubbard, in that I was working

with his personal archives, it would not be possible for me

to continue to be paid by Sea Org, but I was to be paid

directly by Mr. Hubbard a standard wage. And the reason for

that was so that we would not run into an inurement problem

sometime later.

Q Now, with regard to this standard wage, was it

your understanding at that point in time that it was always

Mr. Hubbard who controlled all aspects of your employment?

A Yes.

Q And when these issues were being discussed did

you understand them to be discussed in the context of legal

problems that were then related to the MCCS Mission?

A Yes.

Q And did an attorney participate in those

discussions?

A An attorney did not participate in the discussions

that I had directed with Laurel. But there were similar

discussions with an attorney during that period.

Q And was that Alan Wertheimer?

A Yes.

Q To your knowledge were there discussions between --

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Brennan of PUBS DK relative to some of these problems?

A Did you say discussions?

Q Communications.

A Yes, there were.

Q And the problems being specifically who owned

the archives; was that one of the issues, Mr. Armstrong?

A I don't know if it was addressed as an issue in

which there was any dispute. I think it was assumed.

It was definitely a part of the correspondence

between them.

Q And with regard to your job in collecting the

materials, was that a part of the correspondence between

them?

A Yes.

Q Now, have you seen that correspondence?

A Yes at least some of it. Yes.

Q Under what circumstances was it given to you?

A It was given to me by Laurel who received it

from Mr. Wertheimer.

Q And at that time was she acting as Mr. Hubbard's

representative?

A Yes.

Q And were you acting as Mr. Hubbard's

representative?

A Yes.

Q And was the correspondence given to Omar Garrison?

A Yes.

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Q Now, let me show you a letter -- I believe you

already have that -- dated November 17, 1980.

When the contract was signed was it Mr. Garrison's

understanding, based on the meetings you had with him,

Laurel Sullivan, and Alan Wertheimer that L. Ron Hubbard was

going to get 50 percent of the royalties of the biography?

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MR. LITT: Wait, was it whose understanding?

MR. FLYNN: Was it the witness's?

MR. HARRIS: Excuse me --

THE COURT: I think you asked whether it was

Mr. Garrison's understanding.

MR. FLYNN: I will withdraw it, Your Honor.

Q Was it your understanding, Mr. Armstrong, that

Mr. Garrison was going to get 50 percent of the royalties

and Mr. Hubbard was going to get 50 percent of the royalties?

A Yes.

MR. FLYNN: May this be marked as next in order,

Your Honor?

THE COURT: Double E.

Q BY MR. FLYNN: Do you know who hired

Alan Wertheimer, retained him?

A Only what I have been told.

Q Who told you?

A Laurel.

Q Now directing your attention to sub-paragraph,

or paragraph 3, did you see that correspondence at the time,

Mr. Armstrong, that it was prepared or shortly thereafter?

A Yes.

Q And did that comport with your understanding

that the records that you were collecting were the personal

records of L. Ron Hubbard and did not belong to any

Scientology organization?

A Yes.

Q And, in fact, Mr. Wertheimer so stated; is that

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MR. HARRIS: Well that is a conclusion, Your Honor.

THE COURT: All right. I will sustain the objection.

The letter speaks for itself.

Q BY MR. FLYNN: Now, was it your understanding

that the materials you were collecting were coming from his

personal files and that was also understood by Mr. Wertheimer,

Mr. Hubbard's lawyer?

MR. HARRIS: Objection; compound.

THE COURT: Sustained.

Q BY MR. FLYNN: Now, there is a reference on the

second page who was salaries paid by Mr. Hubbard in out of

pocket expenses in connection with the collection and

compilation of the personal records and the biographical

materials; do you see that, Mr. Armstrong?

A Yes.

Q At the time that was written was it your

understanding that you were the one who was collecting the

materials that was to receive a salary?

A Yes.

Q And what was your understanding with regard to

who was going to pay the salary?

A Mr. Hubbard.

Q And was it your understanding that Mr. Wertheimer

was representing Mr. Hubbard's interests when he stated that

Mr. Hubbard was to receive 50 percent of the royalties under

the contract?

A Yes.

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Q So it was your understanding then that the

project you were engaged in was a profit-making project

for Mr. Hubbard; is that correct?

MR. LITT: Objection; leading.

THE COURT: Overruled.

THE WITNESS: Yes, it was.

Q BY MR. FLYNN: And was it your understanding

that Mr. Hubbard would have final approval for the contract

as set forth in exhibit double E?

A Yes.

MR. HARRIS: Well, just a second, Your Honor. May I

move to strike the answer to interpose an objection?

That is a characterization by Mr. Flynn of the

contract which Your Honor has, which we have no objection

moving into evidence, and then the witness's understanding

is brought in. So the problem with the question is it is

both ambiguous and assumes facts not in evidence.

