SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES

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

CHURCH OF SCIENTOLOGY OF CALIFORNIA, Plaintiff, vs. GERALD ARMSTRONG, Defendant. MARY SUE HUBBARD, Intervenor.

) ) ) ) ) ) ) )

No. C 420153

REPORTERS’ DAILY TRANSCRIPT

Tuesday, May 22, 1984

VOLUME 17

Pages 2662-2850, incl.

APPEARANCES:
(See Volume 15)

NANCY L. HARRIS, CSR #644 HERB CANNON, CSR #1923

INDEX FOR VOLUME 17

DAY	DATE	SESSION	PAGE
Tuesday	May 22, 1984	A.M.	2662
		P.M.	2750

WITNESSES

DEFENSE WITNESSES	DIRECT	CROSS	REDIRECT	RECROSS	VOIR DIRE
ARMSTRONG, Gerald (Resumed		2662	2674		2728-F
			2729
			2844
HUBBARD, Mary Sue	2751	2828	2835	2842

EXHIBITS

DEFENSE EXHIBITS	IDENTIFIED
DDD - Photograph	2680
EEE - Document "CIC X Mark Sheet"	2695
FFF - Letter dated 8-14-82	2707
GGG - Armstrong notes	2709
HHH - Confidential Pack 1 of 3	2719
III - "Operations, definitions, button survey"	2727
JJJ - Document from "Arden’s PC folder" dated 7-28-72	2805
MMM - Form on Kermit V. Miller	2810
NNN - Form on Emmylee Lynn	2810
OOO - "Intel Weekly Report" for 6-29-72	2812
PPP - Letter beginning Dear Henning:	2815
QQQ - Letter to "DGUS"	2816
RRR - Excerptions of IRA H PC Files	2819
SSS - Not described	2843

ii

EXHIBITS (Continued)

PLAINTIFF’S EXHIBITS	IDENTIFIED
68 - Booklet L. Ron Hubbard	2672
66 - Letter starting "Dear Red"	2666
67 - Letter dated 9-30-29	2667
69 - Conveyance of freehold property St. Hill Manor dated 11-16-72	2673

2662

LOS ANGELES, CALIFORNIA; TUESDAY, MAY 22, 1984 9:02 A.M.

-oOo-

THE COURT: Okay. We are back in session.

GERALD ARMSTRONG, having been previously duly sworn, resumed the stand and testified further as follows:

THE COURT: State your name again for the record, sir. You are still under oath.

THE WITNESS: Gerald Armstrong.

THE COURT: All right, you may continue, Mr. Harris.

MR. HARRIS: Yes, thank you. Your Honor.

CROSS-EXAMINATION (Resumed) BY MR. HARRIS:

Q I gave you exhibit 65 to look at last night, Mr. Armstrong.

Did you bring that back with you?

A Yes, it is over there with Mr. Flynn.

MR. HARRIS: You have your own copy, correct, Mr. Flynn?

MR. FLYNN: What does that say? We apparently didn’t mark it yesterday afternoon.

THE WITNESS: It is marked on the bottom 65.

MR. HARRIS: It starts out, "Aboard OSS Gold Star at Sea."

2663

Q BY MR. HARRIS: Have you had an opportunity to review exhibit 65, sir?

A I had an opportunity. I didn’t, but I am to some degree familiar with it.

Q All right. Now, exhibit 65 puts Mr. Hubbard aboard the OSS Gold star at sea October 6, 1928; did you make a time track of where he went on the USS Gold Star?

A Nothing other than this document itself.

Q And at page 36 of that document he appears to be off the coast of China; right?

A Correct.

Q And the next page has him leaving Tsingtau, T-s-i-n-g-t-a-u; right?

A Yes.

Q And then it appears that he goes into Peking; is that correct?

A He must have docked somewhere, I guess.

Q Page 42 dated November 11, 1928, "I have just returned from Peking, the Civic Center of old China"; do you recall that?

Q By the way, you said that Mr. Hubbard noted that the Llamas in Peking sounded like bull frogs?

A I believe that is the case. Somewhere he mentions them as — "Bhudist [Buddhist] Temple –"

Q Could you look at page 44 of that?

"The people worshipping had voices like bull frogs and beat a drum and played a bass horn to accompany their singing"?

2664

The worshippers sounded like bull frogs?

THE COURT: It says "… had voices like bull frogs."

MR. FLYNN: The worshippers, Your Honor.

THE WITNESS: You think the worshippers are not the Llamas?

Q BY MR. HARRIS: Do you know that they are?

A Well, I have heard Llamas chant. And they sound like bull frogs.

Q To you?

A I think Mr. Hubbard corroborates it.

2665

Q Let me ask you this: At the bottom of that page it talks about "The western hills are filled with these very same temples." Do you note that?

A Okay.

Q Was there a period of time, Mr. Armstrong, that the documents that you had in your possession showed nothing insofar as the years 1928 and '29, as far as where Mr. Hubbard was?

A That they showed nothing?

Q Yes, that you didn’t know where he was one way or the other.

A Well I think when I set out on the project initially, the major documentation which I had was the PR packs which indicated that he was both studying under Commander Thompson and wandering around Asia through those years, so that was what I had at the outset.

Q Well, in researching Mr. Hubbard’s Asian travels, did you check with any governmental agency to see if you could find further documentation of where he was in 1928-29?

A No.

Q Did you check with the government of Guam to see if you could determine where he was in 1928-29?

A No I had records from his father and a statement from his father that was provided for getting Mr. Hubbard into school, and those showed pretty well where he was during particular periods.

Q That was a documentation from his father

2666

of where Mr. Hubbard had been during the years '28 and '29?

A Basically. It laid out the time that he had spent in Guam in any case.

MR. HARRIS: I have a document, Your Honor, which appears to be a letter "Dear Red" which I will show the original to the court of. I have a Xerox copy.

Q Do you recall seeing exhibit 66, Mr. Armstrong, in your archives?

A Yes.

MR. HARRIS: Sorry if I didn’t mark it. I thought I did; 66.

THE COURT: All right, be so marked.

Q BY MR. HARRIS: You passed that letter on to Mr. Garrison; is that correct?

A Yes.

Q And some evidence of the period when Mr. Hubbard was in Asia?

A Yes.

Q And from the period where that letter which is apparently addressed to Mr. Hubbard on Guam, from that period to September 30, 1929, did you have anything in your archives which showed where Mr. Hubbard was?

A I believe so, but I can’t tell you for sure at this instant.

Q In fact, from January 1928 to September of 1929 you didn’t have anything in your archives which put Mr.  Hubbard anywhere?

2667

A I think that there is some correspondence from Harry Hubbard which shows where he is.

Q And is that under seal?

A I believe so. There is at least one document under seal which refers to that or lays out part of the picture in any case.

MR. HARRIS: I have a document letter, Your Honor, Helena, Montana, September 30, 1929. May this be Barked exhibit 67?

THE COURT: Yes.

Q BY MR. HARRIS: Within the archives, Mr. Armstrong you had that exhibit; did you not?

A It is very possible.

Q September 30, 1929, at least if the letter is to be believed, Mr. Hubbard is now in school?

A Yes.

Q Now did you check any of the passenger manifests of any of the vessels indicated in the diaries that you now had a chance to see?

A I believe that in — there was a check done and I don’t recall which vessel, one of these ones mentioned and –

Q The Gold Star?

A I don’t recall which one.

Q Who did that?

A I saw information on that in the archives. I don’t recall if it was the Gold Star or if it was from the earlier trip.

Q Now, in respect to Mr. Hubbard’s trips to China,

2668

the Peking trip that is indicated in exhibit 65, was that the YMCA trip that you are talking about?

A I believe there is something that shows that this was the YMCA trip. I can’t tell from this document itself. There was a mention, I think, of the Y in there, but I don’t think it is in connection with the trip. There is a reference in there indicating that it was a trip which was done with his parents.

2669

I can only deduce that from photographs which were taken from that period, some of which were in archives.

Q The documents that contains the reference to the YMCA trip is in exhibit 65?

A No. There is something else which — there is, I believe, a mention of the YMCA in here, but I don’t think that this mentions the trip exactly.

Q What is the document from which you concluded that this was the YMCA trip; that is, the one that is outlined in exhibit 65.

A There were some tickets from Mr. Hubbard’s materials and some mentions in some other notes. And there is something about the time, being able to date it by the time and by the length of time spent on this — on his tour of Peking.

Q Well, is it your testimony, Mr. Armstrong, that Mr. Hubbard was only in Peking one time in the years 1925 through 1929?

A Well, what I was able to show was one time; whether or not he was there when documentation showed him to be somewhere else is impossible to say at this point.

What was obvious to me was that between 1924 and 1929 he had not been wandering around Asia. That was the predominant fact.

Within that, not to take anything away from Mr. Hubbard, he did touch down from aboard ship in a number of ports. And he did, apparently take a tourist’s tour of Peking. I am aware of those things.

2670

But at least within the documents that you had, you were unable to conclude that he had been in Peking more than once; is that correct?

A That is correct.

Q All right. Now, you made some search for Commander Thompson, did you not?

A Yes. There was a number of searches which were done — gone through records of — any records of Freud’s students or to establish during this period of several years when Mr. Hubbard was supposed to have been studying with Commander Thompson any note about Thompson or any possible place that they could have been together.

Q When you say –

A There was a reference on a tape that he had met Commander Thompson while going through the Panama Canal. And I found one of his diaries about going through the Panama Canal. And although many things are mentioned in it, there is nothing about Commander Thompson in it during that period.

Q When you say –

A I was also able to ascertain, as Mr. Hubbard was, in Helena, Montana, Bremmerton, Washington, and other places throughout that period, it seemed like the contact with Commander Thompson was minimal and certainly not four years in length.

Q When you say, "It was done," what do you mean, that you did it, or you directed somebody else to do it?

A What are you referring to as "it" right now?

Q Well, you said an attempt to find Commander

2671

Thompson; it was done. I want to know what did you do, Mr. Armstrong, to find Mr. Thompson?

A As I said, I obtained a number of books regarding Freud to find any record of Commander Thompson among those people who had studied with him and was unable to.

The only positive record of a Commander Thompson that I found was a Commander Thompson who in 1945 signed a form, apparently, for Mr. Hubbard.

And then I was able to determine that the number of medals Mr. Hubbard was claiming on this form were in fact not valid at all and that — that is what I was able to determine.

Q And have you now told me all that you were able to determine about Commander Thompson, Mr. Armstrong?

A Other than what Mr. Hubbard had said about Commander Thompson, yes.

Q Did you contact the Freudian Institute in Vienna, Austria to find out who the students were at the time?

A No.

Q Did you check the government publications of active and inactive officers?

A No. We didn’t have a name for him, just "Snake" just Snake Thompson.

2672

Q By the way, in your direct testimony you indicated that you though the organization would not allow a truthful biography of Mr. Hubbard to be written; is that correct?

A Yes.

MR. HARRIS: I have a document "L. Ron Hubbard," Your Honor, a booklet. May that be marked exhibit 68?

THE COURT: Very well.

Q BY MR. HARRIS: Directing your attention to exhibit 68, did you see that while you were still in the organization?

A It is possible.

Q Who was that written by, Mr. Armstrong, if you know?

A Well there were three people who worked on such a work, and I don’t know if this is a compilation or — I don’t know that I ever saw the final form. One was Harry Haber. One was Joe Burgess. One was what is her name — Julia Watson, and all of those people were involved in the latter part of 1981 or the summer of '81 writing.

Q And you, in fact, had communications with those people about what was going to go in the biography; is that correct?

A They came in and used the archives and wrote in the area where I was; not Julia. She didn’t sit down and write there. The other two did. Julia borrowed a lot of material in the archives.

Q And they didn’t talk to you or consult with you about what they were doing, Mr. Armstrong?

2673

A Oh, yeah. They asked me for information, certainly.

Q And you gave it to them?

A Yes.

Q And some of it showed up in what you now have as exhibit 69 — excuse me, 68?

A It may have. This isn’t exactly how I recall it, but it probably did if this is their product.

Q Well, you know that that is their product; don’t you?

A No. As I say, I don’t believe I have ever seen this final thing like this, but I saw, when they were doing a work like this, I saw the manuscript. I didn’t see the final document.

MR. HARRIS: All right. I have a document, Your Honor, dated 16 November, 1967, conveyance of freehold property known as Saint Hill Manor. May this be marked exhibit 69?

THE COURT: Yes.

Q BY MR. HARRIS: Would you look at exhibit 69, Mr. Armstrong, and tell us if you have seen that in your archives?

A It is very possible I did. I don’t believe that I ever — it may have been copied, but I don’t recall.

MR. HARRIS: No further questions.

THE COURT: All right. Well, Mr. Flynn, you have a right to redirect examination.

MR. Flynn: Thank you, Your Honor.

Your Honor, before I begin, I had let Mr. Litt

2674

know that my witness after Mr. Armstrong is Mrs. Hubbard.

MR. LITT: She will be here at 10 o’clock, Your Honor.

MR. FLYNN: Fine.

MR. LITT: Or between 10:00 and 10:15, I should say.

REDIRECT EXAMINATION BY MR. FLYNN:

Q Mr. Armstrong, let’s focus in on the period immediately after Mr. Wilhite told you that Lyman Spurlock, an attorney, had the pictures. That is the time period we are dealing with.

Now, after you saw Mr. Wilhite and you went to the church property and you had a conversation with people at the church property, what was the nature of the conversation with regard to the two sets of photos from the Dincalcis and the Douglases as to whether or not you had stolen them; what was said?

A There was not a statement that I had stolen them at that time. There was a statement that they were stolen.

2675

That they were not — that they did not belong to the Douglases and the Dincalcis. This was one of the reasons — there was a couple of reasons put forward on why they were not going to give them back.

One of them was because the organization people that I was speaking to — and the person who spoke the most was Steve Marlowe. And his statement was that they are not very favorable.

Q Now, who was Steve Marlowe?

A Steve Marlowe was a person who was in what is called RTC. He is a CMO member and was part of RTC, Religious Technology Center. It is virtually all the sane thing, but that is the designation inside at that time, RTC.

Q Now, what is the difference between the three sets of photos, the photographs that you had relating to your wedding, the photographs that came from the Dincalcis and the Douglases?

A Well, I guess there is a number of differences. They are from different times and different places.

The reason, my photographs concern an event which took place in 1974 on board the Apollo. And it is a known event and of no particular legal significance.

The other ones appear — and this is what later appeared in my mind as the reason for them — one of the reasons, at least, for them being stolen, and that was that they concerned periods of time; one of them, shots, taken in Queens, New York in 1973 when Hubbard was hiding as a result of his fear of being extradited in the French fraud.

2676

case. He felt that the French were going to show up at the ship.

And the other one, perhaps even more important, showed that in the beginning of 1980 Mr. Hubbard was very much in touch with a great number of people in the organization because the photos showed that there were about 10 or 12 other people identified as with Mr. Hubbard. And this is right at the beginning of 1980, during a time when there was a number of damage claims coming forward.

It showed that he was very much with Scientology, something which could not be made public at that time. And that is one of the differences.

Additionally, the — the two sets of photos from the Douglases and Dincalcis probably have a great deal of significance to Scientologists more than the shots that I had.

And as far as keeping the troops in line, they have a great deal more significance.

The Dincalcis — Jim Dincalci’s photos show Mr. Hubbard with very long hair and looking quite wild in places, you know, probably disheveled and so on.

The other photo in 1980, there was one, Mr. Hubbard with a croupier’s visor on. And he was standing in front of a roulette wheel.

Within Scientology Mr. Hubbard has a policy called "The Gambler." And people who gamble are suppressives. And this would have had a devastating effect within Scientology circles, to see the man in this state,

2677

operating a roulette wheel.

So there are those kinds of differences, as I see it, between the photos. And it is because of their — possibly their PR impact or because they were legally compromising, rather, you know, that touched this whole thing off.

2678

It was a thing which I did not predict, their degree of paranoia about the man.

Q The photo –

MR. LITT: I take it all of this is coming in for - obviously none of these are facts.

THE COURT: Well, his observation of what is in the photographs is a fact, his statement about what the tenets of Scientology vis-a-vis gambling is a fact, his opinions on how it might affect is strictly an opinion.

MR. LITT: The thing about why these documents were taken –

THE COURT: Well that is his state of mind certainly.

MR. FLYNN: As I say, Your Honor, I think the photograph should be produced so the court could see the difference between the wedding album and these photographs that were never returned to Mr. Armstrong.

THE COURT: Well I think I sort of suggested that they ought to be produced. I could make an order. It seems to me that is an item which can be subject to being noticed to produce.

MR. HARRIS: Yes, Your Honor. I wanted to make very sure.

We, that is the Church, does not have or can’t find at least the photographs by my information.

THE COURT: All right.

Q BY MR. FLYNN: Now, the wedding album was sent to your parents; is that correct, Mr. Armstrong?

A Yes.

2679

Q And what type of policies existed with regard to sending pictures of Mr. Hubbard outside the ship when he was on the ship?

A Well I didn’t know of any such policy. I learned that there are within Scientology for publication only 10 approved photographs of Mr. Hubbard. It may now be 11 or they have recently brought out another couple from 1978, so maybe it is 12.

But in any case for publication there are only certain approved photographs.

Q Now, all the photographs that you had in your set were from the wedding; is that correct?

A That is correct.

Q And they pictured Mr. Hubbard in the formal setting of the wedding; is that correct?

A Yes.

Q And they were prepared by Mr. Hubbard’s own photographers?

A Well I am really not sure if they were or were not. Some of the photos in there were prints of photos taken by Mr. Hubbard, a couple at least. I don’t recall right now how many, but probably three or four.

Q Let me show you this photograph and ask you where that photograph comes from?

A This is a photograph taken from the same roll of film which Mr. Dincalci took during the time that he was in Queens, New York. All of this is according to Mr. Dincalci.

MR. FLYNN: Kay this be marked as next in order?

2680

THE COURT: Triple D, all right, DDD.

Q BY MR. FLYNN: Now, was that the type of photograph that was among the Dincalci and Douglas photographs?

A Well there was about two — all of the photographs were different. In the deal which I made with Virgil Wilhite, he requested that they all be different, so I went — Jim Dincalci had a great number of photographs, 15 of which he was going to sell, so a number were taken, all of which were different in many respects. All 15 concerned that period, but they were not all in that same room or Mr. Hubbard in the same pose or anything like that. A number of them were outside, but they were all from the same period. They were all black and white.

Q And the photograph that I have just shown you, is that one of the photographs that Mr. Dincalci had in addition to, I believe you said, 15 that he was trying to sell?

A Yes.

2681

Q What was the agreement that you had made with the Dincalcis and the Douglases with regard to the sale of the photographs and your responsibility to them?

A They were each to get §2,000 for their respective sets of 15 photographs. And I was not going to make anything on the deal other than to have the vehicle to sell my own photographs as part of this complete deal.

Virgil was to give me $6,000; I was to give each of those parties $2,000 and Virgil was to sake whatever over the $6,000 that he could. And that was the arrangement that I had with the Douglases and the Dincalcis.

At this point I owe them the $2,000.

Q After they were stolen did you inform then, that you felt indebted to them each for the $2,000?

A Yes.

Q And did you inform the people in this meeting at the Scientology headquarters that took place where you became very upset, that you were obligated to the Dincalcis and the Douglases?

A Yes.

THE COURT: Is there a claim in your cross-complaint dealing with this subject?

THE WITNESS: It is included in there, Your Honor. I’m sure it was written at the time.

Q BY MR. Flynn: Was it your state of mind at the time that you were indebted to each of them in the sum of $2,000?

A Yes.

2682

Q What is the similarity, if any, between the photographs of the Dincalcis and the Douglases that were not returned to you and other photographs that are under seal or in the archives in contrast to the photos in your wedding album?

Do you understand my question?

A Well, let me see if I can — there is a distinct difference which I know of. And that is that these photos are not the L. Ron Hubbard approved photos. These are not photos approved by L. Ron Hubbard.

The only photos which the organization can use are those which are approved by L. Ron Hubbard.

Q If one were to look at the two sets of photos of the Dincalcis and the Douglases and also the photos that are generally among the archives, the candid types of photographs, are there general similarities between those types of photographs as candid photographs?

A Yes; even in the archives, there are very few photos of Mr. Hubbard which are candid; candid photographs of Mr. Hubbard are pretty rare.

Q And that was a distinct difference between the photos in the wedding album and the photos of the Dincalcis and the Douglases; is that correct?

A Well, it is an aspect of it.

There is the setting for it; there is the fact that the photos were taken during a time, a particular time, of some significance, especially the photos taken at the beginning of 1980.

2683

Among the Douglases’ photos were some which were taken at another wedding. And this is from 1974 as well.

Q Did you believe when they told you when Mr. Marlowe told you that the photos were stolen, was it your state of mind at that time that they were accusing you of stealing photos from the archives?

