Affidavit of Gerry Armstrong

MCCS Litigation

I, Gerry Armstrong, hereby swear under the pains and penalties of perjury as follows:

1) I have personal knowledge of the following facts:

2) I was a member of the Sea Organization of Scientology from February 1971 to December 1981, during which time I held many positions and was in many locations where I directly observed L. Ron Hubbard and other Scientology executives. At no time did I ever get the impression that Mr. Hubbard or any other senior executive considered that Scientology is a religion. What I knew to be a fact throughout all the time I spent in Scientology, and what was


expressed to me as policy by other Sea Org members, was that Scientology operated totally as a business, and its efforts to be recognized as a "religion" were only to evade taxation and government regulations.

3) In January 1980, I was assigned to a project to collect materials about L. Ron Hubbard for the purpose of providing documentation for a biography to be written by Omar V. Garrison. During the following two years I read several thousand pages of documentation, much of it written by Mr. Hubbard himself. Never before had anyone within Scientlogy ever had all this information assembled in one place or had the opportunity to view and assimilate the whole truth about L. Ron Hubbard. From these documents and other sources I learned that Mr. Hubbard had continually misrepesented himself and had lied about his past, his accomplishments and credentials. I learned also from the documents I collected that Mr. Hubbard had lied about how and why Scientology had been established as a "religion". In a despatch he wrote in early 1980 to the people in charge of the projects he had ordered to remedy his legal problems with the IRS and various damage claim cases, he stated that the creation of Scientology as a "religion" was not his idea but had come about when the membership of Scientology in the early 1950's, unbeknownst to him, had voted to form a "church". I personally saw and read that despatch. Mr. Hubbard's


statement is a lie. In a letter to the head of Scientology in the US in early 1953, Mr. Hubbard stated:

"We don't want a clinic. We want one in operation but not in name. Perhaps we could call it a Spiritual Guidance Center. Think up its name, will you. And we could put in nice desks and our boys in neat blue with diplomas on the walls and 1. knock psychotherapy into history and 2. make enough money to shine up my operating scope and 3. keep the HAS solvent. It is a problem in practical business.

"I await your reaction on the religion angle. In my opinion, we couldn't get worse public opinion than we have had or have less customers with what we've got to sell. A religious charter would be necessary in Pennsylvania or NJ to make it stick. But I sure could make it stick. We're treating the present time beingness, psychotherapy treats the past and the brain. And brother, that's religion, not mental science."

I found a great deal of similar evidence in the materials I assembled before I left Scientology. Mr. Hubbard's life has been a continuing pattern, since the early 1940's, of fraudulent business practices, tax evasion, flight from creditors and those seeking recompense, and then going into


hiding, outside the reach of wronged individuals and legal jurisdictions. In short, it is the life of a con man.

4) In early 1980 I was also assigned to a mission, the purpose of which was to work out legal strategies, and get them implemented, which would allow Mr. Hubbard to still control all of Scientology via his Commodore's Messenger Organization while being shielded from any lawsuits or legal involvements and responsibilities. One of the main problems which had to be resolved by this mission, and one of the arguments used in various court cases as proof that Scientology was not a religion, was the fact that Scientlogy was set up so that funds inured to the benefit of L. Ron Hubbard. For years Mr. Hubbard had had his legal representatives claim that he was not paid by Scientology, other than a $35,000.00 annual consultant's fee, and royalties from sales of his books. Another claim was that he did not control Scientology monies. The fact is he had absolute control of all Scientology accounts. As late as 1980 I saw a despatch from him in which he ordered that unlimited Scientology funds were approved for a project to get him a Nobel Prize. Another fact is that he received millions of Scientology dollars directly from a foreign corporation called Religious Research Foundation. Payments for auditing or courses at Flag by non-US Scientologists went into RRF accounts which Mr. Hubbard controlled absolutely and used


totally for his own purposes.