MR. FLYNN: I will withdraw it.

THE COURT: Well, the only problem, I am looking at

the last paragraph, and, of course, Mr. Wertheimer says,

"In connection with the foregoing however, it must be

understood that Mr. Hubbard must have final approval over

the manuscript."

MR. HARRIS: The manuscript, not the contract as

Mr. Flynn indicates.

THE COURT: All right.

Q BY MR. FLYNN: Well, was it your understanding

that Mr. Hubbard had final approval of the manuscript,

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A Yes.

Q Now, let me show you a letter dated December 2,

1980 from Mr. Wertheimer.

May that be marked double F?

THE COURT: All right, double F.

Q BY MR. FLYNN: Have you seen this letter before?

A Yes.

Q And what are the circumstances under which you

first saw this letters Mr. Armstrong?

A I was given it by Laurel Sullivan.

Q And when was that?

A Right shortly after the date of that letter.

Q And turning to the second page in the first

sentence of the second paragraph, directing your attention

to the sentence:

"Mr. Hubbard already has ownership and

possession of the Archives. If he were inclined

to do so, Mr, Hubbard could, for relatively little

money, engage an author directly and then own

all rights to his own 'authorized biography.'"

A Yes.

Q Do you see that?

A Yes.

Q Did that comport with your understanding that

in your capacity as Mr. Hubbard's representative he owned the

documents you were collecting?

A Yes.

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Q Now those letters are written to a Larry Brennan;

is that correct?

A Yes.

Q Who was Larry Brennan?

A Larry Brennan was at that time in the legal

bureau WW. I believe his title was Branch I Director Legal WW,

and he also apparently represented AOSH DK for I don't know

what broader, in what broader sense than for the biography,

but he apparently represented ADSH DK at the same time.

Q When you say Branch I WW, is that the Guardian's

Office?

A Yes.

Q And did you understand that the Guardian's

Office controlled PDK?

MR. LITT: Objection. What does his understanding

of that have to do with anything?

THE COURT: Sustain the objection.

Q BY MR. LITT: At some point in time,

Mr. Armstrong, did you learn that PDK after the contract with

Mr. Garrison was entered into knew nothing about the

contract?

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MR. LITT: Objection. Leading.

THE COURT: Overruled.

THE WITNESS: Yes

Q BY MR. FLYNN: And when did that occur?

A That occurred in the summer and fall of 1981.

I attempted -- Omar Garrison was supposed to

receive another, I believe, $2,500 in expense money. He had

been paid a certain amount up to that point.

So I attempted to communicate with AOSH DK,

thinking that they would the people to know about this and

to forward the $2,500.

I received communications back from AOSH DK

indicating that they were not going to pay and that they

didn't know anything about the biography contract.

One communication came from the CO or the

commanding officer of AOSH DK.

Q And who was that?

A I forget the name right now. But we have one

communication with the person named. It was -- I believe

it was a Danish name. I really don't recall.

Q Now, exhibit EE and FF set forth various proposals

by Mr. Wertheimer to PDK in connection with Mr. Hubbard's

participation in the biography project; is that correct?

A Yes.

Q And also with respect to the ownership of the

archives; is that correct?

A Yes.

Q And also with respect to the position that you

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A Yes.

MR. LITT: Objection. The documents all speak for

themselves. These are characterizations. There is

specifically no mention of Mr. Armstrong by name in any of

them. So --

THE COURT: They do speak for themselves.

MR. FLYNN: May this be marked next in order, Your Honor?

THE COURT: GG.

BY MR. FLYNN: Mr. Armstrong, what is exhibit GG?

A This is a letter from Larry Brennan to Alan

Wertheimer regarding the LRH biography.

Q And did you receive that in connection with your

capacity as Mr. Hubbard's representative?

A Yes.

Q And was it your understanding as set forth in

exhibit GG that proposals 1, 3, and 4 of the prior letters

of Mr. Wertheimer were agreed to by Mr. Brennan on behalf

of PDK?

A Yes.

MR. HARRIS: His understanding is irrelevant, Your Honor.

The document speaks for itself.

MR. FLYNN: I submit it is relevant, Your Honor, because

of the continuation of his duties thereafter.

THE COURT: All right. Rephrase your question.

Q BY MR. FLYNN: After you saw all of this

correspondence, Mr. Armstrong and after you had these

dealings with Laurel Sullivan and Alan Wertheimer and Omar

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were collecting were owned by L. Ron Hubbard?

A Yes.

MR. LITT: Objection. Asked and answered about four

times.

THE COURT: Sustained.

Q BY MR. FLYNN: After you received these

communications did you continue to have the understanding

and rely on the fact that the materials you were collecting

were owned by L. Ron Hubbard?