A Well, that was my immediate reaction thereafter.

But at first when I confronted them, they just claimed that they were stolen; that they did not belong — each one of them, I had a write-up that was done by the respective people, Kima Douglas and Jim Dincalci which laid out exactly what was contained in those photographs and where they had come from and the fact that they were there — that they took them and that they were theirs.

It was obviously in my mind.

Marlowe claimed that they were stolen. It was a subsequent statement made by many people within the organization to me over the next two-plus years.

2684

Q That they had been stolen.

Now, when Terri Gamboa said, "Get yourself a lawyer" or "Go get a lawyer," in your mind, Mr. Armstrong, what did that mean?

A Well I figured at that point that the organization had proclaimed me an enemy. They were refusing to deal rationally at that point. I was an enemy and I could expect whatever they brought against me. It was simply issued as a threat.

Q Now, thereafter you contacted my office; is that correct?

A Within a couple of days.

Q Do you know whether 20-20 also attended the Clearwater hearings?

A I don’t know if they did or not.

Q Between the time you came to see me in Clearwater and the time I saw you in California, did we have conversations about the fact that 20-20 had become involved in the investigation into Scientology?

A Yes.

Q Now I’d like to focus at the end of May. Up until the time I came to California, had you sent me any documents in the mail?

A Up until the end of May?

Q Correct.

Up until the time I came to California.

A No.

MR. HARRIS: Just so I understand, Your Honor, is it

2685

the claim that Mr. Flynn is making that he came to May at the end of California? You could see how confused I am. Came to California at the end of May?

MR. FLYNN: Whenever it was.

THE WITNESS: No. It was some time after that.

Q BY MR. FLYNN: Now, when I cane out here, you understood that a second Declare had been issued on you; is that correct?

A Well I am pretty positive of talking to you about it at that time, and that is my recollection. I know that there is a discrepancy in the date and whether or not one thing occurred a day or so ahead of the other thing, and there is some doubt for that reason, but it has been my recollection all along that I spoke to you at that time about it. It was very significant in my mind.

Q Well, let’s focus in on this. At that point in time; namely, when I came to California, the end of May, early June, how many documents had I seen that are presently under seal?

A Up to the end of May or whenever that thing was?

Q Correct.

MR. LITT: Are we talking now about prior to this meeting?

MR. FLYNN: Up to the meeting and then we are going to get into the meeting, Mr. Litt.

THE WITNESS: I think you had seen the two that I have mentioned. One was the letter and one was the Nibs document, although I don’t even recall — see I took the document to

2686

show to Nibs, and I don’t know if you were there at the time I showed it to him and ran down the list of names, and I very possibly showed it to you, although I took it to show to him.

So in any case the most you could have seen up to that point was two.

THE COURT: Just a second.

Have we identified in any way by number or exhibit these two documents that you are referring to are series of documents, this letter and this business about Nibs, or is that part of this amorphous mass of sealed documents somewhere?

THE WITNESS: One of them has not been introduced, and that is the letter which is in an envelope still which I attempted to get to Mary Sue Hubbard.

The other one is included and it is on our list of the sealed documents.

MR. FLYNN: And I am going to get the exhibit number for the Nibs time track, Your Honor.

THE COURT: All right.

Q BY MR. FLYNN: Now, the letter from Mary Sue Hubbard is under seal and has not been identified as one of our exhibits; is that correct, and that is the letter that you returned to Mary Sue Hubbard prior to the restraining order being Issued; is that correct?

THE COURT: Well, he tried to return. I guess that was his testimony.

Q BY MR. FLYNN: Tried to return; is that correct?

A Yes.

2687

Q Now, the Nibs time track, as you called it, which is exhibit 500 4Q –

A Let me correct you. You may have the wrong document there if it is the Nibs time track.

I simply had a list — it was a one-page document, and I think attached to it was a letter which had been written by Mary Sue which Nibs, L. Ron Hubbard, Jr., recognized as being a letter which he received as if coning from his father. That is a different exhibit.

Q Is that in, to your knowledge, exhibit 500 4R on the letters to L. Ron Hubbard, Jr.?

A Yes, it probably is that.

2688

Q And was it your understanding that that letter had actually gone to L. Ron Hubbard, Jr.?

THE COURT: Let’s just stop a moment.

I have now 500-4R. So we know specifically what we’re talking about, does that appear to be what you had taken?

THE WITNESS: Not all of this, Your Honor. There was this top one and there was - there was this one.

THE COURT: What you took, let’s sub-mark that as A and B and whatnot, 500 — not A and B - 500-R1, 5Q0-R2.

THE WITNESS: 500-4R, call it -2.

THE COURT: What is 500-4-2?

THE WITNESS: Call this -2 and then -1 is the first one here.

Q BY MR. FLYNN: Now, those are the two letters that you showed me, 500-4R-1 and 500-4R-2; is that correct?

A Yes. I’m pretty when I had them there they were attached together.

Q Now, to your knowledge 500-4R-2 had already been in the public domain insofar as it had gone to L. Ron Hubbard, Jr.; is that correct?

A Yes.

Q And prior to my coming to California, are there any other documents that I saw, Mr. Armstrong, that you recall?

A No.

Q Now, when I came –

THE COURT: Pardon me again.

2689

This letter that everybody has been talking about, is there any evidentiary value to this letter, or do you want me to make an order that it can be returned to Mrs. Hubbard when she gets here?

MR. FLYNN: I was going to suggest that the Court read it to see why Mr. Armstrong sent it to me if it becomes an issue.

THE COURT: Does anybody have any objection to that?

MR. LITT: I think he has already stated it.

THE COURT: I don’t think there was any discussion about the contents of that letter. He said part of it was private and part of it was personal. And part of it had some bearing upon the motives for doing what he did.

MR. FLYNN: I tried to stay away from the contents. I tried to mention the public relations aspect of the letter which to Mr. Armstrong was extremely significant and to me as a lawyer having to look through these documents, I would say it’s of extreme significance also; however, it strictly relates to an event that occurred involving Mary Sue Hubbard which is somewhat personal.

I think the Court should look at it to see why in terms of Mr. Hubbard’s public relations, his image –

THE COURT: We can order it up here then, I guess, if we can identify it some fashion. At the recess I can look at it, for whatever it is worth, I guess.

Do you want to enter a stipulation that it can be returned forthwith to Mrs. Hubbard? We can do that when she is here.

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MR. FLYNN: Fine, Your Honor.

MR. LITT: Okay.

THE COURT: It is separate from everything else?

MR. FLYNN: It is, Your Honor. It is a letter of Mary Sue Hubbard that is in a sealed envelope among the documents under seal.

MR. LITT: I think it is –

THE COURT: Well, we’ll go ahead for a few minutes anyway and take a recess and see if we can figure it out.

Q BY MR. FLYNN: Mr. Armstrong, did you send me that letter because of public relations aspects of the letter with regard to Mr. Hubbard’s public relations image?

A That was the real significance that the letter had to me.

Q In placing his public relations image above everything?

A Yes.

Q Now, we come up to my coming out to California.

The Douglases and the Dincalcis attended several meetings at the Hotel Bonaventure; is that correct?

A I was there during one evening in which they were there. I have heard from them that they were there the second day during a time when I was not there.

Q And it was their photographs that had been taken; is that correct?

A Yes.

Q Now, when Gordon Friedman from 20-20 attended one part of one meeting were there ground rules laid down

2691

with regard to what Gordon Friedman could see in connection with any documents that you had at that time?

A Well, he was not to see any of the documents. He did not see any of the documents while I was there. That is all I can tell you at that time.

Q And do you recall any conversation about matters relating to Mr. Hubbard’s life that were already part of the public record that you could verify as the archivist?

MR. HARRIS: Any conversation with Mr. Flynn, or — there is no reference –

Q BY MR. FLYNN: During this meeting with Mr. Friedman.

A Well, a lot of what I had to say concerned Mr. Hubbard and matters that were of public record. That was the thing which had altered my existence greatly from a particular path.

It was what I had, first of all, been led to believe.

And secondly, what I had come to find out about the man. So there was a great deal of discussion from my viewpoint when I related my story and when I related the steps that I had gone through both mentally and physically in getting out of the organization and getting free of the man.

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Q Now, let’s assume that this May 31 notification to you from Mr. Peterson is the first time you learned of the Declare, just for purposes of this question. Assume that that is the first time.

MR. HARRIS: Well, it is unfortunately — it assumes two facts not in evidence. The communication from Mr. Peterson mentioned nothing about a Declare.

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

MR. HARRIS: And secondly, it was May 26 and May 27 as the dates.

MR. FLYNN: I will withdraw it.

Q Let’s assume that the communication from Marilyn Brewer, I believe it was, May 31, with regard to the Declare was the first time you learned of the second Declare. Just assume that for purposes of this question.

Prior to that point in time, Mr. Armstrong, at any meetings at the Bonaventure, assuming they came before the communication with Miss Brewer, what documents had you shown to me in the Bonaventure meeting?

A The documents that I recall that I showed to you at the Bonaventure meeting were the set of documents — I called Estimate in which you are leading the list of enemies.

Q Let’s stop right there and identify the exhibit number of the estimate; exhibit 500 6S.

Now are you generally familiar with that exhibit, Mr. Armstrong?

A To some degree, yes.

Q Is there anything in that exhibit — may I

2693

have 500 6S — while she is looking for that, Mr. Armstrong, is there anything in that exhibit to your memory that relates to Mary Sue Hubbard?

A Oh, boy. I suppose it all relates to Mary Sue Hubbard, but I don’t –

Q Well, does it relate in the general sense because she was the head of the Guardian’s office.

A Well, she had been, but that was prior to the origination of this thing.

Q Now, is it fair to say that that document in general relates to Michael Flynn, a medical doctor from Harvard named John Clark, and various members of the Rockefeller family?

A Yes, in addition to other people noted as enemies, but those are principal characters.

Q Now, is there a suggestion or can an inference be drawn, at least, from some of the material in exhibit 500 6S that the Church of Scientology had tapped a certain telephone in connection with information contained therein?

A There is a note of a conversation which could lead one to that conclusion. I don’t recall a specific reference to a phone tap.

Q There is a reference to the contents of a phone conversation, however?

A I recall something about that.

Q Now, to your knowledge is there anything in exhibit 500 6S that contains anything of a personal nature about Mary Sue Hubbard?

2694

A No.

Q Is there anything in 500 6S that contains information about L. Ron Hubbard?

A I don’t recall specifically if there is or not. There may be in the second portion of the book, the Reader’s Digest statements, but — there may be something about Mr. Hubbard in there. I mean, the whole organization is his, so by that connection, but I don’t know of a specific.

2695

Q You don’t recall anything of a personal nature about Mr. Hubbard; is that correct?

A I don’t believe so.

Q Now, do you recall in the summer of 1981 whether I received your permission to give that document to the Federal Bureau of Investigation?

A Do you mean '82?

Q The summer of 1982, to give that document to the Federal Bureau of investigation?

A Well –

Q If you recall, Mr. Armstrong.

A Now, I recall something about your statement about the FBI at that time. But I don’t — I would have.

Q And in your mind would that have been keeping it in the legal arena?

A Yes.

Q Now, let me show you what bears at the top "CIC X Mark Sheet."

May this be marked next in order. Your Honor?

THE COURT: All right. That will be triple E, like in Libya.

Q BY MR. FLYNN: Have you seen documents similar to exhibit triple E?

A Oh, yes.

Q Now, it starts at the top "CIC X Mark Sheet"; do you remember Mr. Harris asking you about the CIC?

MR. HARRIS: Aboard the ship?

MR. FLYNN: Aboard the ship.

2696

THE WITNESS: Yes.

Q BY MR. FLYNN: What does CIC in Scientology terminology stand for, Mr. Armstrong?

A Well, it means Combat Information Center.

Q What is a CIC cross-mark sheet of that type?

A This is a — it shows cross-references into various files. It shows your connections.

Q That is basically what could be termed an enemies list?

MR. HARRIS: I object to that as calling for a conclusion and leading.

THE WITNESS: Well –

THE COURT: Overruled. He might have some ideas, having been involved rather extensively.

THE WITNESS: It is definitely a list of enemies.

I see there is one person here in doubt. So that person, the GO is undecided on at that point.

The rest of them are intelligence files on particular individuals or legal department of the Attorney General, Massachusettes; [Massachusetts;]  that is a department, but it is — here it is listed as an enemy. It is an entity that the organization is gathering intelligence information on. This refers to files.

Q BY MR. FLYNN: Now, to your knowledge was Michael Flynn — strike that — do you recall Mr. Harris asking you a series of questions about the internal ethics policies of the Church of Scientology regarding designating members as enemies?

2697

A Yes. Right.

Q And you testified there were policies for people on the inside and policies for people on the outside; is that correct?

A Yes.

Q And to your knowledge was Michael Flynn ever a member of the Church of Scientology?

A Not to my knowledge.

Q Or the Department of the Attorney General of the State of Massachusetts?

A No.

Q Now, this designation "Subject: Flynn, Michael J., attorney. EUS."

What does "EUS" stand for?

A East U.S.

Q Then there are categories with –

A Up there, it might be just "Enemy U.S." You are not on here.

Q I am at the top; is that correct?

A Well, yes. These are files which cross-reference with you. You would be another file here or a bunch of files here.

The category E refers to is enemy. T means traitor. D means doubt.

Q Among the designations, T, that is what means traitor?

A Right. In the Guardian’s office there are only

2698

three designations, E, T, and D. Anyone who is in the organization is in doubt; in other words, they don’t know if he is going to become a traitor or whether or not he is a plant or — everyone is in doubt. It is — that is the way the Guardian’s office and the intelligence arm of Scientology perceives members.

2699

Q And what does T stand for?

A T would be a person who was a former staff member or former Scientologist who has turned, become what they call here a traitor.

Q And E stands for enemy?

A That is correct.

Q And in general, looking down the names, you recognize some names of former Scientologists who were designated T and some names of former Scientologists or non-former Scientologists who are designated E?

A Yes.

Q And the next page is an excerption sheet. What is an excerption sheet, Mr. Armstrong?

A An excerption sheet is a Guardian’s office method for summarizing information, either taken from a longer more detailed report or a series of reports, all of which would be attached to the excerption sheet and the excerption sheet would refer to page and paragraph number on a particular page, so where here it says 1-1, that means page 1 paragraph 1. Down here 4-3 is page 4 paragraph 3, and these are just small notes excerpted from a longer report or reports.

Q And would that be excerpted from, for example, the 30 linear feet of information about the subjects in 500 6S?

MR. HARRIS: Do you have a copy of that, Mr. Flynn?

MR. FLYNN: I don’t.

THE WITNESS: These excerptions would be excerpted from a longer report and the longer report was taken from the 30 linear feet.

2700

THE COURT: What was Juggernaut?

THE WITNESS: Your Honor, Mr. Flynn could probably explain Juggernaut much better than I can, but Juggernaut was an operation against Michael Flynn.

THE COURT: I just notice here it says, "1, evaluate this entire scene by Monday, October 12, 1981 with a complete handling workout and alignment with Juggernaut." Blank and then "T/CIC. Director of Information" apparently.

Is this something that you accumulated?

THE WITNESS: These materials?

THE COURT: Yes.

THE WITNESS: No, Your Honor. They were provided by Vaughn Young to Omar Garrison.

THE COURT: All right.

Q BY MR. FLYNN: Now, that covers exhibit 500 6S, Mr. Armstrong.

What other documents do you recall that are presently under seal were at the Bonaventure meeting?

A The documents which we have called the Admissions.

Q All right. Now, the admissions are dated in approximately 1946; is that correct?

A '46-’47.

Q And that was long before L. Ron Hubbard ever met Mary Sue Hubbard; is that correct?

A Yes.

Q And that was before the Church of Scientology was ever formed; is that correct?

A Yes.

2701

Q Do any part of the documents in the admissions involve personal matters of Mary Sue Hubbard or any matters relating to the Church of Scientology?

A No.

Q They solely relate to L. Ron Hubbard; is that correct?

A That is correct.

Q Now, and for the record, that is exhibit — those are exhibits 500 4D through 4G, I believe; is that correct, Mr. Armstrong?

A I think through 4I.

Q And is it your testimony that none of those materials relate to the Church of Scientology or Mary Sue Hubbard?

A Yes.

Q What other materials — incidentally, who in the Bonaventure meeting to your knowledge saw the admissions?

A Well, you saw them and I believe Kima saw them. Whether or not the other three people; Jim and Nancy and Mike Douglas saw there, I can’t be sure.

I recall them being in Kima’s hands or at least one of the binders in her hands.

Q Who is Kima Douglas?

A Kima Douglas is married to Mike Douglas. She was a head of the household unit for Mr. Hubbard up until the point she left in the beginning of 1980. She was with him in Hemet. She was with him in La Quinta. She was at ASTRA in Culver City with him, in Washington, DC with him, in Dunedin

2702

with him, and in Daytona Beach with him. She had been in the organization for many years.

2703

Q Was she one of the closest people to L. Ron Hubbard in the organization?

A Yes.

Q Was she a director of the Religious Research Foundation, if you know?

A I had heard it. And perhaps she even told me back in '73. But I don’t know for sure.

Q And had she couriered billions of dollars for L. Ron Hubbard during her years in the organization, if you know?

MR. HARRIS: If this is his state of mind, Your Honor.

THE COURT: I suppose it would be hearsay.

She can testify to that. I’ll sustain the objection.

Q BY MR. FLYNN: In any event, she was very close to L. Ron Hubbard?

A Yes.

Q And it was her photographs that were at issue that you have previously testified about?

A Yes.

Q Now, did any other people see exhibit 4D through 4G or 4I in the Bonaventure meeting?

A I don’t believe so.

Q Were there any other exhibits or documents that are under seal, Mr. Armstrong, that were present at any part of any Bonaventure meeting?

A I believe that — I think the Parsons’ materials were there and there could have been actually two binders,

2704

only one of which is under seal. And on — but I am pretty sure that Parsons’ Black Magic binder was included.

Q Did that binder predate the Church of Scientology and L. Ron Hubbard’s relationship to Mary Sue Hubbard?

A Well, there is a note in there from Mr. Hubbard and a press article which do not predate that, but the bulk of it predates such involvement.

Q Now, do you know who, if anyone, saw those materials other than you and I?

A I don’t know.

Q Any other materials, Mr. Armstrong?

A Those are the only ones that I can say with relative certainty were at that meeting. There may have been more, but if there were, they don’t stick out.

I recall that there was — I don’t know, about maybe yea much material. So there would have been about five or six of my binders, five of –

MR. HARRIS: "Yea much," Your Honor, the witness perhaps could give us in inches about what that is.

THE WITNESS: About four and a half to five.

There may have been another binder or two, but in any case, I don’t recall what they were.

Q BY MR. Flynn: Do you remember whether there were any Naval records that were there?

A There may have been. Again, my recollection is that everything that I had at that time was a binder.

Q In any event, the Naval record predated the Church of Scientology and Mary Sue Hubbard; is that correct?

2705

A Yes.

Q And do you know whether most of the information or the great bulk of the information in the Naval records had been set forth in the Clearwater report in September, 1980, months before our meeting in the Bonaventure?

MR. LITT: Objection. That calls for a conclusion and lack of foundation.

THE COURT: if he knows he can answer. If he doesn’t know –

MR. LITT: It also is vague.

What is "most of"?

Q BY MR. FLYNN: Was most of the information in the Naval records already part of the public records, to your knowledge, Mr. Armstrong?

MR. LITT: The same objection; the words "most of," it is not –

THE COURT: I suppose there is an element of ambiguity. "Most" I suppose is more than 50 percent.

Q BY MR. FLYNN: Mr. Armstrong, was there anything in the Naval records that you knew about that you felt was not in the public record in late May, early June, 1981 at our meeting in the Bonaventure?

2706

MR. HARRIS: Well, "In the public record" is ambiguous, too.

THE COURT: I suppose so.

MR. HARRIS: In some sense.

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

THE COURT: Let’s take a 15 minute recess. (Recess.)

(In camera proceedings held in chambers, reported but not transcribed herein.)

2707

(The following proceedings were held in open court:)

Q All right, we are back in session. 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: You may proceed.

MR. FLYNN: Your Honor, may this document which has been identified in the record as the envelope which bears a postal date stamp on it of August 16, '82 stapled to a letter that starts off "Dear Mary Sue" dated August 14, 1982 be marked as next in order.

THE COURT: All right, we are up to triple F.

MR. FLYNN: And I can mark on this original?

THE COURT: Yes.

Q BY MR. FLYNN: Mr. Armstrong, exhibit triple F, was that the letter in the envelope that you sent to Mary Sue Hubbard containing the letter in the early ’50’s that you have testified about?

A Yes.

Q And you indicated that the handwriting on the envelope you thought was David Miscavige’s; is that correct?

A Yes.

Q And again who is David Miscavige?