5) I have personal knowledge of policies of the Church of Scientology relating to the following facts, or I have had possession of documents and tapes relating to the following facts:

6) On or about September 28, 1980, a meeting took place in the Cedars Complex at Los Angeles, California, one of the corporate headquarters of the Church of Scientology of California, (CSC). The meeting was attended by Charles Parselle, (C.P.), Deputy Guardian for Legal, (DGL), at WW, who was in charge of all legal activities for Scientology throughout the world and Laurel Sullivan, (L.S.), the personal representative of L. Ron Hubbard, a long term senior executive of Scientology and then In Charge, I/C, of a special legal Mission, (MCCS), which mission was seeking to conceal Hubbard's control of Scientology and develop strategies to effectuate actual control by Mr. Hubbard without incurring legal responsiblity. Dick Sullivan, a junior executive of the MCCS mission, pursuant to orders, tape recorded the meeting. The individuals in attendance at this meeting are knowledgeable of the fact that Mr. Hubbard has always controlled all aspects of CSC including its bank accounts, policies, etc.


7) At the meeting, the following exchange took place relating to the corporate structure of the Organization and Mr. Hubbard's position in the structure. This exchange was tape recorded with the knowledge and assent of all present:

L. S. "There is no need for them to be the actual Board of Directors.

C.P. "There's no need at all for them to be the Board of Directors in order for them to run the Church, but the authority of the Church has to lie somewhere, and on some basis. And since the Church has always chosen a corporate entity, eventually the authority is going to have to vest with the Board of Directors. The only reason it's worked so long without that occurring is because everyone has effectively been bound by the authority of LRH and have ignored corporate lines."

8) It was common knowledge among senior executives of CSC that Mr. Hubbard had absolute control of all large corporate bank accounts and that he, alone, had the authority to order withdrawal of very large amounts from these accounts. He controlled these accounts through various people, mainly CMO members. Neither the "Directors" of CSC nor any other CSC executives had such authority or control. This policy was practiced throughout the period of at least 1970 to when I left the Organization in December, 1981.

9) Mr. Hubbard received millions of dollars through a dummy corporation (R.R.F.), specifically set up to funnel money to him


which should have been paid to CSC by foreign customers paying for "Flag" services. "Flag" is part of CSC. At a strategy meeting on September 29,1980, held by several high ranking senior executives of the Church, the purpose of which was to develop legal strategies to shield Mr. Hubbard but funnel corporate money to him, the following exchange took place. This exchange was tape recorded with the knowledge of all present. The following people were some of those present:

a. Charles Parsell, Deputy Gardian Legal World Wide, (CP)

b. Alan Wertheimer, attorney for L. Ron Hubbard working with Laurel Sullivan and the MCCS Mission, (AW)

c. Laurel Sullivan, L. Ron Hubbard's Personal Representative and I/C of MCCS, (LS)

d. Dick Sullivan, husband of Laurel Sullivan and a junior executive on the MCCS Mission, (DS)

The exchange was as follows:

CP: "Right. That's a very helpful exercise. And also I may say this, that it is very very helpful for LRH to have his own attorneys, i.e. yourselves, because for many years we have been missing this essential service and we have done this exercise of trying to think of the way it would be on the one side and trying to think of the way it would be on the other side and it really doesn't work very well to do that. It doesn't work to represent both parties at the same time. Especially if you also happen to be a Scientologist and involved in that particuar way as well. So, I'm with relief representing the Church interest and I certainly invite you to represent Ron's interest as much as you can. I say that RRF, which is as far as I am concerned part of the Church, made a mistake when it paid over that 2.1 million. RRF had nothing ... We could say that RRF and CSC are part of the same Church, even through they are corporately different. I mean if anything was a sham corporation, it's RRF.


AW: "As I understand it, RRF receives monies that would otherwise be due the California Church for services rendered by the California Church to people outside of the country who decide to pay the Church from outside the country.

CP: "That's right.

AW: "So that's basically right?

CP: "That's right. Foreign - non-US Scientologists who wish to pay for Flag services pay RRF and then go to Flag and take the services. RRF was originally supposed to hold the money until the service was rendered and then pay it to CSC. But in fact, it has not really done that and so CSC has rendered much service to may foreign Scientologists and RRF has got the money. Fortunately for us, RRF wasn't incorporated until 1973 and we are now litigating 1972. So, I haven't really tried to sort this one out but it obviously is the classic case (loud laugh) of inurement, if not fraud.