MR. LITT: Objection. Leading.

Your Honor, this is -- I mean the witness only

has to answer yes or no at this point. If he is going to

testify to state of mind, he should be asked state of mind.

He shouldn't be asked questions --

MR. FLYNN: I'll withdraw it, Your Honor.

THE COURT: All right.

Q BY MR. FLYNN: What is your state of mind,

Mr. Armstrong, with respect to who owned the biographical

materials that you were collecting after you received this

correspondence?

A L. Ron Hubbard.

Q What was your state of mind with regard to who

you were working for after you received this correspondence?

A L. Ron Hubbard.

Q And for how long did you continue in that capacity

of collecting materials?

A At least until I left the organization in

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Q Now, at some point in time did Mr. Garrison move

into the quarters that were provided to him in the Cedars

complex?

A He never really moved in. In the sense of working

there, he came there sometimes and would work there. He never

did any writing of the manuscript there. He used it as an

office, but it was irregularly and for brief periods whenever

he did come.

Q And at some point in time did he move out almost

entirely or not occupy the premises at all?

A Yes.

Q When was that?

A That would have been probably the spring of 1981.

Q Now, when you provided materials to Mr. Garrison

after the contract was written and before the spring of 1981,

describe the circumstances under which you generally gave

him the materials, where and when.

A Mr. Garrison and I were in very close communication

throughout that period until December of '81. And so we would

make arrangements for meetings. Either he would come into

the office -- at first he came into his office and the office

where I worked more regularly than later on. But either he

would come in or I would meet him somewhere, you know, for

lunch, that sort of thing, or I would deliver materials to

him at his Costa Mesa project.

He also had a home throughout that period in

Utah. And there was once in which I drove up to Utah; there

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I took materials at that time.

But generally it was either he came into the

office at which time I gave to him whatever I had prepared

in the interim since the last time I had seen him, or I went

to his place in Costa Mesa.

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Q All right, now, were any restrictions ever

placed on you by anyone as to what materials you could or

could not give to Omar Garrison?

A No.

Q And what was your understanding, Mr. Armstrong,

as to what you could give to Omar Garrison with regard to

the materials you collected?

A I could give him virtually anything, anything

which I deemed had biographical use.

Q Did Mr. Hubbard ever communicate to you any

restrictions?

A No.

Q Did Mrs. Hubbard ever communicate to you any

restrictions?

A No.

Q Between the time of the contract and the

spring of 1981 approximately how many times did you deliver

materials to Mr. Garrison at his Costa Mesa apartment?

A Six or seven.

Q And up to the spring of 1981 what volume of

materials do you estimate you had given to Mr. Garrison at

that point in time?

A Maybe 10,000 pages.

Q Now were those copies or originals?

A Copies.

Q And who did the copying?

A I did.

Q Were you provided any support staff during that

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A No.

Q And other than your duties copying and giving

materials to Mr. Garrison, prior to the spring of 1981 had

you done anything else in connection with the biography

project other than what you have already testified about

with regard to trips?

A The first date --- since the inception -- since

the signing of the contract?

Q Right.

A There was one trip which you could call a

trip which was done and that was to the Special Unit, to

Gilman Not Springs, and I set up a number of interviews for

Omar. He stayed off the property. He stayed there about a

week, I believe, total, and I went with him and to the La Quinta

property along with another man by the name of Leo Johnson,

and then he interviewed a number of people on the Gilman

Hot Springs property, and all this took place over a period

of a week or so so that was during that time.

Q Now, after -- in the spring of 1981 did you

begin to take some trips with respect to your duties collecting

documents and conducting interviews on behalf of Mr. Hubbard?

A There was another trip which I did with

Omar and his wife, and it took, I recall, probably two, maybe

a little over two weeks and we drove up to Washington State

and then to Montana, and through that trip we interviewed a

number of people who had known Mr. Hubbard in the early

days.

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When I say "early" we mean pre-Dianetics days,

and family members and I went through a number of records in

Helena, Montana, and Bremmerton and Port Orchard, Washington

at that time.

Q Who paid Mr. Garrison's expenses if you know?

A It came form AOSH DK. I don't know where it

ultimately care from because the checks, in fact, came from

World Wide, but I don't know. I don't know what bank accounts

or who it ultimately or whose money it was ultimately.

Q How do you know the checks came from Worldwide?

This is GOWW?

A Right.

Q How do you know that?

A I saw the initial and the second check.

Q Now, who paid your expenses?

A Sea Org reserves.

Q And after that trip, was there a trip to the

Mid-West in July of '81?

A Yes.

Q And how long did that trip last?

A About five weeks.

Q And who went on it?

A I drove a car and then Joscelyn joined me in

Iowa.

Q Joscelyn is your wife?

A Yes.

Q And where did you go on that trip?