A David Miscavige is the — under Mr. Hubbard within Scientology is the person who controls all Scientology organizations.

2708

MR. FLYNN: Do you want me to give this to the clerk?

THE COURT: Yes, certainly.

MR. LITT: May I take a look at it?

Q BY MR. FLYNN: Now, Mr. Litt questioned you about several incidents involving the private investigators and he led you through reading a portion of some of your notes regarding the incident where you were struck on the elbow; do you recall that?

A Yes.

Q And he read line by line through the notes, but there was one line just prior to your being struck on the elbow that he omitted, Mr. Armstrong; is that correct?

MR. LITT: Objection. That misstates what happened. I didn’t read through anything line by line. I asked Mr. Armstrong a series of questions and he answered them.

THE COURT: I suppose maybe you paraphrased. I don’t know. I don’t have the exhibit.

Q BY MR. FLYNN: Do you recall Mr. Litt asking you a series of questions about the incident, Mr. Armstrong?

A Yes.

Q Now with regard to the car striking your elbow, do you recall Mr. Litt asking you a question relating to the fact that you were moving toward the car; do you recall that, questioning you about you moving toward the car?

A Well, I don’t recall in detail what he — exactly how he asked it. I think I was following along here and I meant moved toward the car for some time until I got up to it.

2709

Q And then what happened?

A Well, the car was going around a corner, turning a corner right.

So I approached to see — as it was going around, the guy was watching me. And I approached toward it, thinking that seeing me there he would stop. I was signaling; I wanted to talk to him. And it was while I was going this way and he was coming this way around the corner and then he swung toward me like that, clipping my elbow.

Q So he turned the car toward you?

A He swerved toward me.

Q And you noted that in your notes of August 31, 1982; is that correct?

A Yes.

MR. FLYNN: May that be marked as next in order, Your Honor, that series of notes?

MR. LITT: I think it is being used to refresh his recollection. It is not evidence.

THE COURT: We can mark it for identification. It doesn’t mean that it is coming into evidence. We are up to triple G.

Q BY MR. FLYNN: You were asked a series of questions by Mr. Litt relative to whether you believed what you told your parents about the book "Scientology A world Religion Emerges in the Space Age." Do you recall that series of questions?

A Not in detail, but I recall that there was a series, yes.

2710

Q And he asked you at the tine you gave this book to your parents whether you believed that it constituted an introduction to the Church of Scientology; do you recall that?

A Yes.

Q And when you gave that book to your parents and also to the government officials that you did, did you believe at the time, Mr. Armstrong, that it was an introduction to Scientology?

A Well, it was a standard Guardian’s office document which was given to people viewed as enemies or to handle the dead agenting of people who were creating problems.

It was not what I would consider an introduction to Scientology. That is for — it does not approximate the introductory books which I read regarding Scientology.

In retrospect, there are many aspects to this thing. I wish it had been available when I had gotten into Scientology because seeing this, I would not have gotten in.

Q Let me ask you this: in approximately when did you give that book to your parents or to the government officials about which you testified?

A About October, 1975.

Q And was it your understanding at the time that it was prepared by the Guardian’s office?

A Yes.

2711

Q What if any understanding did you have with regard to whether or not Scientology and Mr. Hubbard were using religion as a cover for what they were doing?

MR. HARRIS: This is his state of mind, I take it you mean for understanding?

THE COURT: Yes.

Q BY MR. FLYNN: State of mind, Mr. Armstrong.

A I knew that it was used as a cover.

Q When you joined the Church of Scientology, did anyone associated with the organization represent to you that it was a religion in any form?

A No. In fact, what I joined — if I joined, it was not called the Church of Scientology. It was called Scientology Mission or Scientology Little Mountain. It was called a franchise.

I was involved in Scientology, but there was never a mention throughout that period of the Church of Scientology.

Q If you had understood it was a religion you were joining, would you have joined?

A No.

Q Was it represented to you as a science?

A Yes.

Q And was this the basis on which you joined?

A Yes.

Q Have you ever heard of a policy called the "Minister’s Mockup"?

A Yes.

2712

Q What is the Minister’s Mockup?

A  A mockup is — means a couple of things in Scientology, but to do with a minister. It refers to having a minister appear to be a minister. That is having the — wearing a dog collar, dressing a particular way, wearing a cross, and that’s it.

There was a religious mockup which was given to organizations. There was a checklist which was done which showed that there was a chapel set aside, that there was a cross somewhere, and these were things which was the responsibility of the Guardian’s office to make sure happened.

Q So when you answered — when you tried to answer to Mr. Litt’s question where you said in part it was an introduction to Scientology, did you mean that it was an introduction in the sense that religion was used as a cover for what was being done?

MR. LITT: Objection; leading.

THE COURT: Sustained.

Q BY MR. FLYNN: What was your understanding, Mr. Armstrong, with regard to whether this book was part of using religion as a cover for what was being done in the organization that you were involved in?

A Well, I was briefed prior to my going to see my parents by the Controller Assistant, Jimmy Mulligan, who was then, under Mary Sue, the head of the intelligence network internationally.

I knew that this book was a dead agent tool, and that was what I was to use it for. I also knew by virtue of

2713

the fact of being on the ship in which there was virtually no religious activity of any kind that it was a cover. Never at any time, in fact it was specifically stated that faith and beliefs have no part in Scientology. Scientology does not operate on faith. It is scientifically demonstrable. The results are exact. It is the science of sciences. It is the science of knowing how to know and the science of sciences, and that is how I came in. I knew the rest to be a cover.

Q There is a portion of this book that deals with what is called in the book "The Scientology Confessional"; is that correct?

A Yes.

Q And with regard to the confidentiality of disclosures in the confessional; is that correct?

A Yes.

Q And directing your attention to page 82 of the book under the confessional it states therein:

"The Scientology confessional enables the individual to confess to overts without duress. Is bound by the Auditor’s Code which stresses the confidentiality of any utterances in auditing." Do you see that?

A Yes.

Q Now, was it your understanding when you first became involved in the auditing process that everything you told your auditor was confidential?

A Yes.

Q And those representations were made to you?

2714

A Yes.

Q At that tine did you know about Guardian Program Order 121669?

A No.

Q Which I believe has been marked as defendant’s exhibit triple A.

THE COURT: 500 triple A?

MR. FLYNN: No, this is not one under seal, Your Honor.

Q Now, when you were in the intelligence bureau, Mr. Armstrong, did you learn that the Guardian’s office culled auditing files?

A Yes.

Q And when you were in the RPP, you were aware that auditing files were being culled; is that correct?

A Yes.

Q Incidentally, when you were in the RPF, Mr. Hubbard showed you — Mr. Harris showed you a number of exhibits relating to the RPF in contrast to the collection of exhibits which were introduced. First the collection of exhibits which the defense introduced, where did they come from on the security checking process?

A I believe for the most part they are copies of policies taken from the organization executive course, the Green volumes.

2715

Q How many volumes are there in that course?

A There are volume zero through seven. And there’s an index to it which is a separate volume. And there may be other volumes which are included as green volumes, a management series. And there may be more. And I don’t know if that is considered part of that set of volumes called the OEC course.

Q In any event, they are published in a set of volumes published by the organization; is that correct?

A Yes.

Q And we simply collected the ones regarding the security checking and Xeroxed them from those volumes; is that correct?

A Yes.

MR. HARRIS: "We" did that. Your Honor, Mr. Flynn and Mr. Armstrong collectively did that?

THE COURT: I suppose you have a right to cross-examine on it, counsel, in due course.

Q BY MR. FLYNN: When you gave this book to your parents –

Incidentally, what is the core practice of Scientology, Mr. Armstrong, in terms of the scientific validation of improving one’s ability in life? What is the core practice?

A I am not sure what you mean by "core."

Q Is auditing one of the most essential fundamentals of the organization?

A Yes.

2716

Q And the representations regarding the confidentiality of auditing, is that one of the most essential representations that are made to people?

A I think it is the most representation made in Scientology by Mr. Hubbard.

Q For example, your auditing files, can you give the Court an idea how extensive they would be?

A Put together, they form a stack approximately three and a half to four feet high.

Q And do they contain virtually every idea or thought that you had prior to the auditing session in your prior life?

A They would — I had a lot of thoughts. So it is hard to say that they are all there. But most of –

Q Significant.

A Those of significance, actions of significance from everything from my earliest recollection in childhood through the time I left the organization.

Q And everything virtually that you knew about your parents, your brothers, your sisters, your aunts, your uncles; is that correct?

A If it was significant, it was in there.

Q Now, some materials have been introduced, success stories; what are success stories?

A After anyone takes a — a step in Scientology, is audited, is Sec Checked, does a course, one has to, as part of the process in doing that, write a success story.

Q Is that a requirement?

2717

A Yes. And be checked on the meter after writing the success story. And it is an essential step.

Q And what happens if you don’t write the success story?

A Well, take the RPF success story that Mr. Harris read from yesterday, if I had not written such a success story, I would still be in the RPF.

Q Now, where did that success story cone from in terns of what file it came out of?

A My belief is that that success story came from my PC folders.

Q Have you requested all of your PC folders back in this case?

A Yes.

2718

Q Have you received them?

A No.

Q And these PC folders contain all the information that you collected about your life on the promise that it was all confidential; is that correct?

A That is correct.

Q Now, Guardian Program Order 121669 involves the culling of PC files; is that correct?

A That is part of it, yes.

Q What is a "hat" in Scientology?

A A hat is the post which one does, the description of the post, and it is a compilation of policies and materials relating to that post, the duties, the responsibilities.

Q Now, the Guardian’s office is an intelligence or information bureau; is that correct?

A Yes.

Q And at some point in time the name changed from intelligence to information; are you aware of that fact?

A Yes.

Q And are you aware of approximately when that was?

A It would have been in the early ’70’s.

Q Now the information bureau of the Guardian’s office had a hat pack for the duties and responsibilities of members of that bureau; is that correct?

A Yes.

Q And basically a hat pack is a training manual?

A Well it could be called that. Within the hat

2719

pack may be training manuals.

The hat pack consists of a checksheet which lists out all the materials in the hat, the hat being the compilation of materials which may contain manuals. The thing itself could be called a manual for a particular post, yes.

Q Now, this hat pack called "information full hat pack United States Guardian’s Office confidential pack, 1 of 3?, may that be marked as next in order?

THE COURT: All right, triple G. H, I am sorry, triple H.

Q BY MB. FLYNN: Contains checksheets for policies and practices for Guardian office agents be drilled on; is that correct?

A Yes.

MR. LITT: Objection. Can we see whether this witness had familiarity with this while he was in the Church of Scientology and can authenticate it?

THE COURT: Do you recognize the document, sir, and its contents?

THE WITNESS: I have seen this or very similar, I believe it is this one, while in the intelligence bureau on board the ship.

Q BY MR. FLYNN: Now, there are numerous checksheets in here that have to do with, among other things, TR-L, black propaganda, dead agenting, burglarizing, and items of that nature, Mr. Armstrong. But turning to the last page and item No. 38 of page 20, there is a notation, "Guardian order 121669,

2720

MSH, 16 December, '69, program Intel Internal Security."

Is that exhibit what has been marked exhibit triple A in this case?

THE COURT: Here it is.

THE WITNESS: Yes.

Q BY MR. FLYNN: And it says, "Clay demo 9 operating targets of above program."

How many operating targets are there on exhibit triple A, Mr. Armstrong?

A Nine.

Q And again what does Clay demo mean?

A A Clay demo is a learning process In which one takes a bunch of modeling clay, plasticine, and forms it into figures or solid objects or in some way demonstrates concepts in clay so that it is completely understood what the significance and what the meaning of a particular program target or concept is.

Q So that it is fully understood?

A Yes.

Q Now, the initials "MSH" on page 20 number 38 of exhibit triple B, to your knowledge what do those initials stand for?

A Mary Sue Hubbard.

Q Now that document dated December 16, 1969; namely, the Guardian program order is dated prior to the copyright on this book which you used as a dead agent pack; is that correct?

A Yes.

2721

Q And at the time that this book was being given to your parents and government officials, the process of culling auditing files was going on; is that correct?

A That is correct.

Q Do you know what a button survey is, Mr. Armstrong?

A I know broadly what a button survey is. There are two forms of button surveys. One is a broad public survey in which particular buttons are located. For example, the PR survey which you saw earlier to do with the biography in which honesty was 66 percent. Well, honesty is a button. It is something which you weave into the PR story. It is something that you — that in order to excite interest, because that is what people are interested in, you promote, you promote that about L. Ron Hubbard in this case.

2722

Additionally, there is a Guardian’s office concept having to do with the locating of buttons on people. And buttons are things which can be pushed which will give a particular response. And they have to do with what is important to a person, what has particular significance to him or her.

One person may have — attach a lot of significance to their parents, in which case a tie with the parents is something that can be manipulated or used as a button.

Someone may have a button on the subject of money, in which case they can be attached along money lines or using money concepts.

Q Now, when PC files are culled, to your knowledge, when you are culling the PC file of someone that you’re going to use the file against, do you look for buttons?

A What do you mean by 'file against"?

Q When you are culling files –

A Oh, okay.

Q — do you look for buttons about the person?

A I don’t recall specifically looking for buttons, I looked for crimes and connections, but I don’t ever recall specifically looking for that sort of thing.

I understood the concept.

Q Was that at a higher level of operations within the organization, taking the crimes and then finding the appropriate buttons, to your knowledge?

MR. HARRIS: Higher level with the organization, or

2723

within the RPF where he originally did this?

THE COURT: I’ll sustain the objection.

Q BY MR. FLYNN: At another level inside the Guardian’s office, Mr. Armstrong, if you know.

A Yes. I was during a majority of the culling that I did in the RPF being instructed by the Guardian’s office in the culling at that time.

Q Incidentally, let’s focus in a little bit on the types of Sec Checking that went on in 1976 and 1977.
In the Clearwater RPF did you remember a project called the "List 1 Rock Slam Project"?

A Yes.

Q What was the "List 1 Rock Slam Project"?

A List 1 is a list of Scientology-Dianetics concepts, terns, and people and posts.

My recollection is the only two people named by name were L. Ron Hubbard and Mary Sue Hubbard.

There are additional posts or activities; for instance, auditor or case supervisor. In any case, this is called a "List 1."

A "Rock Slam" is a particular needle phenomenon on the E-meter. It is a wild slashing motion back and forth.

At the end of 1976, the beginning of 1977, Mr. Hubbard issued a number of orders regarding locating people who had this particular needle phenomenon. And those people were immediately assigned to the RPF without recourse, without any way out except through the RPF.

2724

I was at that time in charge of the RPF inside the RPF and had to have each one of the people within the RPF Sec Checked regarding List-1. And a number of Sec Check questions were originated on each one of the List-1 subjects, that is, auditing, Mary Sue Hubbard, L. Ron Hubbard, E-meter, courses.

Q And in connection to the FBI, for example?

A I don’t believe –

MR. HARRIS: Objection. Leading.

THE COURT: He was about to show that it wasn’t leading. He said, "I don’t believe."

Let’s go forward.

THE WITNESS: No. Although something like that could possibly come up in the context of the Sec Checking.

But the purpose at that point was to find anyone who under Sec Checking manifested that particular needle reaction. If they did, if the needle made a particular reaction, it meant that they were a suppressive person and therefore they were locked up. It meant that they had a RS. And all the policies on Rock Slams or RS’s  indicated that the person was insane on that subject, was suppressive.

At that time within the RPF when someone showed up with this needle phenomenon or was assigned for that needle phenomenon, they were segregated from the rest of the group.

List-1 RS personnel could only audit other List-1 RS personnel. And the reasoning behind that, as

2725

stated by Mr. Hubbard, was so that these List-1 suppressives would not interrelate with the rest of the more or less normal group of RPF inmates.

Q Did you know at that time that Mr. and Mrs. Hubbard were under Investigation in 1976 and 1977 by the Department of Justice?

2726

THE COURT: Well, did he know or did he believe?

Q BY MR. FLYNN: Did you know that at the time?

A No. I learned in 1977 of the raid, but 1976, in mid-’76 I had left Mr. and Mrs. Hubbard in Culver City. This would have been some time in, I guess, in June '76, and I knew that Mr. Hubbard was at that point hiding out and I knew that there was a great deal of concern about his being served, and that that was the cause of the flight from Clearwater, Florida, but I did not hear, I believe in that time, anything about the Justice Department.

Q Let me show you this document, Mr. Armstrong –

MR. LITT: What document?

MR. FLYNN: It starts off, "Operations, definitions, button survey."

MR. LITT: Could we have a copy?

MR. HARRIS: Could we have a copy of the last exhibit as well?

MR. LITT: After the fuss that has been made about providing Mr. Flynn exhibits, we don’t even have access to the last several exhibits that have been received.

THE COURT: Have you shown him what you are going to be using. Counsel?

MR. FLYNN: Your Honor, I didn’t –

THE COURT: Discovery is a two-way street. I assume what is sauce for the goose is sauce for the gander.

MR. FLYNN: Your Honor is quite correct and these documents are in the possession of Mr. Litt and Mr. Harris and have been for years, and I did not expect that Mr. Harris

2727

would terminate his examination as quickly as he did. That is why copies of these documents have not yet been made.

Mr. Litt and Mr. Harris are Intimately familiar with these documents.

MR. HARRIS: Your Honor, he is crazy.

MR. LITT: I have never seen these documents before.

MR. HARRIS: This man is crazy. This is totally absurd.

MR. FLYNN: Mr. Harris, you were the attorney in the IRS claim.

MR. HARRIS: Yes, I was, Mr. Flynn. What of it?

MR. FLYNN: That happens to be an exhibit.

MR. HARRIS: In the IRS case?

MR. FLYNN: In the IRS case.

MR. HARRIS: Where is it in the IRS –

THE COURT: Gentlemen, knock it off.

You look at that exhibit and we will proceed. I don’t want any of this back fighting back and forth. No more comments like that, gentlemen, or you may be subject to other problems.

MR. HARRIS: I apologize to the court.

MR. FLYNN: I do, also.

THE COURT: All right. The record will reflect that Mr. Harris has returned the exhibit to Mr. Flynn.

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

THE COURT: All right, triple I.

Q BY MR. FLYNN: Now, Mr. Armstrong, are you familiar with the procedures in triple I with regard to

2728

drilling on operations against enemies with button surveys?

MR. LITT: Your Honor, again I would ask that we first see whether this witness can authenticate or identify this exhibit before he be asked questions about its contents.

THE COURT: You want to ask him a question on voir dire, you may ask him. As far as I know, he is looking at an exhibit that presumably has some relevance. If you want to ask a question on voir dire, ask permission to Inquire on voir dire.

MR. LITT: May I inquire?

THE COURT: Yes, you may.

VOIR DIRE EXAMINATION BY MR. LITT:

Q Mr. Armstrong, the document that is before you which is exhibit triple I, prior to December 1981 had you ever seen that document?

A No.

MR. LITT: Your Honor, I don’t believe under the circumstances it is appropriate for him to be asked questions concerning that while he had no familiarity while he was in the church.

MR. FLYNN: Your Honor, the question was whether he is familiar with the procedures that are outlined in there as being consistent with what he understood were the drills that were used against enemies.

THE COURT: Well it is irrelevant. If he has personal knowledge of certain drills, he can testify to that.

Whether it is consistent with that is really

2729

kind of irrelevant.

MR. FLYNN: Well, this is part of the full hat, Your Honor.

THE COURT: I don’t know whose full hat we are talking about.

MR. FLYNN: The last exhibit with regard to procedures for finding a person’s button from auditing files.

THE COURT: Well, this witness apparently can’t make that identification. Maybe somebody else can if it is relevant.

REDIRECT EXAMINATION (Resumed) BY MR. FLYNN:

Q Are you familiar, in general, with those types of procedures, Mr. Armstrong?

A Yes.

MR. LITT: Your Honor, same objection.

MR. FLYNN: I will have it marked for identification, Your Honor, at this time.

THE COURT: Yes, it is already marked triple I.

Q BY MR. FLYNN: Now, Mr. Armstrong, since leaving the Church of Scientology, have you generally had access or seen thousands of documents that were seized by the Federal Bureau of Investigation about Guardian’s office operations; just yes or no?

A I have seen a great number. I have not seen thousands.

Q And leaving that question aside for the moment, are you familiar with the policy of the Church of Scientology

2730

called "Governing Policy"?

MR. LITT: May we have the document, please?

THE COURT: Before you get into that, we have had a lot of testimony about the Guardian. What is your understanding of the role of the Guardian’s office in Scientology? Has it changed? Did it change over the years? Was it always the same or what?

THE WITNESS: Your Honor, on board the ship originally we did not have a Guardian’s office, so from 1971 through 1975, other than Mary Sue Hubbard’s existence on board as Controller, and she played very little part in the day-to-day management on board. I knew of the existence of the Guardian’s office through her. Up in Canada there was no Guardian’s office at that time.