(Several laughs)

LS: "Well put.

Speaker Unidentified: "It's all privileged.

DS: "The tape recorder is going here, Charles

CP: "However, as you can see, our finanical direction is really weighted to this solution and it is an ongoing battle which I will eventually win because I am the one who has to litigate the case next year and we obviously have to handle RRF. The way we will probably handle it is by simply saying it is party of the same Church, in fact. Now that, of course, goes directly contrary to what you're doing which is to split LRH off from the Church and to talk about the corporate intergrity of the different Churches. Unfortunately, the Churches do not have any corporate integrity. And our efforts to give them corporate integrity have not hitherto been successful. Now when you talk around a table like this and there is no Internal Revenue agent present, (whispered: I hope so), bugged or otherwise, one can work out solutions. But when you are a few weeks away from a trial and everything you say is going to be rammed down your throat, then you have to start looking at what actually happened. And it's very difficult to assign significances to things other than what was actually being done



at the time. We are trying to say for example that Flag in 1970 is a part of California Church which is probably true but there is no documentation to say that and the truth of the matter is that Marty Greenburg, the accountant, decided to include Flag's accounts in California accounts some years later for convenience. So the decision, what is - the IRS can say and are in fact alleging that Flag in those years, 1970 - 1972, was an unincorporated association to which CSC's income inured on a grand scale. We cannot point to a document which says, 'Actually Flag was part of CSC during the years of question' because it doesn't exist because no one really thought of it. So, we have to have a different theory of the case, which is going to account for all facts and omitted facts which do exist.

Speaker Unidentified: "Is this the why of efforts to create corporate integrity in 1980?"

10) It is common knowledge among senior executives of the Organization and it is the policy of CSC that Members of the Boards of Directors of the various Scientology corporations are mere figureheads, without authority or control, not for internal corporate reasons, but rather to vest control in Mr. Hubbard. I have personal knowledge that in order to carry out this corporate fraud, Organization executives have engaged in various unethical practices including backdating phony Board Minutes and forging signatures.

11) I learned through my study of the documentation I assembled, and from more than ten years of observation of Mr. Hubbard and the Scientology movement, that Mr. Hubbard has cruelly deceived his followers to the point where they will themselves lie and attempt to deceive others about the truth


concerning him and Scientology. Scientology spokesmen and witnesses have stated that Mr. Hubbard doesn't control the organizations. The fact is he has absolute control, including financial control, and Scientolgists know it. Between 1978 and 1980 I participated, along with at least 250 other Scientolgists, in several massive operations to destroy or hide the evidences of Mr. Hubbard's control. Scientology spokesmen and witnesses have claimed that throughout 1980 and 1981 Mr. Hubbard could not be reached through the organization, or that organization executives did not know where he was. The fact is, the most senior executives were in continual communication with him throughout this period. Scientology spokesmen and witnesses have gone to great lengths to "prove" that Scientology is a valid religion, while knowing that it was simply a behavior therapy masquerading as a "church," and making a mockery of actual honest religious practices. In 1980, Watchdog Committee, the senior CMO body, responsible only to Mr. Hubbard and senior to every Scientology organization, ordered that every Sea Org member


had to complete the Minister's Course in two weeks or they would be assigned to the RPF. The reason given was to make every Sea Org member a "minister of the church of Scientology" and so avoid the US Selective Service draft then pending. What most Scientologists, and especially Sea Org members, don't know is that Mr. Hubbard had duped them. My knowledge, based on documentation and observation, is that the major reason for Mr. Hubbard's calling Scientology a "religion", in addition to tax evasion, is to hide behind Constitutional guarantees for religions and so carry out his scheme of mind control to keep his followers duped. He has systematically and knowingly lied to and defrauded his followers, kept them from finding out the truth or becoming free with cruel and bizarre treatment, as for example with the RPF, and kept them economically and mentally suppressed, while he made millions of dollars from their labor.

12) I am personally aware that Mr. Hubbard's policy of Fair Game is still a practice of Scientology. Since I left the organization with my wife in December 1981, I have been declared an enemy, and I believe my life and my wife's life, are in danger.

Signed under the pains and penalties of perjury this 26th day of July, 1982.