A Went to Nebraska, Iowa, Canada and then down

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other points along the way, but those were the principal ones

which had historical interest.

Q And why did they have historical interest?

A I was at that time tracing the geneology of

Mr. Hubbard and his family had come from there.

Q Who paid for that trip?

A Sea Org reserves.

Q And did you conduct that trip as the representative

of Mr. Hubbard?

A Yes.

Q For purposes of the biography project?

A Yes.

Q Now, throughout this period of time did you

have ongoing conversations with Omar Garrison about the

materials you were collecting?

A Yes.

Q And what was the nature of these conversations,

Mr. Armstrong?

A Well, them was the factual setting of the

conversation, what information I had copied for him, what he

needed, what area he was particularly interested in at the

time, and my attempt to provide him whatever information

that would fit into the period or the subject in which he was

then looking.

Additionally there was a great number of

our conversations which dealt with the many misrepresentations

which we were uncovering throughout that period and the

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and copying and providing to him, those differences between

those materials and the PR biographical sketches and the

information which had been provided about Mr. Hubbard in dust

jacket material and about-the-author sections and that

sort of thing.

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Q How often did these conversations take place?

A After the initial couple of meetings with

Mr. Garrison, they took place -- something in the nature was

discussed -- almost in every conversation with him. Something

like that would cone up in almost every conversation.

Q How quickly after the contract was signed did

you begin bringing documents to Mr.Garrison

A The same day.

Q And from that point on you and he discussed

differences between what was in the documents and what had

previously been represented about Mr. Hubbard?

A No. It actually took a few days. I didn't say

anything initially to Mr. Garrison about any discrepancies.

It initially came up when I provided Mr. Garrison

a number of letters between Mr. Hubbard and his first wife.

And that would have been perhaps a week after the beginning

of our contractual relationship together.

Q And from there to the time you left the

organization in december, 1981, can you estimate how many

conversations you had with Mr. Garrison about the discrepancies

between what was in the documents and what had previously

been represented about Mr. Hubbard?

A I would say that during that period there would

have been a hundred such meetings and conversations, either

by telephone or in person.

Q Now, did Mr. Garrison during these conversations

begin to discuss with you the probability of the biography

ever being approved?

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A Yes.

Q And when did that subject first arise?

A It began to arise sometime probably in early 1981.

Q And what was said at that time?

A There were -- there were a couple of anticipated

problems, one of which was the fact that there was no way

in which the biography could apparently be approved because

there was no line of communication to Hr. Hubbard at that

time or no line which, at least, could be admitted to.

So that was one of the problems which he faced.

Another one was the fact that he was -- together

we were uncovering this drastic difference between what the

PR had been up to that time and what the facts actually were.

And he felt that Scientology and, more

particularly, Mr. Hubbard could not stand to see the facts

about the man. And he was in the position of wanting to do

an honest biography and not wanting to write what he called

a puff. And he felt that as a result, he was going to

continue on, but he felt that ultimately, as he said many

times, the book would never see the light of print.

Q And did he use a term to describe that, the fact

that there were misrepresentations and for that reason the

book would never see the light of print?

MR. LITT: Your Honor, these are all hearsay statements.

I don't understand what they have to do with.

THE COURT: They are all part of the sequence of events

that led up to the ultimate situation, state of mind,

circumstances, background.

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You may answer.

THE WITNESS: Yes. I'm not quite sure what you mean

by a particular word.

Q BY MR. FLYNN: Was there a term 'coperphilia"

used?

MR. LITT: Should I bother suggesting that that was

leading, Your Honor?

THE WITNESS: I knew the word, but I just didn't know

how admissible that -- such a thing would be.

Yes, there was. He referred to the followers

of Mr. Hubbard as coperphiliacs.

Q Did these discussions continue right up to the

time you left the organization?

A Yes.

Q Now, at some point in time did discussions begin

about the fact that you and Mr.Armstrong -- you and

Mr. Garrison could be subject to attack by the organization

for finding out the truth about Mr. Hubbard?

A Yes. We had many discussions like that.

Q And when did those discussions begin?

A They began in the fall of 1981.

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Q And do you recall the first such discussion?

A There was a point at which -- yes, I do.

Q And when was that?

A It followed an incident where I was called

to SU as a result of Norman Starsky who I knew at that point

to be the second in charge of Mr. Hubbard's legal missions,

to be called -- I was called to SU to be sec checked regarding

what material I had provided to Mr. Garrison.

Q Now at that point in time what was your under-

standing as to Mr. Starsky's authority to act on behalf of

anyone in the Church of Scientology?

A I never considered him in relation to the

Church of Scientology. I understood at that point that he was

in charge of the LRH legal mission, that he was in the CMO

or was a CMO Missionaire and at that point he was involved in

dealings with new attorneys which had been retained to handle

Mr. Hubbard's legal problems.