In 1974 there were some Guardian’s office personnel who came on board. 1975 or late '74 or early '75 there was a man by the name of Brian Rubinek who was the Assistant Guardian for intelligence on board ship, and I became quite familiar with Guardian’s operations through him.

The Guardian’s office contained within it one bureau which was intelligence, one bureau which was public relations, one bureau which was finance, another bureau which was a services bureau which serviced the other operation bureaus, and they developed at least another one later called social coordination.

2731

I became familiar with the fact that in outer organizations, at least, not on board because we had on board Mr. Hubbard, but in outer organizations, they virtually controlled Scientology in that they controlled finance and had the intelligence bureau which was a — it was like an enforcement arm or — a military arm of Scientology.

And I became quite familiar with Guardian’s office personnel and operations up until the point I left the organization.

My understanding is that they are no longer a Guardian’s office and that they have renamed the people who do the same function and now call them by another name, something like Special Activities Bureau. But the function remains the same.

I have another understanding that because of the problems that were run into with internal intelligence functions, specifically Michael Meiser, who was an intelligence operative who led, through his defection, to the FBI raid.

The organization has subsequently turned over most of those functions to outside private investigators.

So the people that I encountered physically were private investigators; whereas, years ago they would have been GO operatives. To what degree they are still operating an intelligence format, I don’t know.

Q BY MR. FLYNN: Mr. Armstrong, when did Hubbard resign, supposedly, from the organization?

A 1966.

2732

Q When did the Guardian’s office begin?

A Around 1966.

Q And Mary Sue Hubbard as Controller of the Guardian’s office had total authority over it; is that correct?

A Yes.

Q And in your understanding throughout the years you were involved in the organization the Guardian’s office had control of all of Scientology finances throughout the world?

A Under Mr. Hubbard, yes.

Q Now, this policy, governing policy –

MR. HARRIS: I happen to be familiar with that. Your Honor. And that is part of a HCO PL which is misleading. That one, I am familiar with. That did come up.

THE COURT: The exhibit the witness has now?

MR. HARRIS: That is right.

THE COURT: That can be developed, I suppose.

Q BY MR. FLYNN: Are you familiar with that policy, Mr. Armstrong?

A I have seen it, yes.

Q What is it?

A This is the governing policy regarding finance written by Mr. Hubbard.

I don’t recall what the rest of the policy — what the title is, but I think it could easily be located in the — among Scientology policies. I have seen it before.

2733

Q Now, it says "Governing policy of finances.

"A. Make money."

And then it has other items in it, "J. Make money."

And then "K. Make money."

L is "Make other people produce so as to make money."

Now, when you were in the Church of Scientology, what, in your understanding, was the most fundamental goal of the organization?

A I guess what held most of us together was a concept of a cleared planet.

There were the major steps on getting there and a major one, definitely, in which I was involved was the — to obtain control, control of locations in which we were or to gain — for example, in Clearwater, the obtaining of control so as to be in a position of control in the Clearwater area.

Q Was there a general cliche used for Scientologists controls?

A Yes.

Q and in your experience was one of the most basic policies of the church to get money?

A Well, money was something which occupied our attention a great deal, making money, almost on a daily basis. There was something in the orders of the day from Mr. Hubbard regarding money, money that organizations were making, flag income. And thereafter, it was continually

2734

the thing. It was a continual — the briefings concerned with money. GI, gross income.

Q Now, you were basically on a level that was fairly close to Mr. Hubbard and you were not operating out in the field, so to speak, in the organization and in Scientology franchises with regard to raising money; is that correct?

A Right.

MR. LITT: Objection. Leading.

THE COURT: Overruled.

Q BY MR. FLYNN: So your daily experiences did not involve the experience of many people who were out in the periphery of the organization with regard to the drive toward making money?

MR. HARRIS: I’ll stipulate to that, that he wasn’t there, Your Honor.

I’ll object to the question as assuming facts not in evidence.

THE COURT: I’ll sustain the objection to the form of the question.

Q BY MR. FLYNN: When you gave that book to your parents, did you lie to your parents?

A Yes.

Q And in what way did you lie to your parents?

A I lied to my parents about where I was, what I was doing.

Q And in your experience on board the ship — strike that.

2735

Was there a policy on board the ship of not informing your parents as to where you were?

A Yes.

Q And was that a requirement of just about everyone on board?

A Well, there was the published — I assume everyone on board except maybe Mr. Hubbard who could have changed it. But all correspondence going off the ship was — it was submitted to the master at arms. All correspondence was read before it went to our families or anyone off the ship.

Q So throughout the years you were on the ship did your parents know where you were?

A No.

Q And at some point in time did they believe you had been killed?

A Yes.

Q And did that involve your sending this book to them?

A Yes.

Q And explain what happened at that point, Mr. Armstrong.

A Well, my parents received a postcard and a couple of anonymous telephone calls and informing them that — first of all, one of them said that I was shanghaied; another one said that I was dead. They didn’t know.

So they approached, first, the police, the RCMP; then got in touch with a member of Parliament and an attorney in Vancouver who was involved at that point in Scientology.

2736

And I don’t know to what degree or how he was involved, but he apparently was knowledgeable. So they contacted him.

I heard of it. The Guardian’s office received news of it and informed me on board.

And then a few days after that I received news from the Guardian’s office. I received a letter from my mother to which I responded, but it was at that time I was ordered by the GO to go home and to handle my parents regarding the problem.

2737

I believe that the phone calls and the postcard came from a man by the name of Roger Bennett. The person who had introduced Scientology to me, Roger, has spent the last nine years, at least up until last year when I last spoke to him, in an insane asylum up in — near Vancouver, and he is insane per him on the subject of Scientology.

My belief from the handwriting that — I had a copy of the postcard at one time and from the handwriting, I believe that it was Roger although I have no proof of that, and really I don’t recall at this time Roger’s handwriting.

Q Is there a letter under seal from Mr. Hubbard to the Department of Defense regarding people going insane under Scientology processing?

A There has been — there is something like that. I think it is a denial of such a thing, but I know that those claims have been made. I have seen a couple of insane people regarding — while in Scientology. We are talking about very insane, not just the rest of us crazies.

Q Now, Mr. Armstrong, there was person killed on board the ship in 1971 shortly after you arrived; is that correct?

A Yes.

Q And her name was what?

A Susan Meister.

Q And she was shot to death?

THE COURT: Are we talking about this witness’ personal knowledge or what he heard or what?

Q BY MR. FLYNN: Was she killed while you were

2738

on board?

A Yes.

Q It was a gunshot wound in the forehead; is that correct?

A That is what I was told at the time.

Q On board the ship?

A Yes.

Q And do you know whether her father was trying to get on board the ship to see L. Ron Hubbard to find out what happened to his daughter?

MR. LITT: Your Honor, this clearly calls for speculation.

THE COURT: I think it is pretty remote from where we are supposedly going here, so I will sustain the objection. It is all very interesting, but we have more important things to probably decide than what is interesting, so let’s go forward.

Q BY MR. FLYNN: Well, there was some question of Mr. Harris to you, Mr. Armstrong, about whether or not the ship was required to leave port with women and children before it was seaworthy; do you recall that?

A Yes, I recall the question. I don’t recall there ever being such an incident.

Q Was the ship ever seaworthy?

THE COURT: In what fashion?

Q BY MR. FLYNN: Well, as a passenger vessel?

A Well, it did not meet SOLAS requirements.

Q And with regard to people on board the ship, there were people — there was a crew that were being paid

2739

wages; is that correct?

A Yes.

Q And there were people that came on board who paid money to take courses on board; is that correct?

A Yes.

Q And they were made to sign the ship’s articles as crew, but they were paying customers; is that correct?

A Right.

Q And was there a public relations problem with regard to various countries because of things such as the Susan Meister incident?

A The Susan Meister incident did create a problem. There were other problems which we ran into. That was the only death on board while I was there which caused a problem.

Q Was there a practice of throwing people overboard?

A Yes.

Q And was that a punishment practice?

A Yes; not at sea but while docked.

Q Now, Mr. Litt asked you several questions with regard to exhibit 7 page 2 which is the letter of PUBS DK to the board of directors of the church, Your Honor.

Now in that letter page 2 paragraph 2, that paragraph relates to your authority to provide Mr. Garrison with complete access to your archives and records on LRH Including FOI documents, private papers, letters, photographs, logs, legal papers and the like; is that correct, Mr. Armstrong?

A That is what it says, yes.

Q Now the legal papers that you provided, were

2740

those the papers such as the letters to and from Attorney Brinkman?

A They would be included in legal papers.

Q And the letters involving Mr. Baudine and the security project picking up Mr. Baudine?

A Well I wouldn’t have classed that as a legal paper, but maybe private paper, maybe both. It would have been included in there.

Q And those were voluntarily given to you?

A Yes.

Q And this is the document that was approved by the Board of Directors of the Church of Scientology of California is that correct, pursuant to that resolution which has been marked as a separate exhibit?

A Apparently.

Q Did anyone ever restrict you from getting legal papers to Mr. Garrison?

A No.

2741

Q Mr. Litt showed you an original of a letter that was originally marked — all right — a dispatch that was originally marked as exhibit J which you testified was sent to Mary Sue Hubbard as Controller; do you recall that?

A Yes.

Q And your original testimony was that that exhibit J was sent dated 15 October, 1980; do you recall that?

A Yes.

Q And then Mr. Litt showed you a document which is dated, I believe, October 30th or October 31st, 1980  which is essentially the same as that document with some changes; do you recall that?

A Yes.

Q Now, first, explain to the court what your practice was with regard to correcting errors or modifying documents that your seniors ordered you to modify to send up lines?

A Well, if the changes were minimal, then I would simply either paste-up or white-out and make the corrections and then Xerox the document to make a presentable readable letter for dispatch.

This is missing something.

Q Did you have a secretary, Mr. Armstrong?

A No.

Q Did you have a correcting typewriter?

A No.

Q So your practice was if there were major changes.

2742

then you would cut and paste and Xerox; is that correct?

A Yes.

Q And if there were not major changes, then you would simply use the correcting type paper?

A Well, yes, or just white it out generally.

Q Now, how many times would you estimate between 1980 and 1981 did you cut and paste documents and then Xerox then and send the Xeroxed copy out to people and left the original in the file that was cut and pasted?

A A great number of times. I would say that the bulk of my requests for money regarding the biography project were done that way.

The policy which I followed was every month when I requested these funds, I prepared a description of what I was doing, much of which was the same. So I would simply cut and paste those paragraphs rather than having to retype a document of this kind of length.

So very often — I’m not the best typist in the world — I retained the poor looking originals and sent out a nice looking Xerographic copy.

Q That was your practice?

A Yes.

Q And you left all of those originals in the files in the organization when you left?

A Yes.

Q So that all of those files with all of those cut and pasted originals showing that practice would all be in the possession of the organization; is that correct?

2743

A Well, they would have a big chunk of such documents.

Q Now, Laurel Sullivan’s post was what, Mr. Armstrong?

A She held, in a sense, two positions during the time when I was on the biography project. We would say double-hatted. She was the LRH senior personal public relations officer and she was also in charge of the MCCS Mission.

Q Now, you testified that you sent this, what has been marked as exhibit J, to Laurel Sullivan; is that correct?

A Yes.

Q And then she returned it requesting you to make changes; is that correct?

A Yes.

Q Now, today, sitting on the witness stand, do you recall what happened now with regard to your sending that to her and her returning it to you?

A Yes, basically.

Q Was there ongoing conversation or discussion between you and Laurel Sullivan about keeping Mary Sue Hubbard advised of what was happening in the biography project?

A Yes.

Q And was there an ongoing discussion between you and Laurel Sullivan about the fact that you were poor in public relations?

2744

A Poor in public relations?

Q Poor in public relations.

A That I was poor?

Q Correct.

A Well, I don’t know if she ever articulated it like that, but she definitely thought that I was probably a little too straightforward.

She gave me shots a couple of times, verbal shots for implying that Mr. Hubbard may be lying about things.

2745

I think that she figured that I did lack the diplomacy that she as a PR had. That was discussed.

Q Did she return exhibit J for you to redo?

A Yes.

Q And you redid it with what has been marked as plaintiff’s exhibit 26?

A Yes, including this.

Q Including what is a document that says "Central Office of LRH ED to November 1980?; is that correct?

A Right.

Q And did you send exhibit 26 to Mary Sue Hubbard?

A Yes.

Q And did you get a response?

A I believe I got a response. I do not recall exactly what it was, but I got a response. I knew that it was received and I just cannot tell you exactly what she said.

Q Did you have a discussion with Laurel Sullivan about the response?

A Laurel and I discussed the subject, the subject of archives and the establishment of the archives trust a great number of times, and again I can’t tell you exactly what the nature of the response was that Laurel got, but I knew that Laurel was in touch with Mary Sue on practically a daily basis by dispatch and on quite a regular basis by telephone throughout this period, and it was because of that, at least, that I knew that they were both discussing the subject.

Q Would you look at exhibit J and exhibit 26 and

2746

state on the record and to the court what the difference between the first paragraph of exhibit J is and the first paragraph of exhibit 26?

A Well –

MR. LITT: Objection. The documents speak for themselves.

THE COURT: Well, I will sustain the objection.

Q BY MR. FLYNN: Mr. Armstrong, what was your understanding as to the change that you put in in the first paragraph with regard to diplomacy and PR value on the two documents?

A Well, that was exactly it. It was kind of a nicer introduction to give Mary Sue this nice acknowledgement about her being the most knowledgeable on the subject of archives and the senior archives terminal.

Q And you had not said that on exhibit J? is that correct?

A Right.

Q And also the other change relates to changing the attachment to exhibit J which was a list of the types of documents you were collecting in the archives project to what has been called a COLED; is that correct?

A Yes.

Q And why was that change made, Mr. Armstrong?

A Well, Laurel requested that rather than adjust me a listing of what 1 call her documents to do with archives but specifically relating to the formation of the archives trust. Laurel wanted the documents formed into a central office of LRH ED so that it could be approved and issued. Otherwise

2747

I would have to resubmit the document one more time in order to have an issue published on the subject.

I also broadened up the earlier document and assigned targets to various people, various groups.

Q And one of the targets was, "6. Exchange the technical materials now in our personal files for the non-technical materials in C archives"; is that correct?

A Yes.

Q And that is what you and Tom Vorm were doing?

A Yes.

Q Now, Mr. Armstrong, on page 3 of exhibit 26 which has been described as the COLED, is there a stamp "approved for the Board of Directors for the Church of Scientology of California"?

A No.

2748

Q Why is that?

A Well, it didn’t go to the board of directors. It probably would have been added in at the end of the Mimeographed issue for public relations or legal reasons. But it wasn’t necessary in any of these documents.

Q Did anything you ever did, to your knowledge, get approved by an actual board of directors of any corporate organization?

THE COURT: If you know.

Q BY MR. FLYNN: If you know?

A No.

MR. LITT: Is the "no" that he doesn’t know of any, or is the "no," no, it didn’t happen?

THE COURT: Not to his knowledge, apparently.

Q BY MR. FLYNN: Basically, Mr. Armstrong, the way the situation worked with the biography project, did anything require official approval of any board of directors to your knowledge?

A No.

Q Now –

THE COURT: We’ll take a recess at this time until 1:30.

If you want to take Mrs. Hubbard out of order here this afternoon at 1:30 to accommodate her, it is all right with me.

MR. FLYNN: I don’t think I have too much longer. I think Mary Sue Hubbard is going to be very short, possibly as short as 15 minutes.

2749

MR. LITT: Well, I would just as soon do it out of order, Your Honor. Mrs. Hubbard would prefer that.

THE COURT: Why don’t we put her on out of order? Then you can go ahead and finish with her.

MR. LITT: May we have the clerk release to our custody the documents that were marked that we have not really had a chance to review for the lunch break so we can look at then? There were about three or four.

THE COURT: Are they sealed documents?

MR. LITT: No; the ones that Mr. Flynn just presented. He didn’t have copies for us.

MR. HARRIS: And may he be ordered to give us all the rest he is going to use so we don’t have to waste the court’s time?

THE COURT: Give them copies of whatever you are going to use.

Do you have any particular objection to them being released to plaintiff’s counsel, Mr. Flynn?

MR. FLYNN: As long as Mr. Litt will represent that they’ll be returned in tact.

THE COURT: You can identify which exhibits. By stipulation they can be released to plaintiff’s counsel and be returned at 1:30.

(At 11:55 a.m., a recess was taken until 1:30 p.m. of the same day.)

2750

LOS ANGELES, CALIFORNIA; TUESDAY, MAY 22, 1984; 1:30 P.M.

-oOo-

THE COURT: All right. We are back in session. Counsel and parties are present.

Mrs. Hubbard, you may retake the stand, Mrs. Hubbard is being called under 776, I gather, of the Evidence Code.

MARY SUE HUBBARD, called as a witness in behalf of the defense, under section 776 of the Evidence Code, was sworn and testified as follows:

THE COURT: Just have a seat. State your name again for the record. You are still under oath.

THE WITNESS: Mary Sue Hubbard.

MR. HARRIS: Your Honor, just if I could, I have now had a chance to look at what Mr. Flynn marked as exhibit triple I.

I will represent to the court that this document I hadn’t seen before and it did not come into evidence in the IRS case, and I just want, if there is to be any remarks to me from Mr. Flynn, that they be directed to Your Honor in the future.

THE COURT: Well, there is no reason to get exercised over the problem. Just continue with the case and try to resolve it.

MR. FLYNN: May I have those exhibits, Mr. Harris?

2751

DIRECT EXAMINATION BY MR. FLYNN:

Q Mrs. Hubbard, In 1980 and 1981 were you close with Laural Sullivan?

A I had communications with her, yes.

2752

Q How frequently?

A I would say up to a point in '81, more frequent. And then the beginning of '80, very infrequent; the summer of '80, a little bit more frequent.

In other words, it was not consistent.

Q And the fall of '80?

A I would say not too terribly frequent at that time. The most frequent communication was in '81.

Q How often did you receive written dispatches from her in '80 and '81?

A I would receive a written report weekly.

Q When did you last see Laurel Sullivan?

A I don’t know. It must have been some time in '76 that I recall seeing her.

Q In '76?

A Yes.

Q And did you give her permission to stay at your apartment in 1981?

A I think I said that if she was going to be coming to Los Angeles, she could stop with me, yes.

Q Did you receive any dispatches from Laurel Sullivan relating to the biography project?

A Mainly in conjunction with the contract for the biography.

Q Other than the contract for the biography did you receive any dispatches from Laurel Sullivan on any other aspect of the biography project?

A There might have been something about the

2753

archives as such, what was going to happen to then after the biography was done.

Q What was the nature of that communication?

A Setting up an archives trust.

Q Who was going to set the trust up?

MR. LITT: Objection. I am going to object at this point, Your Honor.

This, again "it was going to" is part of advice — this essentially runs into the MCCS Mission. "It was going to" was — this was advice being — advice was being sought from attorneys on a range of things including how to handle these archives matters and all of the discussions had to do with matters relating to the relationship between the church and Mr. Hubbard, tax matters, and a variety of things which was all being gathered, provided to attorneys, advice being sought from attorneys, recommendations being made. They were being evaluated, et cetera.

I don’t think it is proper to elicit what was going to happen. If something did happen, fine. But as to, "what was going to happen," that cannot be separated out from the process of seeking advice from attorneys about how to handle a variety of matters, including this trust.

2754

THE COURT: Well, do you want to read the last question back?

(Record read.)

THE COURT: Are we talking about the archives trust? Was that your preceding question?

MR. FLYNN: Correct, Your Honor.

THE COURT: If you know, you can answer. If you don’t know, you can so state.

THE WITNESS: I don’t know. I never authorized a trust be set up.

Q BY MR. FLYNN: What documents were going to go into the trust?

THE COURT: If you know.

THE WITNESS: I really don’t.

Q BY MR. FLYNN: Whose documents were going to go into the trust?

A Well, as the trust wasn’t set up, no one ever explained to me what documents were going into the trust, so I don’t know.

Q Isn’t it a fact that your husband’s documents, L. Ron Hubbard’s documents, were going to go into the trust and he was going to take a $50 million tax deduction?

A I don’t know that.

MR. LITT: Your Honor, Mr. Flynn has just talked to Laurel Sullivan, gotten information from her that is privileged, and asked a question about it and I am going to object again, and that specific question –

THE COURT: Well it was unanswered, so I will strike

2755

it. She doesn’t know.

I am not considering anything that is asked in the question as evidence unless there is an answer affirming it.

Q BY MR. FLYNN: Do you know who currently owns your husband’s documents that were collected by Mr. Armstrong?

A I think I do except for what the court has.

Q And do you know who currently possesses the documents that were collected by Mr. Armstrong?

A According to the letter I have from the church is that the church has secured them in possession for myself and my husband.

Q And what church is that, Mrs. Hubbard?

A Over at Cedars, in the Cedars Complex.

