Prior to his death, LRH did an extensive hat turnover that included a corporate sort-out of Scientology organizations and an estate plan in which he transferred his rights in Scientology trademarks and Advanced Technology to the new corporations.
What he created were three controlling corporations: Church of Spiritual Technology (CST), Religious Technology Center (RTC), and Church of Scientology International (CSI) with separation of powers and multiple cross checks and balances.
The most important document of all was personally signed by LRH, namely, a trust in which LRH transferred, upon his death, the great bulk of his assets to CST for the “benefit of the religion of Scientology.” The trademarks and Advanced Technology of Scientology were transferred in separate documents to RTC, which, in turn, licensed (i.e., gave permission to use) CSI and related Scientology organizations.
In the strongest check and balance against RTC, the assignments were “subject to an an option granted by LRH to [CST] to purchase all of the rights assigned to RTC under and pursuant to this Agreement for the sum of One Hundred Dollars ($100.00). This option shall be exercisable by CST at any time if CST decides, in its sole discretion and judgment, that RTC has failed to preserve and maintain the confidentiality, purity and ethical use of the [marks and] Advanced Technology in accordance with the Scientology Scriptures, or that RTC’s ownership of the [marks and] Advanced Technology in any way places the [marks and] Advanced Technology in danger of appropriation by any entity that is outside or hostile to the religion of Scientology, or that RTC has permitted and is permitting use of the [marks and] Advanced Technology in any way that is contrary to the Scientology Scriptures and seriously damages the religion of Scientology.” (Emphasis added; Paragraph 3 of the Assignment(s).)
Notice LRH’s recurrent express references to the religion of Scientology, not to any one of the churches of Scientology. LRH makes the distinction plain in the corporate documents of CST where it states:
“Religion of Scientology” and “Church of Scientology” shall not necessarily be co-terminal. That is to say, the terms “religion of Scientology” and “Church of Scientology” shall be co-terminal only so long as churches of Scientology continue, in the opinion of L. Ron Hubbard during his lifetime, and in the opinion of all of the Directors and Trustees [of CST] following the death of L. Ron Hubbard, to espouse, propagate and practice the religion of Scientology .
The estate plan, therefore, signals a major change in operating basis, transferring the control of Scientology organizations from its founder to a detailed corporate structure with built-in separate of powers and checks and balances; going from a singular ruler to separation of powers with multiple checks and balances, both internally within each corporation and externally in their relationships to each other.
This practice of ultimate control vesting in one person might partly explain why Scientologists, including staff members posted at the higher levels, accepted David Miscavige as a supreme leader – they were used to one person rule.
But LRH did not intend for one person to rule after his death.
To verify this, one only needs to view LRH’s estate plan and, in particular, the option given CST to purchase from RTC the rights to Scientology trademarks and Advanced Technology given it by LRH – for a mere $100 each.
During his life, LRH reserved for himself the option to purchase these rights. But he expressly transferred the option upon his death, not to David Miscavige, not to “Chairman of the Board” RTC, and not to any one person, but to CST, a nonprofit religious corporation with three (3) separate boards and internal checks and balances.
Far from being a dictatorship, the structure is more like the Constitutional government of the United States created by founders who intensely distrusted monarchs.
The problem, however, and hence the need for this website is: the plan was not revealed to or understood by Scientologists. (More on this subject in a later article.)
LRH on Monopolies of Scientology
LRH warned us against allowing a monopoly of Scientology, or a sole proprietorship.
A Monopoly is: 1. exclusive ownership through legal privilege, command of supply, or concerted action; 2. exclusive possession or control.
A Sole Proprietorship is “a business under the complete control of a single individual
Here is what LRH had to say about the subject in a lecture given as part of the Philadelphia Doctorate Course entitled, Formative State of Scientology; Definition of Logic:
“So anybody that knows the remedy of this subject, anybody that knows these techniques, is himself actually under a certain responsibility – that’s to make sure that he doesn’t remain a sole proprietor. That’s all it takes, just don’t remain a sole proprietor. Don’t ever think that a monopoly of this subject is a safe thing to have. It’s not safe. It’s not safe for man; it’s not safe for this universe.”