MCCS at that point had been disbanded.

Laurel Sullivan had been pulled out to SU to pull weeds and

a new mission had been established, and part of this new

mission, the second in charge of the new mission was

Norman Starsky. So I asssumed that he was performing basically

the same functions as Laurel Sullivan and that he was

Mr. Hubbard's legal mission.

Q Now at that point in time when was the last

time you had a communication from Mr. Hubbard?

A The last one I got, which was alleged to be

from Mr. Hubbard, was some time in the late spring, early

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a messenger had delivered to Laurel Sullivan asking for a

copy of the "Excalibur" manuscript to be sent to him, so

I made a copy at that point and wrote a letter to Mr. Hubbard

and sent it to him.

Q Now between the time you assumed your duties

on the project and this period in the fall of 1981, did you

have any knowledge of where L. Ron Hubbard was?

A From the point I began the project?

Q Correct.

A At that point I knew that he was in Hemet.

Thereafter I did not know where he was.

Q Did you have any knowledge as to who was with

him?

A Yes.

Q And who was with him to your knowledge?

A Pat and Annie Broeker.

Q Who are Pat and Annie Broeker?

MR. LITT: Is this personal knowledge or was he told

this, too?

Q BY MR. FLYNN: Where did you get this knowledge

from, Mr. Armstrong?

A From Laurel and it was generally known among

those of us who were at that level in the organization, and

it could also be arrived at simply by two methods, by who was

missing and by the fact that in late 1980 or early 1981

Mr. Hubbard sent down a manuscript which later was published

as a book "Battlefield Earth."

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And there was a proof, an initial proofreading

and notes which were done, and they were in Pat Broeker's

handwriting.

Q And did you see those?

A Yes.

Q And do you know Pat Broeker?

A Yes.

Q And at that point in time how long had you

know him?

A For about nine years.

Q And were you familiar with his handwriting?

A Yes.

Q And during that nine-year period did you

become familiar with the posts that he had held for Mr. Hubbard?

A Yes.

Q And what was your understanding at that time

what post Pat Broeker held?

A That he held or up to that point?

Q Up to that point in time.

A When I knew him on the ship, he was in the

accounting, either as an FBO; that is, a Flag Banking Officer

or someone who dealt with organization moneys.

When we moved to Clearwater in Dunedin, he was

on an ALR Missan along with his wife at the time,

Trudy Broeker, and they were in charge under Hubbard of a

particular aspect dealing with the move into Clearwater.

Thereafter, he was with Mr. Hubbard in La Quinta

and performed -- he was at that time appointed as a messenger.

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Some time during that period he married Annie,

formerly Annie Tidman, Annie Rush, and the two of them were

considered high level messengers. There is various echelons

within the Commodore's Messenger organization, and they

were up near the top.

From 1978 Pat was involved as a messenger with

the movie production, and he would accompany Mr. Hubbard to

the set and carry out or have Mr. Hubbard's orders carried out

on the film production set.

In 1979 he was with Mr. Hubbard in Hemet and

in 1980 also he arrived with Mr. Hubbard a number of times,

so I saw him several times in 1978 when he would arrive with

Mr. Hubbard in a van. Mr. Hubbard arrived at the property

in a van and I would see Pat with him at that time.

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In 1980 Pat and Ann Broeker and Mr. Hubbard went

into hiding.

Q Now, after 1980 up to the time you left the

organization, December, 1981 did you become familiar with

the command lines at the top of the organization from L. Ron

Hubbard to Laurel to you?

A Yes.

Q And what were those command lines?

A From Mr. Hubbard via the people who were with

him, Pat and Ann Broeker via David Miscavige down in the CMO

or into the personal office.

Q Who is David Miscavige?

A David Miscavige was a messenger who, after

Mr. Hubbard left in 1980, took over under Mr. Hubbard, the

command or control of personal office CMO and all of the

Scientology network.

Q How old was David Miscavige at the time?

A I don't know. He was quite young.

Q Between -- throughout the period of time that

you were on the biography project did messages from

Mr. Hubbard come through Pat Broeker and David Miscavige to

Laurel Sullivan?

A I don't know about Pat Broeker.

All I was told about Pat Broeker -- but I knew

they came via David Miscavige.

Q Was that the routine command lines for

communications from Mr. Hubbard throughout 1980 and 1981?

A Yes.

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Q And was there an understanding at your level in

the organization in 1980, 1981 as to who was with Mr. Hubbard

at that time?

A Yes.

Q And who was that?

A Pat Nanenbroeker --

MR. LITT: Objection. He is not now speaking of his

own understanding; he is speaking of a collection of

understandings.

THE COURT: It is more or less the reputation of the

organization. I'll let it stand.