Q Who supervises those documents if you know?

A I don’t know.

Q Have you heard of a corporation called Author’s Services Incorporated?

A What?

Q Have you heard of a corporation called Author’s Services Incorporated?

A Author’s, yes.

C And isn’t it a fact that that corporation manages your husband’s affairs?

A I believe they do.

Q And there is a Mr. Lyman Spurlock that is connected to that corporation; is that correct?

A At one time I knew that he was, yes.

2756

Q And isn’t it a fact that Author’s Services Incorporated is supervising the documents that were collected as part of the archives project?

A I don’t know that.

Q So you are saying that you own the documents, but you have no knowledge as to who is supervising them or the manner in which they are being supervised; is that your testimony?

A My testimony –

MR. LITT: Objection; asked and answered. Her testimony is what her testimony is.

THE COURT: I will sustain the objection to the form. It is argumentative.

Q BY MR. FLYNN: Are you familiar with exhibit double Z, Mrs. Hubbard, "What Your Fees Buy"?

A No, I am not. I have never seen this little thing before.

Q Have you ever seen anything like that before.

A No.

Q Have you ever seen any representations in any form of writing published by your husband or the Church of Scientology about whether or not your husband, L. Ron Hubbard, received moneys from the church between 1966 and 1981?

A Anything — you are asking –

MR. LITT: I am going to object to the question as vague. The term 'moneys from the church" is vague. If there is a specific document, then the document should be shown.

THE COURT: Well, overruled. It is cross-examination.

2757

THE WITNESS: What is your question again, Mr. Flynn?

Q BY MR. FLYNN: Well, let’s see if I can focus it in a little bit, Mrs. Hubbard.

A Right.

Q You see, if I can point it out to you, you see in the paragraph that begins

"Personally I have tried to do my part in this. None of the researches of Dianetics and Scientology were ever actually paid for out of organizational fees. With my typewriter I paid for the research myself. Occasionally Orgs were supposed to, but they never did. Independent of research costs, the $13 1/2 million that Orgs … " –

THE WITNESS: Where are you reading?

Q BY MR. FLYNN: Right here.

"Independent of research costs, the $13 1/2 million that Orgs owed me for services rendered, 10 percent (the usual author royalties) lectures, loans, things paid out of my own pocket, I never collected."

A Yes.

Q And there is also a reference in there that your husband received less pay than staff members?

A Yes.

Q Now did you ever see any representations published by any Churches of Scientology or your husband to the effect of those words that are set forth in there; namely, that your husband received less pay than staff members and

2758

he never received any fees from Scientology Organizations, and that he forgave debts of $13 1/2 million?

A I saw something like that, I think, in '66 or '65.

2759

Q Did you ever see anything since then?

A No.

Q Well, let me ask you this; are those statements true to your knowledge?

MR. LITT: Objection. True — it is compound.

MR. FLYNN: We’ll take them one at a time.

MR. LITT: It is compound, one.

And are we talking about time frames?

MR. FLYNN: I’ll reframe it.

THE COURT: Let counsel reframe his question.

Q BY MR. FLYNN: Between 1966 and 1981, Mrs. Hubbard –

A I don’t think you can take that large a time frame.

Q Let me ask the question and see if you can respond.

Between 1966 and 1981 at any time did your husband receive more pay than staff members?

MR. LITT: Your Honor, before we proceed with this, I’m going to instruct Mrs. Hubbard that any knowledge that she has as a result of holding the position of Controller and information connected in connection with the MCCS Mission is to be excluded from her answer.

Is that acceptable to the court?

THE COURT: I think it is a little overly broad.

How long was she Controller of the organization?

MR. LITT: I’m speaking only of what she learned from the MCCS Mission for the periods 1980 and 1981.

2760

THE COURT: Preliminarily you can exclude anything that you acquired from this MCCS operation.

MR. LITT: And also, of course, anything as a result of confidential communication between spouses should be excluded.

THE COURT: I’ll deny that.

MR. LITT: I am confused.

Is the Court saying that Mrs. Hubbard is to answer this question including confidential knowledge provided to her by her husband?

I don’t know if there is any such thing. I am trying to get –

THE COURT: We are not asking her to tell us any confidential communications.

What is the question, Mr. Reporter? Read me the question, please.

(The pending question was read.)

THE WITNESS: I would say that up until a certain time in about, I think, the early ’70’s, that this was true, yes.

Q By MR. FLYNN: It was true up until the early '70?a and it was not true afterwards?

A Yes.

Q And you don’t know anything about that document; so you don’t know whether that was disseminated, for example, in 1976 and 1977 and 1978?

A I said I thought. The information that I heard

2761

about this came out in '65 or '66. But I never saw this little - read this little thing.

Q Now, for the period in the early ’70’s where it was not true, is it your testimony that your husband did receive more pay than staff members?

A Yes. He was — he did.

Q And –

MR. LITT: Objection, Your Honor.

Mrs. Hubbard’s testimony was that up until the early ’70’s this was true.

Then Mr. Flynn asked a question which, I think, is misleading which is in the early ’70’s, is it your testimony that he received more money than that.

Her testimony was up until the early ’70’s he did not.

THE COURT: I think the question was framed up until the time that it wasn’t true –

Go ahead and rephrase the question. You have got me confused.

Q BY MR. FLYNN: In other words, Mrs. Hubbard, in the early ’70’s your husband began to receive more pay than staff members?

A I think so, yes.

Q And how much more?

A I don’t know.

Q Was it in the millions of dollars?

A No.

Q Was it in the hundreds of millions of dollars?

2762

A No.

Q Was it less than a million dollars?

A I really don’t know, but I know it was not in the millions and it wasn’t in the hundreds of thousands of dollars.

Q Can you give me your best approximation of approximately how much it was?

A He began receiving a consultancy fee from the church. And I don’t recall exactly how much that consultancy fee was.

Q And prior to that he had not received a consultancy fee; is that true?

A That is true.

Q At any time after 1966 did he receive 10 percent of organizational gross income?

A No, he did not.

Q He never did?

A No. That money eventually was used to form the Sea Organization; was used aboard the Sea Organization. And then that money eventually was turned over — any money left from that corporation, which is OTC — like we had a series of corporations — that money was put into a trust and a certain sum of money was returned, as far as I know, to the church.

2763

Q Were any sums put into Swiss bank accounts after 1966 in your husband’s name that came from organizational money?

A He was holding the post of trustee for Church moneys, yes.

Q In his own name?

A In the name — in his name, yes.

Q And that was after 1966?

A Yes.

Q And that was prior to the early 1970’s?

A Yes. All that money went, as I say, for the Sea Organization, for the founding, for the buying of the ships, for the maintaining and paying of food, clothing, shelter, oil, port expenses, everything like that and so on.

Q And who owned the ships?

A The ships were owned by OTC and eventually OTC — it had — whenever the OTC dissolved, any moneys left in OTC were to go to a trust fund, and any moneys that were still retained by OTC on behalf of the church went back to the church.

Q And you know that for a fact?

A I know that for a fact.

Q They all went back to the church?

A That is correct.

Q Which church did they go back to?

A They went back, the money that belonged to the Church of Scientology of California, other moneys was put into a trust.

Q And how do you know all this?

2764

A Because that was the way it was arranged at the time. I was part of the arrangements to see that this was effected.

Q You were, as the Controller of the organization, involved in getting all of this accomplished?

A Partially, yes, to a certain extent.

Q Now, so your testimony is prior to the early ’70’s he received nothing from the organization; is that correct?

A No, I didn’t say that.

Q He received less than a staff member?

A Something like that.

Q How much was a staff member receiving in, for example, 1969 if you know?

A I am sure I don’t know.

Q If I suggest to you it was on the range of $4 a week in the Sea Organization, does that refresh your memory at all?

A There wasn’t any Sea Organization in that early period.

Q In 1969 there was no Sea Organization?

A I thought you were talking about 1966.

Q Let’s take the year 1969, three years after your husband’s resignation.

A Yes.

Q In that period of time was there a Sea Organization?

A There was.

Q And were people in the Sea Organization staff

2765

members?

A Yes, they were.

Q And do you remember approximately how much they were receiving?

A Depended. In the early days it varied.

Q Now did these staff members work for OTC if they were on board the Apollo?

A At that time they worked for OTC, yes.

Q And that was a profit-making corporation?

A To the extent that — no profits were ever to be disbursed to anyone else, but all profits of the corporation were to go to a non-profit corporation, so I don’t know whether that makes it what.

Q But you do know about that?

A I know about that.

Q And this profit corporation, OTC, do you know whether the people on board the Apollo were working for OTC?

A They were working for OTC, yes.

Q And let’s take the year 1969, does it refresh your recollection if 1 suggest to you that the Sea Org members or employees of OTC or whatever they were were earning $4 a week approximately at that time?

A They never were earning $4 a week.

Q Do you have an approximation as to how much they were earning during that period of time?

A As far as I know, it was something like 4 pounds a week, which was maybe about $12 something.

Q Eight to twelve dollars, somewhere in that range?

2766

A Yes.

Q And is it your testimony that your husband was making lass than say $12 par week during that year from the organization?

A I don’t know what he was making that year.

Q And do you know whether he had a bank account in Switzerland during that year?

A Yes, he did.

Q And do you know how much was in it?

A As I again say, Your Honor, that was the trustee moneys which were the church moneys.

Q Held in his own name?

A Yes.

Q And this was three years after he resigned?

A Yes.

2767

THE COURT: Why did he use Switzerland as a place for the account?

THE WITNESS: Because they were American monies. And at that time they didn’t want the bank — if you banked them in England, you had to get special permission to have an external account in order to keep an amount of dollars. And at sea we would have to use these monies. And at that time the best way to get monies exchanged in different ports was with the dollar. So –

Q BY MR. FLYNN: Now, do you recall in late 1969 or early 1970 when your husband withdraw $10 million from a Swiss bank account and brought it on board in cash on board the Apollo?

A Yes.

Q Whose funds were those?

A Those were the trustee funds.

Q And he ordered that those be brought on board the Apollo?

A Well, those weren’t exactly the circumstances.

The circumstances were that the Swiss bank asked that we close out our account. We brought the monies aboard at that time.

Q Is it your testimony that after the early 1970’s he only received a $35,000 consultancy fee per year from any organizational income?

A I am saying that that is what he received, his consultancy fee, yes.

Q And your testimony is that he didn’t receive

2768

anything more than that?

A I’m saying that is what he received.

You are getting me confused. I don’t know what you’re talking about.

Q Is it your testimony that other than the $35,000 consultancy fee about which you have testified, that he received no funds from the organization above that amount?

A For what years, Mr. Flynn?

Q After the early 1970’s.

MR. LITT: Your Honor, the question is overbroad and overly general.

Mrs. Hubbard has testified about what Mr. Hubbard got as a consultant or as a staff member.

Is the question limited to whether he got no other such fees in that capacity, or –

THE COURT: I am not sure. I think there is some indication that at different times there were corporations that were receiving funds. And I don’t know whether she is making a distinction between Mr. Hubbard or a corporation that may have been receiving funds.

HEC, didn’t they receive funds from time to time?

THE WITNESS: Yes.

THE COURT: Where did those funds go?

THE WITNESS: Those funds went over to OTS and to OTC. And all the property that was HEC’s went to OTC, the corporation.

And the ships were sold off and those monies

2769

became part of the monies that eventually wound up in, as I say, a part of it being given back to the church that was owed to the church and the other money being held in a church trust account.

THE COURT: Try another question, Mr. Flynn.

Q BY MR. FLYNN: In your last response did you say monies that were owed to the church, Mrs. Hubbard?

A Monies that OTC still had in its possession which was the church’s monies.

Q Now, did members of the OTC sign undated letters of resignation, the board of directors?

A I have no information on that.

Q Do you know whether there are such resignations under seal here?

A I have heard that there were.

Q And do you know that your husband owned 98 out of the 100 shares of OTC?

A Originally, yes.

Q Now, were you a signatory on some of these Swiss bank accounts?

A I can’t really recall. I never signed a check on a Swiss bank account for the church that I recall.

Q Do you know whether there were checks, Xeroxed copies of checks under seal from Swiss bank accounts made out payable to you?

A No, I don’t know that.

Q One, for example, in the amount of approximately $19,000?

2770

A No. I haven’t seen it.

Q Now, your testimony is you don’t recall whether you were a signatory on any Swiss bank accounts?

A Yes.

Q You don’t recall?

A I don’t recall it, no. And I don’t recall signing any checks.

MR. LITT: Your Honor, Mr. Flynn should not ask the same question 20 times.

It has been asked and answered, Your Honor.

THE COURT: All right. Sustained.

Q BY MR. Flynn: Let’s take a corporation called "Religious Research Foundation"; were you involved at all in the incorporation of that corporation?

A In the incorporation of it, I don’t recall.

Q And have you ever heard of that corporation?

A Yes.

Q And do you know where it was incorporated?

A Abroad. But what specific country, I don’t recall.

Q If I suggest Liberia, does that refresh your memory at all?

A Could be.

Q And do you know when it was incorporated?

A In the early ’70’s. Not exactly. I don’t recall the specific incorporation date.

MR. LITT: Your Honor, at this point I am going to ask that any questioning on this subject be deferred until the

2771

whole issue of what has happened with respect to the violation of attorney-client privilege on the topic of RRF and the proper methods of acknowledging it be dealt with by the court.

Mr. Flynn has had access to attorney-client privileged information in the tape. He has had extensive conversations with Laurel Sullivan in which we were unable to determine whether he has been passed privileged information.

He is asking questions which are clearly the fruits of that activity. We don’t believe it is proper.

2772

We understood that the court was going to deal with this at the time of the testimony of Laurel Sullivan which is perfectly acceptable, but it seems to me that until that happens, inquires which it appears are the result of extensive discussions in which representatives, former representatives of the church have passed privileged information to Mr. Flynn which now form the basis of his inquiry is improper and we would ask, therefore, that any inquiry into this area be deferred until the time that we have made a final resolution of that subject.

THE COURT: I don’t know. Did this corporation come out of that MCCS?

MR. LITT: Yes, it does. Your Honor.

MR. FLYNN: No, it doesn’t.

MR. LITT: Let me finish, please, Mr. Flynn.

Your Honor, Mr. Armstrong has filed numerous affidavits quoting a portion of it, at least what purports to be a transcript of the tape under seal in which there’s specific reference to that. It was quoted in the Clearwater Sun the other day, quoting that same thing, and that quote makes reference to RRF. It makes reference to a fund transfer.

THE COURT: Well, it just means that if I were to decide that they have a right to go into it, your client would have to come back at a later date.

MR. LITT: If that is how we have to handle it, that is how we have to handle it. But I can’t have the privilege be abrogated because of that inconvenience.

2773

MR. FLYNN: I will provide the court a copy of the affidavit of Mr. Armstrong that Mr. Litt has alluded to.

MR. HARRIS: Can we have one, Counsel?

MR. FLYNN: Yes, I have a copy for you, Mr. Harris, and, Your Honor, what I would point out is that MCCS began in 1980. RRF began in 1972-1973. As I have previously informed the court, the purpose of MCCS was  to change history, to undo, to conceal what RRF had done.

This witness is familiar with the fact that a chain of corporations that went from HEC to OTS to OTC to RRF was the conduit through which hundreds of billions of church funds were tunneled and ended up in RRF bank accounts and then went into L. Ron Hubbard’s bank accounts. But this took place prior to 1960.

THE COURT: Well if she has personal knowledge of what money went where prior to that time, I don’t see any reason why it can’t be testified to.

MR. LITT: Because it is improper to permit Mr. Flynn to make inquiry into it when the questions are formed as a result of an invasion, and I would suggest a knowing invasion of the attorney-client privilege. One cannot go and solicit a former representative of one’s opponent, take privileged information and then come into court and say, "Well, I am not asking this witness to testify to privileged information. I am just posing questions as a result of my violation of the privilege.

2774

That is what I am raising in this context, and I had understood that we were going to fully resolve this issue at the appropriate time and all of the limitations that should be placed would be dealt with at the appropriate time after we have had a full chance to have argument on the subject before the court, and I don’t think that it should be dealt with by allowing Mr. Flynn to have done what has occurred here without the court ruling after full argument and consideration of the matter to, in effect, undermine that privilege by the very form of questions that he is propounding.

MR. FLYNN: If Your Honor please -

MR. LITT: And in terms of any knowledge that he may or may not have about what Mrs. Hubbard may or may not know about RRF. We think there should be a determination of what the source of that was and whether or not it comes from an invasion of the attorney-client privilege, and all I am suggesting at this point is that this subject matter be deferred. Mrs. Hubbard will return. If that is the way it has to play itself out, that is fine.

When Miss Sullivan testifies and we have a full opportunity to discuss this, we are preparing a further brief which we plan to have ready by tomorrow to submit to the court on the topic, and I just think it is the way to proceed at this point and there is certainly enough in light of what we already know to raise questions about how this should be handled, and I don’t think that the question should go to Mrs. Hubbard until we have on

2775

had an opportunity to resolve those.

MR. FLYNN: If Your Honor, please I only want to get Mrs. Hubbard — I don’t intend to spend a lot of time on this. If we followed Mr. Litt’s suggestion, we can be here for months. I only want to get Mrs. Hubbard committed to a few answers and I will even do it in the form of direct examination with regard to prior to 1980, her knowledge of what funds went into RRF.

THE COURT: Well I will permit that question. If she had personal knowledge and she can testify to it, fine. If she doesn’t, she can so state.

MR. FLYNN: All right.

Q Mrs. Hubbard, were you a director of RRF?

A I don’t recall.

Q Do you know a woman named Kima Douglas?

A Yes.

Q Do you know whether Kima Douglas was a director of RRF?

A I believe she might have been.

Q Do you know whether the directors of RRF were required to sign undated letters of resignation from 1972 to 1980?

A I don’t know.

Q Were you a signatory on any RRF bank accounts?

A I don’t know. All I know is I never signed any checks on them.

2776

Q What, if any, knowledge do you have about church funds going into RRF accounts?

THE COURT: At what point in time?

Q BY MR. FLYNN: Between 1972 and 1980.

A Well, that depends upon which church funds you’re talking about. You know, you sort of grouped, clumped everything together into something called church funds.

Q What funds do you know about?

A I believe, to the best of my recollection, I think that certain foreign church funds — these are separately incorporated churches in foreign countries — I believe certain sums went from them into the RRF account sometime in maybe '73.

Q And those were foreign Scientologists who were coming to the United States and receiving services at Flag?

A Some of them, yes.

MR. LITT: Objection.

What point in time?

MR. FLYNN: At any time prior to the 1980.

THE WITNESS: Yes.

Q BY MR. FLYNN: And Flag was owned by the Church of Scientology of California?

A Yes.

Q And RRF paid Flag for the services it had collected for those people?

A Yes.

Q But those checks were not made out to the Church of Scientology of California; they were made out to a

2777

Liberian corporation?

MR. LITT: Objection. Assumes facts not in evidence.

MR. HARRIS: Mrs. Hubbard testified she doesn’t know whether it was a Liberian corporation or not.

THE COURT: If you know, you can answer.

THE WITNESS: I think, as I say, this is sort of like general knowledge, Your Honor, because I never invoiced the things. I never banked the money and that sort of thing.

Foreign collections were made for people who wanted services on Flag by people who were living in those countries abroad. And such monies were, as far as I know, banked into RRF. And when those people then came to Flag eventually for their services, wherever Flag was, whether it was on the ship or whether it was ashore, those monies were paid by RRF to the appropriate church that performed the services.

Q BY MR. FLYNN: And where did you get all of that understanding?

A That was the way it was established to begin with, Mr. Flynn.

Q Were you involved with setting that up?

A To a certain extent, yes.

Q Who else was involved in setting that up?

A I don’t recall. At the tine it was based on various attorney recommendations.

Q Let me show you a Xeroxed copy of a check in exhibit 500-5X under seal, "Pay Mary Sue Hubbard OTC account $19,788 from the Church of Scientology of New York."

2776

A That is quite different from Mary Sue Hubbard, isn’t it?

Mary Sue Hubbard OTC account, yes.

Q Now, Mrs. Hubbard, that is a check drawn on a Swiss bank account; is that correct?

A Yes.

Q And it is under the account of the Church of Scientology of New York?

A Yes.

Q So if I understand that correctly, that is a Church of Scientology of New York Swiss bank account making a check payable to you to the OTC account; is that correct?

A That is right.

Q And the OTC account is the profit-making corporation that you testified about?

MR. LITT: Objection. Assumes facts not in evidence. That was not her testimony. That misstates the testimony.

THE COURT: I’ll sustained the objection. Argumentative.

Q BY MR. FLYNN: Were you a signatory on the OTC account?

A For a short time in Spain when we were having — when we had our service organization in Alicante. These monies for students and various and sundry clients who came for church services, these monies were paid. It was paid into an account called OTC account which was an account in a bank in Alicante. And these monies were banked there and in Valencia.