These words of wisdom are manifested in LRH’s estate plan.
Apart from LRH’s expressed intentions, all affairs of California religious corporations must be exercised by and under the direction of a board of directors (California Corporation Code, section 9210). The IRS and state taxing authority (California’s Franchise Tax Board) can eliminate tax-exempt status if corporate rules and requirements are not satisfied. Internal Revenue Code, section 501(c)(3).
Moreover, the rights of a corporation (to sue, for example) can be eliminated if the nonprofit corporation serves as the alter ego of an individual or it fails to follow corporate formalities (e.g., the boards are mere rubber stamps for one person). Thus, the legal right to sue and protect the trademarks and Advanced Materials – RTC’s reason for existence – is placed in jeopardy due to the existing scene. (See, e.g., Shanghai Automation Instrument Co.,Ltd. v. Kuei (N.D. Cal. 2001) 194 F. Supp. 2d 995, 1001-03). This illustrates the convoluted legal mess created by David Miscavige’s one-man rule.
The solution is simple, if not easy:
● Reconstitute the boards of the three governing corporations;
● Train the directors and trustees of each corporation in their duties;
● Separate the finances, conduct audits, and fix any irregularities found;
● CST boards conduct an independent investigation into how and why LRH’s intentions after his departure were not implemented and determine whether it should exercise its purchase rights from RTC;
● And CSI should conduct its own, separate investigation to determine how and why its hats got knocked off.
ED International, the convening authority for worldwide matters pursuant to Committees of Evidence, Scientology Jurisprudence, Administration Of, HCO PL 7 September 1963, needs to get cleaned up and put back on post or replaced as may be appropriate in the estimation of the CSI board of directors. The cleaned-up or new ED Int then needs to grant a general amnesty and convene a Committee of Evidence on the overall situation with David Miscavige as an interested party.
Already there is a large and growing independent movement, itself an outgrowth of the situation under review, as will be shown in a future article. The trademarks and Advanced Materials are rapidly moving into the public domain, if not already there. LRH intended that they be protected; RTC has failed and is failing to protect them, nor can it effectively pursue legal actions; it has lost its moral stature with a large and growing segment of Scientology public.
We close with a quote from LRH, taken from Vol. 0, HCO PL 22 May 59, Issue III, Central Organization Efficiency:
If I cannot teach you to land on your own two feet on your post, I’ve surely failed You’ve got to be willing to be hanged for mistakes and not tremble for fear of making them. Be right on a majority of decisions, and don’t be wrong on any important ones. But if you are you’ll only be hanged. How come your neck is so precious when mine isn’t?
Yes, it’s important what you decide. Yes, it’s the survival of your area at stake if you’re wrong. But why be timid about it? The whole place will wither and die where you are if you aren’t causative. The man or girl on the post is the one who puts life in it.”
. A “hat” designates particular duties in an organization, a hat turnover is a process of taking steps to ensure that someone else picks up the duties.
. Estate plan: the anticipation and arrangement for the disposal of an estate; wikipedia.org; Estate: the assets and liabilities left by a person at death. Merriam-Webster’s 11 Collegiate Dictionary.
. Trust: a relationship whereby property (including real, tangible and intangible) is managed by one person or persons or organizations for the benefit of another. See: LRH Trust Agreement
. Emphasis added; Amended Trust Agreement, Article One. LRH Trust Agreement
. Co-terminal: a form of coterminus: coextensive in scope or duration. Merriam-Webster’s 11 Collegiate Dictionary. coextensive: being of equal extent or scope or duration. wordnetweb.princeton.edu/perl/webwn.
. Bylaws of CST, Article II, Definition of Terms, subparagraph f. See: CST Bylaws