Q BY MR. FLYNN: Do you know Mr. Starsky worked

for?

A Yes.

Q Who did he work for?

A At that time the chain of command to Norman

Starsky ran from Norman, who was the second in charge of the

special -- what was called special projects up to his senior,

Terry Gamboa to David Miscavige and then on up to Hubbard.

Q Terry Gamboa is your ex-wife?

A Yes.

Q In october, 1981 before your meeting with

Mr. Starsky did you write a request to the commanding officer

of the CMO relative to certain events that were taking place

in connection with your wife Jocelyn?

A Yes.

Q And at that time who was the commanding officer

of the Commodore's messenger organization?

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A Gale Irwin.

Q And do you know where Gale is today?

A I have been told that she is in San Diego.

MR. LITT: Objection.

THE COURT: It is his state of mind, It is not evidence

that she is there. It is his state of mind,

Q BY MR. FLYNN: Why did you write to Gale Irwin

the commanding officer of the Commodore's messengers?

A Because at that time my wife Jocelyn, who was

then known as Joyce, she was in charge of a legal mission

dealing with a new Scientology entity which had been created

by Mr. Hubbard called Scientology Missions International,

SMI.

Q Had she been receiving communications from

Mr. Hubbard regarding SMI?

A I don't --

MR. LITT: Objection. Is this personal knowledge now,

or what his wife told him?

MR. FLYNN: I'll withdraw it, Your Honor,

THE COURT: All right,

BY MR. FLYNN: Go ahead, Mr. Armstrong.

MR. LITT: I thought you withdrew the question.

Q BY MR. FLYNN: With regard to why you sent the

letter to Gale Irwin.

A We were talking throughout that period and she

informed me that she was very concerned because she was being

asked to do things which, in her opinion, were illegal and

that was the back dating of various legal documents, board

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She was not trained in legal and she had asked

people who should have that type of information and she

received two different answers: one, that it was okay and

one, that it was absolutely illegal.

She was very concerned about this. And part of

her concern -- she expressed it to me -- was that when the

so-called --- the 11, the criminal 11, were indicted and then

convicted, just prior to this, there was a PR campaign within

the organization to discredit these people and to make it

look like they were acting on their own when in fact they

were being made scapegoats. and this was in her opinion and

it was in my opinion.

She felt the same thing could happen to her; that

she was doing things which were illegal and that if it ever

came down to it, the organization would not stand behind her

and they would say she acted on her own and was doing these

illegal things.

So she was very concerned. And I, because of

my position and because of the fact that I was doing what

I was doing and had some organizational altitude and was

working for Mr. Hubbard, I wrote to the COCMO, Gale, who was

actually over the Scientology Missions International setup

and requested that Jocelyn come to work for me.

And finally, Gale did approve it and my wife did

come and work in the PR bureau specifically on the biography

project.

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Q Now to that point in time had you had any

assistance copying materials that you were giving to

Omar Garrison?

A No.

Q And what duties did your wife undertake at that

time with regard to copying materials to give to Omar Garrison?

A Well she really took over the totality of the

copying and because she was doing that, I was freed up to do

other things and she did mountains of copying.

MR. FLYNN: May this be marked as the next exhibit in

order, Your Honor?

THE COURT: All right, double G -- are we up to double H?

Q BY MR. FLYNN: When did she actually begin

working copying materials, Mr.Armstrong

A It would have been the last week of October

1981.

Q Up to that point in time taking the total

amount of materials that finally ended up in the hand of

Mr. Garrison before your wife Joyce started working, what

percentage of materials had you already given to Mr. Garrison

of the total amount?

A Of the total amount that I would give him?

Q Right, the total amount that was eventually

given, up to the time that your wife started work,

how much had you given him to that point in time?

A Probably half.

Q Now, when she started working, did she begin

copying documents and giving them to Mr. Garrison

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A Yes.

Q And for how long did she do that?

A Aside for a week or -- I am not exactly sure,

somewhere around a week, five days or a week, when we took

a trip up to Carson City, Nevada which would have been in

November, she copied throughout that period from the end of

October to the time we left in December.

Q Did you take the materials to Mr. Garrison

during that period of time or did she?

A To my recollection I always went. Sometimes

she went with me, but I think that I always delivered them.

Q And how long before the meeting with

Mr. Starsky did that take place?

A Probably a couple of weeks before I actually --

the first time I spoke to him in relation to the biography.

Q Now when you first spoke to Mr. Starsky, did

he demand to know at that time what documents you had given

to Mr. Garrison?

A No.

Q When did he first make that demand?

A That was in a communication which he wrote to

the CMO at SCU in which he ordered that I be sec checked.

Q Now, a "sec check" is again what, Mr. Armstrong?

MR. LITT: Objection; it has already been testified to.