2779

Q Now –

A And I signed on that account in Valencia.

Q What, if any knowledge do you have, Mrs. Hubbard, of funds going from Religious Research Foundation accounts to L. Ron Hubbard personal accounts in Liechtenstein prior to 1980?

A I don’t have any information on that.

Q Now, is your testimony that after 1970 or after the early 1970’s your husband did not receive 10 percent of any organizational gross income?

A I think my testimony is that to my knowledge my husband did not receive even in the ’60’s 10 percent of the income of any organization.

2780

Q And just so we are clear on this: Is it your testimony that after the early 1970’s other than the $35,000 consultantcy [consultancy] fee, your husband did not receive any funds from any Churches of Scientology other than that amount?

A Up until when? What time period are we talking about?

Q From the early 1970’s to approximately 1980.

A To 1980 –

MR. LITT: This is a question as to what she is aware of, Your Honor.

THE COURT: Obviously. What you have knowledge of.

THE WITNESS: Well, I know that he received royalties for books and, you know, from publications organization, DK, standard royalties on that and other than that, I really didn’t have that much knowledge or information.

Q BY MR. FLYNN: Now with regard to the 10 percents, is it your testimony that these 10 percents were paid to him and then he returned them to church organizations?

A My testimony is that they were always used as church funds and were received as part of church funds and were utilized as part of church funds at all times.

Q And at any time after 1966 were they ever in any of your husband’s bank accounts?

A As trustee for the church, they were in various

2781

bank accounts that were administered by my husband, yes.

Q In his personal bank accounts?

A Yes. They were all accounted for and turned into IRS and, you know, we had an IRS case on all this and I don’t know why we are going into it on this.

Q And were you aware of a release that was being prepared, at least for the benefit of your name and your husband’s name, in December 1981 that all staff members of the Church of Scientology were requested to sign which has been marked as exhibit double K in which the following was stated:

"I recognize and understand that neither Ron nor Mary Sue Hubbard receive any compensation or remuneration from training or processing by the church, that neither Ron or Mary Sue are officers of directors of the Church, and that neither of them are in any way responsible for actions of the church."

MR. HARRIS: There must be a reference to the specific exhibit because the church mentioned is a corporation the name of which is at the beginning of it.

THE COURT: Well that is a part of the document, yes.

Q BY MR. FLYNN: Now, Mrs. Hubbard, were you aware that that ws being sent to all organizational employees for signature?

MR. LITT: That assumes a fact not in evidence.

THE COURT: Sustained.

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Q BY MR. FLYNN: Were you aware that people such as Mr. Armstrong were being asked to sign that?

A No, I was not.

Q In December 1981 what was your post within the organization?

A December '81 I was not on post at that time.

Q And you were not on post; is that correct?

A That is correct.

Q And did you have any affiliation with the organization in December 1981?

MR. HARRIS: That is ambiguous, your Honor.

THE COURT: Well I will sustain the objection. You can reframe your question.

Q BY MR. FLYNN: Did you participate in any way in the arrangement of the organization?

A In December 1981?

Q Correct.

A No.

Q Did your husband?

A No, not to my knowledge or information.

Q After 1966 did your husband participate in any manner in the management of the organization?

MR. LITT: Objection. In context, the question calls for a conclusion. There should be specifics.

If Mr. Flynn wants to know what Mr. Hubbard did, the question of participation in the management is a conclusion.

2783

THE COURT: Oh, it is not all that difficult. Counsel. It is a very simple concept. Overruled.

THE WITNESS: That depended. At different times my husband did different things, so like I can say like for instance in '75 he was very interested in doing various photography and was doing photography pictures for books, and he wasn’t on the quote management lines, end quote at that time at all.

2784

A There was a period when he was teaching us aboard the ship how to do evaluations. And he wrote a whole series of policy letters called "The Daily [Data] Evaluation Series" and teaching us how to do evaluations of how organizations were doing. And so at that time he was assisting us to help us to learn how to manage corporations.

At other times he was busy filming; at other times he would be off doing research and so on. In other words, he was not consistently like I was, you know, tied to a desk and tied to a specific job, you know, this is what my functions were.

Q Did he issue dispatches through the Commodore’s Messengers organization after 1966 and prior to December, 1981?

A I don’t think there was a Commodore’s Messengers Org until sometime aboard the ship in the ’70’s.

Q At that time did he issue dispatches through the Commodore’s Messengers Org?

A They weren’t like dispatches. On the ship, it was like — it would like tell the engine room, tell a messenger to tell the engine room to turn up the heat. It is getting hot, or something like that.

Q Let’s take prior to February and March of 1980 before your husband went into seclusion; prior to that time did he issue orders to any organizations through the Commodore’s Messengers Org?

A There would be specifically some things like, you know, they would — either they would write-up or they

2785

would deliver verbally.

Q Was that part of the organizational hierarchy of the Church of Scientology between 1978 and 1980?

MR. HARRIS: Objection, Your Honor.

Is he talking about the ecclesiastical hierarchy?

The Church of Scientology seems to me to be ecclesiastical as opposed to a corporation.

THE COURT: It seems to me to be a rather amorphous organization.

MR. HARRIS: It is amorphous, like the Roman Catholic Church is amorphous. But there are entities, like the Arch Bishop of Los Angeles, Your Honor, just like there is the Church of Scientology of California which is the legal entity.

MR. FLYNN: Your Honor, I want to know whether or not Mrs. Hubbard is aware that the Commodore’s Messengers organization between 1978 and 1980 was basically managing the organization.

THE COURT: Was that the situation, if you know?

THE WITNESS: No, sir.

MR. HARRIS: The organization?

THE COURT: Whatever organization.

What organization did the CMO exist in?

THE WITNESS: At that time the CMO existed within the Church of Scientology of California.

THE COURT: Was it a department of Sea Org?

THE WITNESS: Sea Org is generally what is called the

2786

people who have –

THE COURT: A thousand years to a billion years?

THE WITNESS: Technically speaking, yes. But Sea Org members could be in various churches around the world, sir.

Q BY MR. FLYNN: Do you know anything about the CMO managing any corporation organizations between 1978 and 1960?

A I know that the CHO at one time was — would find trouble spots within various organizations, if an organization was not doing well, they would send off missions to assist that organization or that church to do better.

Q Now –

A But they were not doing day-to-day management of that organization or any organization except their own.

Q Are you familiar with the policy called "The Founder"?

A Yes. I think I recall that.

Q And was that policy created about the time that the Guardian’s office was created, in 1966?

A I think you had better show me what you’re talking about.

Q This policy here, Mrs. Hubbard. Are you familiar with it?

THE COURT: You have got an exhibit there, counsel?

MR. FLYNN: 500-L, Your Honor.

THE WITNESS: Let me read it.

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Q BY MR. FLYNN: I direct your attention to the part wherein it is stated:

"My office of LRH as founder remains mine as the public demonstrably stays away from Orgs that do not bear the name L. Ron Hubbard, and I do not wish to damage their traffic volume. This is not a retirement but a resignation of all conduct or posts in the conducting of organizations by myself."

How, first, are you familiar with that?

A Familiar with what? This?

Q Correct.

A Yes.

Q And was that policy created about the time that the Guardian’s office was created?

A No.

Q When was the Guardian’s office created?

A In March of 1966.

Q And this is September of 1966; correct?

A Yes.

Q When was your post of Controller created?

A In 1969.

Q And who was the last executive director of the Church of Scientology?

A I am sorry –

THE COURT: Do you mean looking backward from now or some time in the ’70’s or what?

Q BY MR. FLYNN: Let’s start from the present if you know.

2788

Who was the last executive director of the Church of Scientology?

A The last executive director of California — are we talking about the Church of Scientology of California? Because there are different churches all over the world. I don’t know which one you are talking about.

Q Are they all corporately separate?

A Yes, most of then.

Q And are any of those corporations controlled by any one person?

A All of then controlled by any one person?

Q Right.

A Oh, good heavens, no. That would be impossible.

Q And in 1966 when the Guardian’s office was created, were you the first Guardian?

A I was the first Guardian, yes.

Q And who was the executive director just prior to the time that the Guardian’s office was created?

MR. HARRIS: Is this ecclesiastical or in the corporation where it was at the time? There is an ambiguity, Your Honor. Again we are getting into –

THE WITNESS: He keeps lumping all churches in like a church.

THE COURT: All right, let’s talk about the Church of Scientology of California.

THE WITNESS: All right. So what is your question?

Q BY MR. FLYNN:  Well, let me ask you this,

2789

Mrs. Hubbard: When your husband wrote, "Conducting of organizations by myself," what organizations was he referring to?

THE COURT: If you know.

Q BY MR. FLYNN: If you know.

A He was referring to the organizations that were at St. Hill Manor, East Grinsted [Grinstead], Sussex, England at that time.

Q Was he referring to the Church of the Scientology of California?

A I don’t remember what the corporate — whether we had a church at that time or whether it was an association of Scientologists International.

Q If he had any participation, it was as a director of the Church of Scientology of California. Was it your understanding he was resigning from conducting those organizations, too?

A I think that to the extent that my husband was on like a day-to-day handling of doing anything in relationship to management that is what this refers to.

Q Of any organization?

A Mainly the organization of St. Hill’s, yes.

Q Did it include any other organization?

A In that the St. Hill organization helped supervise other organizations, to that extent, but to a limited extent only.

Q Do you know there are numerous exhibits on the date of that wherein your husband was instructing boards of directors to send him various items and transfer moneys and

2790

bank accounts and do things like that?

A I am sure he did because, you know, like at that time that that was occurring, he wanted to establish — he felt that we were in difficulty in England and he wanted to establish an OT base which was at sea, and so that to the extent that that is what he was going to do, I think that the church certainly was willing to help him do that.

Q So he could jump in any time and issue those types of instructions was your understanding?

A If he wanted to, yes, because he is our leader.

Q Thank you.

A But not our manager.

Q Was Mr. Hubbard the executive director prior to 1966?

A Yes.

Q Was there any executive director after Mr. Hubbard up until William Franks was appointed in 1981?

A No, we had what we called commanding officers and association or organization secretaries.

Q Are you familiar with the policy written by your husband called the Guardian?

A Yes, I am.

Q In March 1966?

A Yes.

Q And isn’t it true at the beginning of that policy it says, "There is only one senior post to the Guardian and that is the post of Executive Director"; is that correct?

2791

A That was correct at that time.

Q And that was the post Mr. Hubbard resigned from; is that correct, Executive Director?

A Yes, at that time, yes.

Q And then the next Executive Director was Mr. Franks in 1981?

A Called Executive Director, yes, but there were individuals in churches who were called Commanding Organizations of their organization or who were organization secretaries or association secretaries for their organization.

Q So, per that policy on March 1, 1966, the Guardian, when you husband resigned and you were appointed the Guardian, you were the highest official of the Church of Scientology; isn’t that correct?

A That might have been correct, but that wasn’t the way it was actually affected.

2792

Q Did the Guardian’s office basically control finances throughout the world between 1966 and the time you left the post?

A No. They basically didn’t, Mr. Flynn.

Q Did that policy say that the Guardian has the authority to do that, Mrs. Hubbard?

A It said that the Guardian could have the authority, but the Guardian did not exercise that authority.
And I never did.

Q Were you highest official of the church? Is that correct?

MR. LITT: Object. The document says what it says. Mr. Flynn is arguing with the witness.

THE COURT: It is argumentative.

THE WITNESS: See, at some point, Your Honor, that was all changed. In 1969 another management structure came in. And so it is constantly shifting, you know what I mean, with different structures and different –

Q BY MR. FLYNN: Constantly shifting, Mrs. Hubbard?

A Yes, Mr. Flynn.

Q Now, let me show you exhibit AAA, "Guardian Program Order 121669."

A Yes.

Q Have you ever seen that document before?

A Yes. I wrote that. It was issued in December, yes.

Q You wrote that?

A Yes, I did.

2793

Q Let me show you exhibit HHH; are you familiar with that?

A No, I am not familiar with this.

Q You are not familiar with exhibit HHH?

A No.

Q Would you look through it?

A I am still not familiar with it.

Q you are familiar with Guardian Program Order 121669, however; is that correct?

A Yes, that is correct.

Q Do you know what a "Information Full Hat" is?

A It must have been a hat that the Information for anyone in the Information Bureau had.

Q What was the Information Bureau?

A The Information Bureau is the bureau within the church within the Guardian’s office which was merely a department within a church, one of twenty-one departments in the church. And that one bureau dealt with gathering of information, doing investigations, assisting with legal actions, assisting with gathering information to help in public relations and so on.

Q Did you have any participation in preparing any of the Hat Packs for any Guardian office departments?

A No, I did not.

Q Do you know who did?

A Guardian office people at Worldwide did.

Q Jane Kember?

A I don’t think she did because it would be a more

2794

junior person down the line that would be preparing those.

Q Preparing the Hat Packs?

A Yes. Like an administrative person at a lower level within the organization.

Q Then they get sent up for approval?

A I don’t know if they were sent up for approval or not.

Q Would that be the normal thing that would take place within the Guardian office such as the structuring of Hat Packs to train Guardian office people; is that the type of thing that would go up the line for approval?

MR. HARRIS: Three compound questions there, Your Honor.

THE COURT: Sustained.

Q BY MR. FLYNN: Were Hat Packs a significant thing within the Church of Scientology, Mrs. Hubbard?

A I would say that they were, yes. A person had to be trained.

Q You had to train people to do their jobs; correct?

A That is correct.

Q Now, would those packs normally get approved by seniors are people who, as you say, wrote them?

A I would say like on this one, I would say that Mo Budlong probably saw this and might have okayed that. I don’t know.

Q And let’s take the Information Bureau Full Hat.

A This one?

Q Was the Information Bureau a significant part

2795

of the Church of Scientology in the 1970’s?

A It was not a significant part. It was merely one bureau within twenty-one departments. The Guardian’s office was only one department within a twenty-one department organization. As far as it being, "significant," Mr. Flynn, I think it was maybe significant to those of us within the GO who had anything to do with the Information Bureau.

Q So it was significant to you?

A It was significant only to me in that it was something that was being done within the Guardian’s office, yes.

Q And were the training manuals or Hat Packs significant to you, Mrs. Hubbard?

A I didn’t — that wasn’t my perview. I didn’t have to authorize it, okay, or see Hat Packs.

Q You were the highest official in the Church of Scientology; is that correct?

A I was not the highest official within the Church of Scientology. That was issued in 1969.

Shortly after 1969, in the early ’70’s, the management structure changed within the church. Certain management functions were brought aboard Flag at which time I became merely head of one of the, as I say, twenty-one departments within the church.

Q And –

A So what is your question on this one?

Q So with regard to the Information Full Hat,

2796

activities of the Information Bureau that called for, for example, burglarizing places, would that be something that the Information Bureau would normally engage in the 1970’s?

MR. HARRIS: Objection. That assumes facts not in evidence.

THE WITNESS: If you have something specific –

THE COURT: I think there is some evidence in some of these United States District Court or Circuit Court opinions relative to that subject that have been submitted to me by both sides.

MR. LITT: But what does it have to do with this case?

THE COURT: It goes to, I suppose, credibility if nothing else; corroboration of the defendant’s testimony.

2797

THE WITNESS: The defendant never worked in there. I don’t know what he is talking about when he assumed so much Information about the Guardian’s office, other than what you must have told him or coached him on.

Q BY MR. FLYNN: Oh, you know the type of evidence that would be in the Guardian’s office that Mr. Armstrong would not know about; is that correct?

A No, that is not correct, Mr. Flynn, but what is your question?

Q Here is a document. Let’s take, for example, the vetting writeup which is an exhibit.

Are you familiar with the vetting writeup?

MR. LITT: If there is an exhibit, can the exhibit be shown to the witness?

THE COURT: Well, it is going to take some time. That is the problem.

If you are familiar, the witness can certainly answer if she is familiar.

THE WITNESS: I said in my last testimony that I had heard about vetting, Your Honor, and I heard about vetting from his associate, Mr. Logan, on another civil case down in Florida.

THE COURT: You never heard of it within the organization?

THE WITNESS: No, sir. I never heard of it. It was not done in my office.

Q BY MR. FLYNN: You know nothing about vetting?

A I have already answered your question.

Q We will take a look at exhibit W.

2798

A What do you want me to see about this?

Q Can you tell me whether you have ever seen that before?

A No.

Q Let me point you to page 2, regardless of whether you have seen this document, now do you know anything about a procedure regarding the ordering of a breaking and entering, a B and E?

A What are you asking?

Q Do you know anything about procedures of a B-l bureau to do those types of things?

MR. HARRIS: I will object to the form of the question. He is pointing to the document which the witness hasn’t identified. If he wants to ask her directly without reference to the document, please do so.

THE COURT: Well I don’t know that that is any kind of a valid objection. He is showing us something which appears to be printed material, I gather, that is identified as coming from the church or some portion of the church or some part of the church.

She was Guardian and perhaps she has some knowledge of it, what is written there or procedure set forth there. Overruled.

Q BY MR. FLYNN: Do you know anything about the mentions of the ordering of B & E’s?

A Being vetted?

Q Vetted from B-l files.

A This is the first time I have seen this

2799

and the first time I know anything about it.

Q Never heard of anything like that?

A No, I have never heard anything like that.

Q Or evidence that anything was stolen from one of our guys; do you know anything about vetting B-1 files in relation to those type of things?

A No. As I say I haven’t seen this before.

Q Or implications of posing as a government agent?

A I have not seen this document before and you can keep asking questions and getting the same answers. I haven’t seen the document before.

Q Have you seen Guardian’s program order 121669 with your name on it?

A I issued that.

Q And with regard to exhibit triple H, page 20 item 38 of exhibit triple H, which is the information full hat in training Guardian office agents to apply Guardian program order 121669, when you wrote the policy, did you incorporate the policy into any training manuals to train Guardian’s office agents how to apply Guardian program order 121669?

A I didn’t write this into hat. I wrote this as a program order and if somebody included it as a hat, they included it, but I don’t know anything about it.

Q Not including a Guardian program order of the type of 121669 would not have required your approval?

MR. HARRIS: I don’t understand the question.

2800

THE WITNESS: I don’t understand.

MR. FLYNN: Vague and ambiguous.

THE COURT: I will sustain the objection.

Q BY MR. FLYNN: Mrs. Hubbard, would it have required your approval to put Guardian program order 121669 into the information full hat of the Guardian’s office?

A No it would not have required my approval.

Q Do you know whether in the ’70’s pursuant to Guardian program order 121669 PC files or auditing files were being culled for information?

A No, I did not know that.

Q You don’t know anything about that?

A No, I did not know that.

Q In this Guardian’s program order did you write this?

MR. LITT: Objection; asked and answered.

THE WITNESS: Yes, I did.

THE COURT: She’s already indicated she did. Let the answer stand.

Q BY MR. FLYNN: When you stated

"To use any and all means to detect any infiltration, double agent or disaffected staff member, Scientologist or relatives of Scientologists and by any and all means to render null any potential harm such might render or have rendered or might render."

Was it your intention to use any or all

2801

means to — against disaffected staff members, Mrs. Hubbard?

A I think that is more like saying to a football team, "Go get them, man" or "Go slaughter them." But it is not to be taken literally.

Q Did you do word clearing in Scientology?

A I have done word clearing, yes.

Q Isn’t one of the fundamental principles of your husband that if there is a misunderstood word, you go back and you look it up and you find exactly what it means?

A Yes, it is.

Q That is very important in Scientology to use words exactly for what they mean; isn’t it, Mrs. Hubbard?

A Not to use exactly for what they mean. It is to look up words that you don’t understand so that you do have an understanding of them.

Q When a Guardian’s office agent was applying Guardian program order 121669, if he didn’t understand any word, would he go look it up to make sure what it meant?

MR. HARRIS: That calls for speculation and a conclusion.

THE COURT: As framed, it would. Sustain the objection.

Q BY MR. FLYNN: Mrs. Hubbard, let’s go over to the operating targets. What are operating targets?

A Targets one does operating. You do them.

Q You put them into practice?

A Effect? that’s right.

Q And there is a notation to make full use of all files in the organization to affect your major target. These

2802

include personnel files, ethics files, dead files, central files, training files, processing files?

A Yes.

Q And requests for refunds?

A Right.

Q Now, processing files are auditing files; is that correct?

A No they are not.

Q Do you know how many Scientologists are here in the audience?

A Processing files were at that time when I wrote this in 1969 were administrative files, and the PC folder was always called the PC folder.

Q So it is your testimony that in 1969 that meant administrative files but not PC files; is that correct?

A It was always a PC folder. It was always called a PC folder. PC stands for preclear, and processing files were our administrative files that were kept by first the director of processing and later by the tech services department.

Q So as I understand your testimony, processing files are not auditing files when you wrote that; is that correct?

A That is absolutely correct.