Q BY MR. FLYNN: That is a security check?

A Yes.

Q As a result of that request by Mr. Starsky to

come and be sec checked, what did you do?

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A Well, I showed up at Gilman Hot Springs and I met

with the person who had called me out there, Cirrus Slevin

who was then in the Hubbard communications office within the

CM0. She was what you call an ethics person within the CMO,

ethics in a Scientological sense.

Q What does that mean?

A The person in charge of discipline or punishment.

Q And did you meet with her?

A Yes.

Q And did you have a conversation with her?

A Yes.

Q And what was that conversation?

A During that conversation she showed me

Norman Starsky's letter which he had written to her and which

he had ordered the sec check. I talked to her and explained

what I had said in the conversation with Norman Starsky and

that I had simply done what I had done in providing whatever

I had provided to Mr. Garrison, and that Mr. Garrison was

capable of reading the materials which I had provided and

making a rational decision, and that I did not agree with

Mr. Starsky's claim that I was speaking out in favor of

L. Ron Hubbard's son against the organization or that I felt

that L. Ron Hubbard's son was correct and Cirrus Slevin at

that point accepted by explanation, and I said that I would

put --- I would write her a report and I would get together

with Mr. Starsky to sort out any problems that there might

be.

Q Now did you have -- was part of that conversation

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background?

A Yes.

Q And did you write a report?

A Yes.

MR. FLYNN: May this be marked as the next exhibit

in order?

THE COURT: Double I.

Q BY MR. FLYNN: How long after your meeting with

Cirrus Slevin did you write the report?

A This would have been within a day.

Q And what was the purpose of writing the report,

Mr. Armstrong?

A The purpose was to make it very clear that

contrary to what Mr. Starsky had said, I was not seeking to

attack Mr. Hubbard.

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That I was simply seeking to have whatever truth

we could find brought out and to not continue to promulgate

false information about the man which ultimately would come

back to harm him.

And I sought to let her know of what I had found,

at least in part, and the problem that I was running into

in the hopes that a bigger view of the whole situation would

be taken than what I considered sort of a myopic view which

Mr. Starsky had taken.

THE COURT: We'll take a recess at this time. We'll

reconvene at 1:30.

(at 11:58 a.m., a recess was taken

until 1:30 p.m. of the same day.)

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---0---

THE COURT: In the case on trial, let the record reflect

that counsel are present; the witness has retaken the stand.

State your name again for the record, sir. You

are still under oath.

THE WITNESS: Gerald Armstrong.

THE COURT: You may continue, counsel.

 

GERALD ARMSTRONG,

the witness on the stand at the time of recess, resumed the

stand, having been previously sworn, and testified further

as follows:

DIRECT EXAMINATION (Resumed)

BY MR. FLYNN:

Q Exhibit II dated November 25th, 1981,

Mr. Armstrong, you were testifying about; how was that

delivered to Cirrus Slevin, if you know, by hand, or by mail?

A I have got there "care of CECP."

Our mail, that is, the mail which I had to go

out to the special unit, I dropped in an office called CECP.

That was Commodore's external COM PAC. And that was the --

what before was the LRH external COM Bureau.

Q Now, this is sent to HCO COPE Int?

A HCO is the Hubbard Communications Office which

is a division within the CMO. The COPE officer was a position

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required someone to cope with them.

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Q And where was that post located?

A At that time it was at Gilman Hot Springs.

Q Now, you refer to Norman Starsky's report in

exhibit doubt I; is that correct?

A Yes.

Q And how long before you wrote exhibit double I

did you see Norman Starsky's report?

A Within a day of that.

Q And Norman Starsky again was in the Guardian's

office?

A No. Norman Starsky was -- I have noted here

he was special project second NS. Special Project was the

project which at that time was taking care of L. Ron Hubbard's

legal affairs.

Q Approximately how long was Norman Starsky's

report if you recall?

A I believe it was two pages?

Q And essentially what did it say?

A He ordered that I be sec checked because --

to find out what documents I had given to Omar Garrison.

He mentioned that I appeared to be -- that I was in favor of

or siding with Nibs.

Nibs was L. Ron Hubbard, Jr. or Ron De Wolfe.

In any case, he was L. Ron Hubbard's first son, and Starsky

also mentioned something about my claim that L. Ron Hubbard

was stating that he was an atomic physicist.

Q And did he indicate that you were claiming

that L. Ron Hubbard was not an atomic physicist, contrary to

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A No. The situation I ran into with Norman was

that I was saying that Hubbard wasn't an atomic physicist and

he said, "Well, he never ever claimed to be."

And I showed him a book in Hubbard's own

handwriting in which he claimed to be an atomic physicist,

and that is what he mentioned in his dispatch to Cirrus.

Q Now, about this time did an individual named

Vaughn Young begin to come into the picture?

A I believe some time prior to this Vaughn had

actually become involved with the biography project.

Q And how much before this?

A Possibly a month.

Q And what was Vaughn Young's position at the time?

A He was in the Guardian's Office public relations

bureau.

Q Now, referring you to the fifth paragraph on

the first page of exhibit double I, you note some materials

prepared by an enemy researcher Michael Shannon; what does that

mean?

A some time prior to this but still in 1981,

possibly in the summer or earlier, maybe even in the spring

of 1981, I had learned first of all through an old Dianeticist

from Tennessee with whom I was in contact, his name was

Perry Chandelan of the existence of this person, Michael Shannon,

who was assembling information on L. Ron Hubbard, and

Perry Chandelan sent me a pack of materials which had been

prepared by Shannon.

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That was the first time I knew of Shannon.

I learned more about Shannon throughout 1981.

Q You say that much of Shannon's material is

accurate; is that correct?

A Yes.

Q Now, in the next paragraph what do you mean

when you say that the facts that have been presented, if

disproved, will make outsiders at least think that L. Ron

Hubbard is a charlatan?

A Well, Mr. Hubbard and the organization had at

that point for 30 years been putting out information about

Mr. Hubbard and about has history and his accomplishments

and he credentials and educational background, which I knew

at that time to be untrue, and I felt like if we didn't

correct them and if they were disproven, which they were

being disproven by the media and more particularly by

Michael Shannon, that Hubbard would end up looking like a

fraud, you know, unless we took steps to correct it.

Q Now, did you have a general understanding at

the time that you wrote exhibit double I that thousands of

Scientologists throughout the world had relied on

L. Ron Hubbard's background?

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MR. LITT: Objection.

MR. HARRIS: I object to his understanding. It is

irrelevant.

His state of mind might be.

THE COURT: What is the difference between understanding

and state of mind?

MR. HARRIS: I'm not sure, Your Honor, because Mr. Flynn

uses understanding seemingly always when he means state of

mind.

Understanding, strikes me as an agreed upon

reality. And this witness' state of mind might not have been

agreed upon by anybody except himself.

THE COURT: Why don't you ask what his opinion was?

MR. HARRIS: That's fine, Your Honor.

Q BY MR. FLYNN: What was your opinion,

Mr. Armstrong, as to whether Scientologists throughout the

world had relied upon the honesty of L. Ron Hubbard?

A I thought they had.

Q And with regard to the background and educational

background of L. Ron Hubbard, what was your state of mind

with regards to that?

A I felt that Scientologists generally relied on

that.

Q You see at the top of page 2, ". . . even in our

system it would be severely dealt with if someone pretended

certification."

What do you mean "in our system"?

A Well, within the broad Scientology network with

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certification that one didn't have.

Q What do you mean "a crime"?

A Within Scientology.

Q Was that a term that was used, "crime"?

A Yes.

Q And what did the term mean?

A It was a particular offense within Scientology

for which one could be punished.

Q To falsify their credentials?

A Right.

Q Now, you go on to recite the various

misrepresentations you had found about L. Ron Hubbard; is

that correct?

A I went -- I listed a number there which I found

in a particular document which I believe I attached to the

letter. The document isn't here, but it was attached. And

it was on this particular item I called the data sheet on

Lafayette Ronald Hubbard.

I extracted from that a number of items which

were inaccurate or unprovable or hyperbole.

Q In whose handwriting was the data sheet?

A Mr. Hubbard's.

Q On page 4 you state that, ". . . it is not logical

that I should be targeted for digging up the facts" in the

first sentence of the second paragraph. What did you mean

by that?

A I felt that I had been targeted by Norman Starsky

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He had ordered that I be Sec Checked. And I felt

that was extremely out of line when in fact I was trying to

investigate, as a researcher would, to find out what the facts

were.

Q And on the top of page 5 you say, ". . , Nibs.

What I stated was the situation with Nibs was to a great

degree our creation. He has been mishandled and dealt with

dishonestly."

What did you mean by that?

A Nibs was L. Ron Hubbard's son. And just prior

to this I had gone to Carson City along with Omar Garrison

and we had met Nibs.

I had also, prior to going to Carson City, was

briefed on the situation with Nibs by Guardians Office

personnel. I was given a time track of data collected on

Nibs.

I was told by a GO intelligence officer by the

name of Peter Alvette that they had someone in close to Nibs

that was Ford Schwartz --

MR. LITT: Is this all for state of mind?

THE COURT: He is explaining his letter and the

circumstances.

THE WITNESS: I also knew by that time that many people

had been writing to Nibs and signing these letters, originating

them and signing their, as if they were from L. Ron Hubbard

when in fact they were not. And that this was, at least,

the dishonesty that I had in mind when I wrote this

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