Q So you wanted the B-l bureau or someone in the organization to go through personnel files, ethics files –

A You don’t have to yell.

Q Excuse me. — dead files, central files,

2803

training files, but not PC files?

A PC folders; not PC files. That is processing files which are administrative files kept separately.

2804

Q And if there are hundreds of papers of literature in Scientology policies that say processing files or auditing files, then all of those policies would be mistaken; is that correct?

A I haven’t seen hundreds –

MR. HARRIS: Objection. Assumes a fact not in evidence.

THE COURT: I’ll sustain it.

THE WITNESS: You are a big dreamer. I haven’t seen hundreds.

Q BY MR. FLYNN: Let me show you this document dated July 28, 1972; "The following data was gotten from Arden’s PC folders with a routing form up in upper left-hand corner."

Have you ever seen something like that before?

MR. LITT: Is the question did she ever see anything like that before?

Q BY MR. FLYNN: Did you see that?

A No, I didn’t see this.

Q Did you ever see any communication similar to that in the Guardian’s office where material was taken from PC folders?

A No, I did not.

Q For example, this person, talks about several self-induced abortions.

Did you know about those?

A No, I did not.

MR. LITT: May that be marked, Your Honor?

2805

THE COURT: JJJ.

Q BY MR. FLYNN: Let me show you a document dated 11-11-76 to Rawhide ICB/ICS.

May this be marked next in order, Your Honor?

THE COURT: KKK.

Q BY MR. FLYNN: What was Rawhide IC, Mrs. Hubbard? Do you know?

A I don’t know.

Q IC means in charge; right?

A Maybe. Yes.

Q And this is a form for the extraction of information from files; isn’t that fair to say?

MR. LITT: Objection. Calls for a conclusion. The document speaks for itself.

THE COURT: That is what it appears to be. Overruled. Does it appear to be such?

THE WITNESS: It appears to be some sort of form, yes.

Q BY MR. FLYNN: ". . .I have checked the following files in the organization for info on this person, pre-OT files."

The person named is Donald Wilson; do you see that, Mrs. Hubbard?

A Yes.

Q "An Organization B-l Branch 2 files are also noted."

What are Organization B-l Branch 2 files?

A That night be internal security files of the

2806

Guardian’s office. I am not sure. I don’t know what that designation is.

Q You don’t know what B-l files were?

A Of course, I know what B-l files were.

I don’t know what this is referring to there, Mr. Flynn.

Q Let me show you a document dated 27 September, 1978, "Info re Donna Reeves."

THE COURT: Use "Donna R." I don’t want to get involved with identification of any individuals.

Q BY MR. FLYNN: Donna’s auditing files start with July, 1963. It goes on to state who she has been promiscuous with and masturbating with coffee grounds, that type of thing.

Do you see that, Mrs. Hubbard?

A I see that, Mr. Flynn.

Q There is a notation during this auditing she "RS’s on Jane Kember."

What does RS stand for?

A Rock Slam.

Q What does that mean?

A That means that a person has overt acts upon — overt acts, meaning acts of contra-survival and so on against a person against whom they are RS’ing, rock slamming. And the people mentioned are.

Q The type of Information that is in here, to your knowledge was the Guardian’s office extracting information in 1976 from people’s PC files of this type on a List-1 Rock

2807

Slam Project?

A I don’t know.

THE COURT: We’ll take a 15-minute recess.

(Recess.}

2808

THE COURT: All right, we are back in session. Retake the stand, Mrs. Hubbard. State your name again for the record. You are still under oath.

THE WITNESS: My name is Mary Sue Hubbard.

Q BY MR. FLYNN: Mrs. Hubbard, you mentioned that the processing files in your understanding were administrative files; is that correct?

A That is correct, yes.

Q So the administrative files could be used to attack an individual but not the PC files?

MR. LITT: Objection; argumentative. That is not what the document says.

Q BY MR. FLYNN: Well, the administrative files could be used for any and all means against disaffected staff members?

A It wasn’t used against them. It was used to help handle them.

Q Now, processing files, who in the organization had processing files?

A They were kept by the director — later in the tech services department, and they were generally kept by the head of the department of tech services.

Q The director of processing?

A Director of processing had access to those files and put information into those files, yes.

Q The tech services were auditing services?

A Technical services was a department to provide service to both the counseling department and to the training department.

2609

Q Auditing services?

A Yes, auditing.

Q And the director of processing kept processing his files in the technical division?

A Yes.

Q And what did the director of processing do besides maintain files, Mrs. Hubbard?

A The director of processing scheduled people who were undergoing counseling. They assigned auditors to people who were undergoing counseling. They interviewed people who were undergoing counseling. They monitored their progress.

Q And the director of processing maintained the auditing files?

A Maintained the processing files.

Q And also the auditing files?

A The PC folders were also kept separately in Tech Services, yes.

Q Under the director of processing?

A Under the director of Tech Services.

Q Let me run through quickly some more of these exhibits, Mrs. Hubbard.

You don’t have any knowledge about what Rawhide was; is that correct?

A No, I don’t.

Q How about a case, Kermit V. Miller; do you have any understanding what that was?

A Never heard of the name.

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

2810

THE COURT: MMM.

Q BY MR. FLYNN: This is another form similar to the last form which PC OT files were looked into on this particular person, Emmylee Miller?

A Yes.

MR. LITT: Is that calling for Mrs. Hubbard to say what that is?

THE COURT: She can say what it appears to be. It is a description.

Q BY MR. FLYNN: On the second page during a Sec Check she told of two years ago she had an affair with a married lawyer in Virginia; what is a Sec Check?

THE COURT: The first page appears to talk about a male and the second nay appear to be a female. I don’t know if those are put together.

MR. FLYNN: We’ll separate them, Your Honor, then.

One is Kermit V. Miller; the other one is Emmylee Lynn Miller.

The form for the first page will be marked as MMM.

Q You are not familiar with that form?

A No.

Q And this one, Emmylee, may that be marked NNN, Your Honor?

THE COURT: Very well.

Q BY MR. FLYNN: The second page of Emmylee, June 12, ". . .Sec Check on the question of having done things that she could be blackmailed for. She said that two years

2811

ago she was dating and having a love affair with some married lawyer in Virginia."

To your knowledge were those types of things being culled from auditing files when you were the head of the Guardian’s office, Mrs. Hubbard?

A I think this might have been something that someone wrote in order to be employed in the Guardian’s office. I don’t know that this was — it doesn’t seem to be — I don’t know.

THE COURT: I didn’t understand.

Do you mean somebody did this to become employed in the Guardian’s office?

THE WITNESS: It looks like somebody has filled out information for employment.

THE COURT: Do you mean just made it up?

THE WITNESS: Within the Guardian’s office anyone had to fill out a complete sort of life history form of themselves in order to be employed. This looks like what this might be. I’m not certain, but this is what it seems to be.

THE COURT: And the word "excerptions"?

THE WlTNESS: That would be excerptions taken from sort of like life history write-ups.

THE COURT: The person volunteered this information and the notation that they could be blackmailed for it was just an observation that the person had made about themselves?

THE WITNESS: Yes. In other words, if they — if there

2812

is — I guess if they felt there was anything that they could possibly be blackmailed for, they would mention it in their employment application.

THE COURT: And the Guardian’s office would be interested in that type of information, that a person could be blackmailed for?

THE WITNESS: They wouldn’t want anybody on staff who might be subjected to blackmail, yes.

Q BY MR. FLYNN: Now, some of these documents have routing forms such as A/G, DC, DD, DG –

MR. LITT: Can we know what we are referring to here?

MR. FLYNN: "Intel weekly report ending June 29, 1972. — Dear Terry" –

MR. LITT: Has that been marked?

MR. FLYNN: OOO, please, Your Honor.

THE COURT: All right. OOO.

MR. FLYNN: ". . .situation, additional data needed on Terry. PE has made some veiled accusations against Scientologists and has threatened to sue more than once. Completely went through all his PC files and compiled some interesting data which directly contradicted info pro had given me during the interview."

MR. HARRIS: That is PC folders, Your Honor.

MR. FLYNN: PC folders.

Q Incidentally, in the Guardian’s office, routing was used; is that correct, routing forms?

A Yes.

Q You are familiar with routing forms?

2813

A Yes, I was.

Q And does this document refresh your memory at all as to whether PC folders were culled for information to use against staff members?

A No. It doesn’t refresh my recollection.

Q Is it your testimony that that wasn’t done, Mrs. Hubbard?

A It is not my testimony that it was not done. It might have been done, Mr. Flynn, but when I wrote this and that other one, I certainly did not mean for that to be done.

THE COURT: Who is A/G or what was A/G?

THE WITNESS: That stands for Assistant Guardian. That would be the Assistant Guardian in the local church in Washington, D.C., the founding Church of Scientology of Washington, D.C.

Q BY MR. FLYNN: If this program to cull files was put in training manuals in the Guardian’s office and the Guardian’s office agents were trained on that for a decade or more, that wasn’t your intention either?

A No. If it had been my intention, I would have indicated, you know, put it into a hat. The programs were not usually put into hats.

Q Programs weren’t put into hats, Mrs. Hubbard?

A Usually not put into hats, Mr. Flynn.

Q You knew what went into hats and what didn’t?

A I’m familiar with what went into hats and what didn’t, yes.

Usually policies go into hats.

2814

Q If this practice was taking place while you were the Controller of the organization, that was not your intention; is that your testimony?

A That was not my intention, yes. When I indicated and wrote this in 1969, I meant that they would go through the processing which was an administrative file. I think I have got the wrong one.

Q Let’s take a look at this one. Start at the top, "DGUS. Dear Henning." Who was that?

A That was the Deputy Guardian US.

Q That was just a post a little below you; correct?

A That was a post considerably below me, yes.

Q How far below you was it, Mrs. Hubbard?

A It was below me all the way from like all the worldwide organizations.

Q This person was the head of the Guardian’s office in the United States?

A Yes he was continental area.

Q And you were the head of the Guardian’s office worldwide?

A No I wasn’t.

MR. LITT: Objection.

Q BY MR. FLYNN: You were the Controller?

A That’s correct.

Q But you supervised Guardian’s office activities worldwide?

A I had a general overview of them; correct.

2815

Q Now this document says:

"Dear Henning,

"You mentioned you were interested in other Celebrity Files obtained per the above target.

"We have now obtained files on Edmond Brown, Edmond Brown, Jr., Tom Bradley and his wife Ethel."

MR. LITT: Has this been marked as an exhibit?

MR. FLYNN: May this be?

THE COURT: Triple P.

Q BY MR. FLYNN: Now, do you know what was the Celebrity Center, Mrs. Hubbard?

A The Celebrity Center is a separate organization, church which handles people in the arts and that sort of field.

Q Celebrities?

A Yes.

Q Like John Travolta?

A Yes.

Q And incidentally, when the raid took place, some 80 to 110,000 documents of this type were seized from Mr. Heldt’s office?

THE COURT: From whom?

MR. FLYNN: Henning Heldt’s.

MR. LITT: The words of this type are vague and ambiguous, Your Honor.

Q BY MR. FLYNN: Well, do you know, Mrs. Hubbard?

THE COURT: Well, if she knows, she can answer.

THE WITNESS: I don’t think that that many were taken

2816

directly from Mr. Heldt’s office, no.

Q BY MR. FLYNN: They were taken from other offices, too?

A Yes.

Q Now we have one that starts off:

"To DGUS

"Via DGUs Comm AE

"Dear Henning:

"As called for in target 6, we have collected data from LAIRS for use in ops or branch 1 PR that is entirely in IRS territory. Attached as evidence is data from a celebrity file. This target is done."

Dick responds, "Beautiful."

You see that, Mrs. Hubbard?

A I can see it, yes.

Q Have you seen that document before?

A No.

MR. FLYNN: May that be marked next. Your Honor?

THE COURT: All right, triple O.

THE CLERK: Q.

THE COURT: Just put a little tail on it.

Q BY MR. FLYNN: And as a note, "Have we got any other celebrity files?"

Do you know whether in 1976 the organization was involved in litigation with the IRS?

A I am sure that different churches had different tax cases on-going with the IRS. I don’t think that we had.

2817

I don’t think the Church of Scientology of California at that time did have.

Q And do you know whether information was being collected from wherever it could be collected in connection with that litigation, for example, from celebrity files?

MR. HARRIS: Well, in connection with the litigation, what litigation? Assumes a fact not in evidence.

MR. FLYNN: The litigation the witness has testified about that was going on in connection with various Churches of Scientology throughout the United States, but not necessarily the Church of Scientology of California.

A No, this wouldn’t have anything to do with that litigation.

Q It would just have to do with getting information collecting data from LAIRS?

A You mean like on the celebrities thing?

Q On these particular celebrities, getting their tax information?

A I didn’t know about this at the time. Subsequently in later litigation I was informed that these files had been obtained and sent to the celebrities by members in the church.

Q Now –

A So that they could see what IRS was doing to them.

Q You controlled basically Guardian’s office finance lines; is that correct, Mrs. Hubbard?

A No I did not.

Q Who did?

2818

A I am not — I don’t understand what you are talking about, what the funding of the GO had to do or whether you are talking about the internal financial expenditures of the GO. Which are you talking about?

Q Internal financial expenditures, where did that money come from?

A Depending upon the church and corporation concerned, it came from that particular church, so you will have to ask something specific.

Q Well, did it ever go to GOWW and then get expended for Guardian’s office operations?

MR. LITT: — what –

THE WITNESS: I don’t know.

2819

MR. LITT: Objection.

MR. FLYNN: come into Guardian’s Office Worldwide and then get exposed to Guardian’s Office operations?

THE WITNESS: Money — Guardian’s Office Worldwide did receive money. And it did disperse money. It paid staff; it bought supplies; what else?

Q BY MR. FLYNN: Did it support the B-l branch of the church?

MR. LITT: Objection. Vague as to church. Which?

THE COURT: Sustained.

Q BY MR. FLYNN: Did it support the B-l branch of the religion of Scientology?

A It supported — at WW their income and whatever they had supported their Information Bureau at Worldwide.

Q What is the most fundamental practice of Scientology with regard to counseling? Is it the auditing process?

A I think it is a combination of counseling and training.

MR. FLYNN: We have a document, Your Honor, "Excerption of Ira PC files." Dated sometime in 1977.

May that be marked as RRR?

THE COURT: RRR.

Q BY MR. FLYNN: "Dear Cindy. Here is the pertinent data from Ira’s PC files."

Do you know who Cindy is?

A That might refer to Cindy Raymond.

Q Who is Cindy Raymond?

2820

A She worked at the U.S. Guardian’s Office.

Q And there are references on the first page about the person’s, for example, masturbation practices, that type of thing, Mrs. Hubbard, at the bottom.

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

THE COURT: Not as yet. It is not in evidence.

MR. LITT: It still speaks for itself, Your Honor.

THE COURT: Do you want to stipulate it can come into evidence?

MR. LITT: No.

THE WITNESS: Yes. Have you got something on masturbation? You keep asking me about it.

Q BY MR. FLYNN: Do you think your organization was interested in those types of things from a person’s PC files, Mrs. Hubbard?

A I don’t know.

I am looking at documents that seem to indicate that there was, yes, Mr. Flynn.

Q And those documents were obtained by the B-l Bureau from a person’s PC files, at least, on the face of the document?

MR. LITT: Objection. That calls for a conclusion. The witness says she knows nothing –

THE COURT: She can answer if it appears that way.

THE WITNESS: I am not certain exactly what they got this for.

Q BY MR. FLYNN: so if there was an entire Hat Pack that related to B-l activities that included a program order

2621

that related to processing files and collecting that type of information, it is your testimony you don’t know anything about the creation of such a Hat Pack; is that correct?

A That is correct.

MR. LITT: Objection. Asked and answered.

THE COURT: He put it in a different context. Overruled.

Q BY MR. FLYNN: With regard to exhibit OOO, Mrs. Hubbard, who is the CSG?

A That would have been myself.

Q Commodore Self-Guardian?

A Yes.

Q And on the routing, at least per the routing, that went to you; is that correct?

A It would have gone to my controller and my controller would have decided — my communicator and my communicator would have decided whether I was to receive this or not receive this.

Q This routing says "CSG COM" and then after that "CSG"?

A That is what it says. What actually happens is two different things.

Q So your communicator would have made that decision?

A That is correct.

Q Mrs. Hubbard, do you know Dr. Eugene Denk?

A I do.

Q When did you last see him?

2622

A It must have been in January, '83.

Q January '83; do you recall seeing him in October, 1983?

A No. I don’t recall seeing him in October, '83.

Q Do you recall whether Diana and Arthur saw him in October, 1983?

A I don’t think so.

Q Is he your doctor?

A He is my doctor, yes.

Q Is he your husband’s doctor?

A Not that I know of.

Q In 1979 at Gilman Hot Springs with Kima Douglas did he save your husband’s life from a pulmonary embolism?

A He attended my husband at that time, yes.

Q And he gave him –

MR. LITT: Objection. What is the relevance, Your Honor?

THE COURT: I don’t know.

I’ll sustain the objection.

Q BY MR. FLYNN: In your direct examination you testified that you knew of no person who is in communication with your husband; do you recall that testimony?

A That is correct.

Q And do you know whether Dr. Denk is in communication with your husband?

A I don’t believe he is, no.

Q And Pat Broeker; do you know whether he is in communication with your husband?

2823

A I don’t know.

Q Ann Broeker; do you know whether she is in communication with your husband?

A I don’t know.

Q And David Miscavige; do you know whether he is in communication with your husband?

A I don’t know.

Q What is the "Hidden Data Line," Mrs. Hubbard?

A That is someone giving technical information to the public in relationship to Scientology which is not — which they pretend is something that is in the technical materials, but which is not.

2824

Q Well with regard to who is running the Church of Scientology while your husband is in seclusion, have you heard of something called "The Hidden Data Line" about communications to and from your husband?

MR. HARRIS: Well, objection. It is compound and calls for a conclusion and also calls for hearsay. Have you heard about?

THE COURT: Well it is a preliminary question. You can answer that question yes or no.

THE WITNESS: I have never heard of such a thing as Hidden Date Line in that particular context.

Q BY MR. FLYNN: Do you have any knowledge whether in the last three years the organization, it has been represented on a continual basis to organizational staff that management is coming down from your husband through the Broekers and David Miscavige and their orders are to be obeyed based on that communication link?

MR. HARRIS: Objection; compound.

THE COURT: Well I will sustain the objection.

THE WITNESS: I have never heard of anything like that.

MR. HARRIS: Please, Mrs. Hubbard, when I object and the judge sustains the objection, don’t answer.

THE WITNESS: Oh, I am sorry.

THE COURT: Oh, we will let the answer stand. She hasn’t heard about it.

Q BY MR. FLYNN: So you wouldn’t know anything about the upper level management levels right now of the organization, about the fact that everyone is relying on a

2825

comm line through Miscavige?

MR. LITT: Objection; assumes facts not in evidence.

THE COURT: Sustained.

Q BY MR. FLYNN: Was it the practice of the organization to obtain undated letters of resignation from members of the board of directors in the 1970’s and 1980, Mrs. Hubbard?

A Yes, at some points, yes.

Q And they went into the Guardian’s office; is that correct?

A That is correct.

Q Without going into the details, Mrs. Hubbard, would you state what authority, if any, you had in connection with the MCCS project?

A I had general sort of like co-supervision of that project.

Q And who was the head of that project?

A Laurel Sullivan.

THE COURT: I am sorry?

THE WITNESS: Laurel Sullivan.

Q BY MR. FLYNN: And Laurel Sullivan went back in terms of years with your husband back to 1966 or '67?

A I don’t know what you mean with my husband. She went back in Scientology to 1967.

Q And she was your husband’s public relations representative for many years; is that correct?

A At different times, yes.

Q Now, as public relations representative, it was

2826

Laurel Sullivan’s responsibility and duty to handle public relations questions about L. Ron Hubbard; is that correct?

A Possibly, yes, part of the overall public relations, yes.

Q So if a Scientologist and/or someone from the outside came and asked, well, for example, if the document "What Your Fees Buy" is true, it would be Miss Sullivan’s responsibility to respond to that question; is that correct?
A No.

MR. HARRIS: It is compound and calls for speculation and a conclusion.

THE COURT: You want to read the question back. (Record read.)

THE COURT: Assuming the question was directed to her, would it be her responsibility to answer that?
You can answer that.

THE WITNESS: I think that Laurel Sullivan would not have handled that sort of thing. I think that would have been more done down at a local level.

Q BY MR. FLYNN: At a local level?

A I think she would have — I mean, I don’t — never studied her post or anything like that, but I think that she would have more of a broad planning type of action and be more senior to that type of thing.

Q Well it would be her responsibility to develop a PR line on L. Ron Hubbard?

A To handle broad public relations type of actions, yes.

2827

Q So if questions came back up the lines about whether L. Ron Hubbard was controlling the church or receiving church funds, those types of questions, if these came up lines, she in her public relations capacity would have to sort that out and answer them; is that correct?

MR. HARRIS: Objection; compound, calls for speculation and a conclusion.

THE COURT: Well are we talking about when Mrs. Hubbard was the Controller of the church?

MR. FLYNN: While she is Controller.

THE COURT: You can answer that.

THE WITNESS: Well I don’t know what she would have coming up her lines, whether something like that might come up here lines or not. I don’t know.

Q BY MR. FLYNN: Well, for example, if someone came to her and said, "You husband is not a nuclear physicist."

MR. LITT: Same objection.

THE COURT: I haven’t heard the question completely yet.

Q BY MR. FLYNN: Do you know whether it would be Laurel Sullivan’s responsibility to find out is he a nuclear physicist and respond to it on the PR line?

2828

MR. HARRIS: Same objection; also compound.

THE COURT: Overruled.

THE WITNESS: I don’t know. It might — that might have happened. I really don’t know.

MR. FLYNN: Thank you, Mrs. Hubbard.

THE COURT: Mr. Litt.

CROSS-EXAMINATION BY MR. LITT:

Q Mrs. Hubbard, Mr. Flynn showed you maybe 10 or so pages of materials that he asked you about making reference to pre-clear folders and discussions of what might be in them and asked you whether you had seen those before, none of which you had seen before.

Were you able to recognize what the apparent source of any of them was from any numbers that were on top of the documents?

A Yes.

Q And what conclusion were you able to reach?

A That those were part of the seized documents that were seized by the FBI in their raid upon the church.

Q Or apparent copies?

A Apparent copies of same, yes.

Q Now, how many documents were seized by the FBI from the church in 1977?

A About –

THE COURT: Let’s be more specific.

Are you talking about the Church of Scientology

2829

of California?

Q BY MR. LITT: The Church of Scientology of California.

A About 200,000 documents.

Q And do you know what percentage 10 pages of 200,000 –

A Well, I’m not a mathematical genius, but that is a minor percentage.

Q Now, one of these documents Mr. Flynn showed you had a routing on it, a carbon copy of a CSG which was another term used for controller; is that correct?

A Yes.

Q Within your office of the controller how many staff did you have that worked under you?

A I had approximately –

Q Let’s take — well –

A — about 10.

Q And approximately — taking the years — let’s take the years that the raid occurred, 1977, the FBI search; roughly how many, if you know, pages of documents would come into the office of the controller per week?

A I would say roughly about 100,000 or more pieces of paper.

Q And of that percentage, of that amount would you see all of those and review them?

A No, not all of them.

Q Would you see even 1 percent of them?

A No. I would say less than 1 percent.

2830

Q And with respect to the document LLL which you said your communicator would see, that occurred in 1972; you had fewer staff then, is that right?

A That is correct.

Q But everything would still go through your communicator before anything would go to you?

A That is correct.

Q Now, Mrs. Hubbard, take a look at OOO.

There are some notations at the top of OOO; is that right? You see them where the carbon copies are, there is a routing on the left and then a CC on the right; is that correct?

A Yes.

Q And the routing is who the documents go to through a chain; is that correct?

A That is correct.

Q And the carbon copies are not part of that routing, but there are additional copies that are sent; is that right?

A Correct.

Q Now, do the notations at the top in the absence of any signing off under your communicator indicate anything about whether or not it was received by your communicator?

A It indicates if it isn’t signed off, my communicator didn’t receive it.

Q Mrs. Hubbard, while you held the post of controller did you ever direct anyone to go through any pre-clear folders?

2831

A No, I did not.

Q And if that occurred at any time, was it done with your knowledge or authorization?

A No.

Q Personal knowledge or authorization?

A No, it was not.

Q The documents taken at the time of the search of the Church of Scientology of California facilities in 1977, can you give us — do you know roughly the scope of the search that that entailed?

A Do you mean the premises, or what?

Q The scope of the types of documents taken.

A I’m not sure I understand your question. Sorry.

Q My question, really, is are you able to summarize in general what materials were taken in the course of that raid; in other words, were there whole file cabinets of materials taken?

A Oh, yes. They just — the FBI agents simply grabbed out huge file folders of things and took the whole file of materials.

Q And this was from throughout Guardian offices that were located at the Cedars Complex?

A That is correct. And the various — and the Information area, the Information Bureau area; the office of the deputy Guardian U.S. and in their communications offices and other offices.

Q Thank you.

Nothing further.

2832

MR. FLYNN: I have a couple.

MR. LITT: Mr. Harris has some questions.

CROSS-EXAMINATION BY MR. HARRIS:

Q Mrs. Hubbard, the MSH OTC account, was that your personal account?

A No, it wasn’t.

Q Why was it the Mary Sue Hubbard CTC account, if you know?

A The bank wouldn’t permit us to open it in the corporate name alone. It required either my name or my husband’s name.

2833

Q And was there an LRH OTC account as well?

A There was, yes.

Q And during that period of time we are talking about from 1967 to about '68?

A That is correct.

Q When these accounts were open?

A That is correct.

Q And after 1963, was there ever again an LRH OTC account to your knowledge?

A No, there was not.

Q And was there ever an MSH OTC to your account to your knowledge?

A No there never was again.

Q And it was only those accounts in Valencia that had those designations so far as you know?

A Yes.

Q You mentioned that OTC turned over its assets to a trust; is that trust Scientology Endowment Trust?

A It is.

Q And have you seen the trust instrument in respect to Scientology Endowment Trust?

A I have.

Q And are you aware that it is a 501 CC, recognized Internal Revenue Service trust?

A I am aware of that.

MR. HARRIS: I’d like to reserve, Your Honor, because I have the trust instrument but it is on its way down, to mark it later.

2834

THE COURT: All right.

MR. HARRIS: No further questions.

MR. LITT: Can we have a stipulation that what will be produced would have been the trust instrument identified by Mrs. Hubbard?

THE COURT: I am sure you can work out a stipulation that she be deemed to have identified that.

MR. FLYNN: That is not a problem.

REDIRECT EXAMINATION BY MR. FLYNN:

Q Mrs. Hubbard, you are familiar with this trust?

A Yes.

Q Were you involved in setting that up?

A To a certain extent, yes.

Q And you were involved in setting up RRF’s; is that correct?

MR. LITT: Objection; asked and answered, Your Honor. We went through this.

THE COURT: I will sustain the objection.

Q BY MR. FLYNN: Now, Mr. Litt asked you a question about the number of documents that were seized and you gave the number 200,000.

Now the bulk of those documents have remained sealed from the date that they were seized by the Federal Bureau of Investigation; isn’t that correct?

A No, that isn’t correct, not to my knowledge.

Q There were a few thousand documents, perhaps

2835

10- or 15,000 documents of the 200,000 that were unsealed for approximately nine months?

A I don’t know what quantities. I know that they were unsealed for a period of time and then resealed by the judge.

Q And the documents that were unsealed, isn’t it a fact that those are the documents that basically dealt with criminal operations such as Operation Freak Out and not with regard to PC files?

MR. LITT: Your Honor, this operation really has nothing to do — what are we doing now? The point of my examination was simply that Mr. Flynn has taken 10 pages out of several tens of thousands.

THE COURT: What I would conclude, he wants to show that there were perhaps 90 percent of the documents that he couldn’t get access to.

MR. LITT: Then let him testify to that, but what does showing a particular document have to do with establishing that?

THE COURT: I am not sure.

MR. LITT: So it is not relevant.

THE COURT: I haven’t heard any question yet.

Q BY MR. FLYNN: Mrs. Hubbard, you know that only very small portion of the documents were unsealed for nine months; isn’t that correct?

A I don’t know.

Q And the government unsealed the documents that related to Operation Snow White for the most part and the

2836

criminal activities of the Guardian’s office?

MR. HARRIS: Well I will object to that as assuming a fact not in evidence, to wit: That the government did; a judge did.

Q BY MR. FLYNN: A Federal district judge in Washington — let me withdraw the question.

Do you remember signing a 286 page stipulation of evidence?

MR. LITT: Objection; irrelevant.

THE COURT: Well it is preliminary. Overruled.

THE WITNESS: Yes, I do.

Q BY MR. FLYNN: And there were 1,500 exhibit numbers attached to that stipulation of evidence? isn’t that correct?

A I don’t know the number, no. I don’t know.

Q Thousands of pages of exhibits; isn’t that correct?

A It seemed like it was about that thick (indicating). Whether that is thousands –

Q About three or four inches of exhibits?

A Possibly.

Q And isn’t it a fact that what the district judge unsealed of the 200,000 were for the most part documents relating to criminal operations of the Guardian’s office involving the indictment?

A I don’t know.

MR. LITT: Objection; asked and answered.

THE COURT: Well, purportedly or allegedly criminal

2837

operations.

Q BY MR. FLYNN: Allegedly criminal.

A I don’t know. I never saw what he unsealed.

Q And the bulk of the unsealed documents that dealt with private matters such as are set forth in these few that have been introduced, you know that those have never been unsealed; don’t you?

A I think that they were unsealed.

Q Other than the few that we have?

A I don’t know.

Q Well these other 200,000 or whatever number it is pages that have never been unsealed that were seized, do you have any idea what they relate to?

A No I didn’t see all the documents.

Q In fact, the government missed another 600,000 documents under Operation Red Box that was kept in a separate location?

A I don’t know that. I don’t know how you know it either.

Q You have heard of Red Box?

A I heard of Red Box, yes, in connection with this case.

Q And what is Red Box?

A Red Box was where certain people had confidential files within their possession in a briefcase, and if there was going to be any attempt by the government to — to attack the church, they were then to take these documents from their briefcases out with them.

2838

Q BY MR. FLYNN: Now, you indicated that you never authorized nor issued orders to have someone go through PC files; is that correct?

A That is correct.

Q And Guardian Program Order 121669, you already testified that was not for that purpose?

A That is correct.

THE COURT: I am a little confused. You were controller?

THE WITNESS: Yes, sir.

THE COURT: Of the Guardians?

THE WITNESS: Yes, sir.

THE COURT: Worldwide?

THE WITNESS: Yes, sir.

THE COURT: What is the relationship between the Guardians of the United States and the Guardians Worldwide during that period of time?

THE WITNESS: It was that the Guardian’s Office Worldwide, we had sort of like a structure where each separate church had a Guardian’s office. And then each continental area, there was a group of people who helped the local Guardian’s office and helped supervise them generally.

And then at the WW level there was the overall supervision of each one of the continental Guardian’s Offices.

THE COURT: So you were above them and supervised the Guardian’s Office United States?

THE WITNESS: I supervised the Guardian’s Office

2839

Worldwide.

THE COURT: But the Guardian’s Office Worldwide supervised the Guardian’s Office United states; didn’t they?
THE WITNESS: Well, I mean they could. They did.

THE COURT: You were responsible and accountable for their actions; correct?

THE WITNESS: That is correct.

THE COURT: When you promulgated orders or directives or policies, you anticipated that they would be followed; didn’t you?

THE WITNESS: That is correct, Your Honor. Yes.

Q BY MR. FLYNN: Mr. Litt asked you some questions about the number of documents that were coming into your office a week. And you said 100,000 per week?

A Yes.

Q That’s called "traffic" in Scientology?

A That is correct.

Q In order to handle that volume of traffic, you had to create a system; is that correct?

A Yes, I did.

Q In the entire Guardian’s Office the work was based on a system; is that correct?

A An administrative system, yes.

Q With command lines down from the top; is that correct?

A Yes. There were command lines.

Q Do you know whether your husband ordered PC files to be culled?

2840

A I have no direct knowledge of that, but I never saw him or heard him issue any such order.

Q Do you know whether or not in 1981 he issued a dispatch to have Bill Prank’s PC files culled?

A I don’t know that.

Q Do you know whether he issued an order to have the PC files of your daughter’s husband culled?

A I don’t know that.

Q Mrs. Hubbard, in the 1960 — strike that — in the 1970’s did the Guardian’s Office infiltrate or penetrate 126 State, Federal, and private agencies to gain information?

MR. LITT: Objection, Your Honor.

THE COURT: I’ll sustain the objection.

Q BY MR. FLYNN: Referring to exhibit 500-5Z dated April 13, 1967, a letter to "Dear Ron" from "Monica," there are various accounts set forth in Swiss bank accounts; is that correct, Mrs. Hubbard?

A Yes.

Q Scientology Mission account; LRU personal account?

A Uh-huh.

Q LRH blocked AC cover guarantee?

A Uh-huh.

Q LRH trustee account?

A Uh-huh.

Q Another LRH trustee account?

A Uh-huh.

Q At least on this exhibit on that date how much

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money was in the two LRH trustee accounts?

A $325 in the one LRH trustee account and $727 in another LRH trustee account.

Q How much was in his personal account?

A $55,551 in his personal account.

Q How much was in the Scientology Mission account?

A $161,616.

Q Do you have any idea of the number of bank accounts your husband has in various places throughout the world, including Liechtenstein, Switzerland, Luxemburg –

MR. LITT: Objection. Assumes facts not in evidence. If this is Mr. Flynn testifying to the bank accounts, which it appears to be –

THE COURT: I’ll permit her to answer the question. You may answer.

THE WITNESS: To the best of my knowledge, my husband has no Swiss accounts.

I know he has an account or, at least, when I was handling his accounts, he had an account in American, one account.

I’m not certain, but I think there might have been another account in Luxemburg.

MR. FLYNN: Thank you, Mrs. Hubbard.

THE COURT: Anything further, Mr. Litt?

MR. LITT: Yes, Your Honor.

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RECROSS-EXAMINATION BY MR. LITT:

Q Mrs. Hubbard, the Red Box Mr. Flynn asked you about, when did you learn about that?

A I learned about that during a deposition for one of the suits that Mr. — I believe it is one of Mr. Flynn’s associated attorneys suing me on. And it was brought up in my deposition.

Q And you were presented some documents with respect to Red Box?

A That is correct.

Q Was that the first time you had seen those documents?

A That is correct.

Q Did you see these documents — did you see anything about Red Box when it was prepared?

A No, I did not.

Q All right. Now, I asked you a question and the court asked some questions. And I want to make sure that the question I was asking was clear.

If there was any — within the Guardian’s Office anybody did go through pre-clear folders at any time, my question to you is not whether from an organizational perspective you were responsible, but were you aware that that in fact was occurring?

A No, I was not at the time, no.

MR. LITT: Thank you.

THE COURT: Mr. Harris, anything further?

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MR. HARRIS: No, Your Honor.

THE COURT: Mr. Flynn?

MR. FLYNN: Nothing, Your Honor.

THE COURT: You way step down.

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

MR. LITT: We object. It has no relevance whatsoever.

THE COURT: It can be marked.

He showed it to the witness.

That is SSS.

RRR is excerption of Ira H. PC files.

MR. FLYNN: The relevance, Your Honor, is in relationship to Mr. Armstrong’s testimony that there were enemies outside of the organization who were not staff members that the Fair Game Doctrine was applied against.

THE COURT: I guess we can resume, then, with Mr. Armstrong for 10 minutes.

GERALD ARMSTRONG, resumed the stand, having been previously duly sworn, and testified further as follows:

THE COURT: You have already been sworn, sir. Have a seat.

State your name again for the record. You are still under oath.

THE WITNESS: Gerald Armstrong.

THE COURT: You may continue, Mr. Flynn.

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REDIRECT EXAMINATION (Resumed) BY MR. FLYNN:

Q Mr. Armstrong, very quickly, I would like to cover the subject of the mob attacking the ship and the claim of religious persecution that Mr. Harris asked you about.

What was your understanding at the time on board the ship as to why the mob attacked the ship?

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MR. HARRIS: Well as I recall the testimony, Your Honor, the witness said he was in Portugal and was in Lisbon and was called someplace and heard about it, so I take it –

THE COURT: I think you developed some questions about what he heard about it.

MR. HARRIS: All right.

THE COURT: I just want to understand that is his state of mind, what he’s heard about it.

THE WITNESS: I was very familiar with the situation because I had dealt with a rumor which instigated the attack for several months prior to that, and it and it had to do with the local people’s feeling that we were either part of the CIA, connected to the CIA or in some way an intelligence organization. We were continually called the Mystery Ship, and it was not in regard to Scientology but in regard to the local people feeling that we were intelligence or CIA connected.

Q BY MR. FLYNN: And what was your state of mind at that time as to why people felt that you were CIA connected?

A Well I was of two frames of mind, I guess. There was the internal PR which we put out and that was that we were being persecuted and that this whole thing was, in fact, an intelligence operation initiated by the CIA because we had at that time or Scientology had at that time brought a $750 million lawsuit, I believe naming the CIA, but at least naming Kissinger and the defense intelligence agency and perhaps more governmental agencies.

We long inside the organization put out the story that the British and American Consuls, wherever we went,

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were part of the enemy network.

Then there was the reality of what was happening and that was the fact that we were secretive. We were lying to the local people about what we were doing. We brought them on board and toured them through a small part of the ship and kept the rest of it absolutely off limits, and it was obvious to anyone that we were not this world renowned management company because a lot of the people on board were walking around in rags.

We had an RPF operating on board, and it certainly didn’t look like a management company but tended to look more like a prison ship above decks and like a classy intelligence operation at times below decks. So it was little wonder that the locals believed that we were a Mystery Ship.

We would never the questions directly. They knew we were something different from what we were claiming, and it was all of the operations in which we were involved.

During that period I was involved in both legal and public relations activities and dealing at various high levels with the local police, local — the Governor of the island of Madeira, with the British and American officials, so there was a great deal of mistrust generated because of our shore stories and because of the fact that we were operating secretively.

Q And for instance, when people cane on board, was there a practice of turning over pictures of L. Ron Hubbard and items like that?

A Well, yes. There was always a part of the

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ship which was — in which we could call a "Clean Ship Drill. There was a drill called Clean Ship Drill, and it simply would be announced and passed on and immediately the ship would be transformed into something different, so that an official could come on board, we could pass the word "Clean Ship Drill" and any Scientology materials were whisked out of the way. Things would just look completely different.

Q Now, in Morocco, was the organization involved in training Moroccan intelligence?

A Well in 1972 we moved off the ship a number of people who spoke some French, our best French-speaking people and people who could operate an E meter, and there was a program initiated by Mr. Hubbard in 1972 which involved the security checking of Moroccan officials and training Moroccan intelligence in the use of the E meter to be used as a lie detector in detecting enemies of the king and the party then in control in Morocco.

Q And who was that?

A The king?

Q The person in control that the organization dealt with, if you know.

MR. HARRIS: Really, is this within the scope of redirect examination, Your Honor?

THE COURT: Well we only have about three minutes left, so we will explore this. It is interesting anyway.

MR. HARRIS: Indeed.

THE WITNESS: There were a number of contacts that we had into the Moroccan government. One was a Colonel Alam of

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the Moroccan military, and there was a person who worked closely with us. His name was Laedi Liousi. He was a man and he had contacts. He was a member of one of the major families in Morocco and through him and through the contacts that we had in the military and contacts with various lower officials within Morocco, this program was initiated to do the intelligence training.

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Q Now, Laedi Liousi, was that person subsequently executed?

MR. HARRIS: That is by the witness’ personal knowledge and did he know the individual, or is this all state of mind still at this point?

THE COURT: I don’t know what the execution would have to do with it.

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

It has to do with the perceptions of these various governments toward the ship.

Q In any event, in Curacao did the government there find out that you were connected to the Church of Scientology?

A Well, they found out. I don’t know exactly how they found out.

But in order to handle the SIA rumor and the Intelligence Information rumor, we took the lid off the Scientology thing, the shore story at that point, the OTC shore story and began to admit at that point that Scientology was our major client or a major client; thus, connecting us on a public relations and a visual level with Scientology. And the reason for that was to dead agent the CIA rumor on the theory that how could we possibly be connected with the CIA? We are connected with Scientology who we are suing the CIA.

Q What happened?

A In Curacao?

Q When you uncovered that cover, what was the

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result?

A I guess the initial result was we were not kicked out of that court, maintaining the OTC cover.

We had, just prior to that, been kicked out of Barbados; kicked out of Trinidad; not allowed into Jamaica. We had gone to Jamaica once and then we heard we were not allowed back in.

And there was another couple of ports where we got the same; we had the same problem.

Spain, we ran into that problem; Tenerife in the Canary Islands. And I guess there were four or five ports. And it was the CIA rumor which kept cropping up.

Q One last question, Mr. Armstrong: in 1980-198l what was your state of mind as to why these cover stories were necessary on board the Apollo, or had been necessary when you were on board the Apollo?

A Well, what became obvious to me after awhile was that in fact Scientology was not being persecuted at all, but Mr. Hubbard was simply on the run.

THE COURT: We’ll take our recess at this time. We’ll reconvene tomorrow morning at 9:30, hopefully.

(At 4:02 p.m., an adjournment was taken until Wednesday, May 23, 1984; at 9:30 a.m.)