A.r.s Week in Review - 5/20/2001
Week in Review Volume 6, Issue 5
by Rod Keller [rkeller@...]
Alt.religion.scientology Week in Review summarizes the most significant
postings from the Usenet group Alt.religion.scientology for the preceding
week for the benefit of those who can't follow the group as closely as
they'd like. Out of thousands of postings, I attempt to include news of
significant events, new affidavits, court rulings, new contributors,
whatever. I hope you find it useful. Like many readers of a.r.s, I have a
kill file. So please take into consideration that I may not have seen some
of the most significant postings.
The articles in A.r.s Week in Review are brief summaries of articles
posted to the newsgroup. They include message IDs for the original
articles, and many have a URL to get more information. You may be able to
find the original article, depending on how long your site stores articles
in the newsgroup before expiring them.
Free A.r.s Week in Review subscriptions are available. Subscriptions are
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Week in Review is archived at:
> Chick CoreaThe Boston Globe published an article on Scientology celebrity Chick Corea
on May 20th.
"Soon to be 60, Corea plays 200 concerts a year. His appearances with the
Boston Pops Wednesday and Friday finally provide the opportunity for Corea
to claim a piece of turf near his boyhood home at 149 Chestnut St. Now he
has a 30-concert European solo tour scheduled for late in the year that
will take him to Germany for the first time since 1993, when his practice
of Scientology led to what he describes as a government-inspired boycott
of his music.
"'It was a campaign created by a handful of people in the German
government who scared promoters into not booking me,' Corea says of the
situation. 'It led me to visit D.C. several times, not just to present my
own case but to talk about all of the human rights violations that go on
in so-called civilized countries like Germany and France.'
"According to Corea, the US State Department 'went to bat' on his behalf.
He also lowered his price, allowing promoters to operate without
government subsidy. Scientology remains a large part of Corea's life. He
and his wife, Gayle Moran, moved to Clearwater, Fla., four years ago after
participating in several retreats at the Scientology Center located there.
The affiliation has raised eyebrows for decades, yet Corea insists it has
not inhibited his ability to work in this country.
"'My involvement with Scientology has been nothing but glorious since
1968,' he says. 'Anything this new has always been attacked - not by the
public, but by the press as tools of the government. But this is my own
subjective thing, and being a Scientologist has done nothing but help me
in my life.'"
> ClearwaterMark Bunker and Jeff Jacobsen reported on the opening of a city park in
downtown Clearwater. A Scientology group was responsible for improvements
to the park, but initially declined contributions in honor of Lisa
McPherson, Roxanne Friend and Congressman Leo J. Ryan.
"At this afternoon's grand opening of the brick alley in Downtown
Clearwater, Pam Marks finally answered the question she refused to answer
for the St. Pete Times. The secret committee has been revealed. Pam Marks
today thanked Bennetta Slaughter and AMC for being in charge of placing
the orders for bricks. Pam Marks also applauded the local newspapers for
their supportive coverage, except for the St. Pete Times. She lambasted
the Times and O'Neal in particular for their biased coverage."
"I was on the Cleveland Street entrance with my Lisa McPherson picket
sign. I was there in place of my brick that would have said 'Remember Lisa
McPherson' except the Citizens for a Better Clearwater rejected that brick
as being disharmonious to the community. So I stood near the curb with my
sign and flyers that explained why I was there. I only gave out one flyer.
It was essentially impossible to miss my sign if you were in the park
because there are of course only 2 entrances into the park.
"Antonio the Scientology security guy was all excited and videotaped the
first 45 minutes of me standing there, then just watched the rest of the
time. Paul Kellerhals came over and watched me quite a while, then came
over with a copy of the injunction and claimed I was violating it!
Clearwater police Lt. Hall came over a few minutes later, apparently
called there by Scientology. He talked to me briefly, saw what I was
doing, and told the nearby cops that I was fine.
"After a bit a nice lady came and told me that my brick was now in the
park! Sure enough, it's right at the base of a bench, in a reasonably good
Jeff Jacobsen also spoke at a Clearwater City Council meeting this week.
"I'd like to point out a deception that happened in a city commission
meeting last August 17. Mary DeMoss spoke at the meeting and explained
that she was creating the Foundation for Religious Tolerance here in
Clearwater. She said the goals of the Foundation would be to promote human
rights, unite the local religious groups, bring the city and religions
together, and help forward the goals of the city.
"The most recent Scientology publication called Free Winds has a letter
signed M.D. talking about how this person found her home town had some
SP's in it. 'I began to attack them. My attacks turned into the
Foundation for Religious Tolerance which I founded. This foundation
confronts any critics of Scientology and exposes them for what they really
are - hate groups. Would you like to know how many people comprise this
vast worldwide organization that has the SPs running scared? Just one,
"The Foundation for Religious Tolerance claims to be a wonderful
organization designed by a Scientologist to help unite the Clearwater
community, but in her own words, it is a front group for Scientology to
attack its critics. In that case Ms. DeMoss lied to the commission and the
people of Clearwater last August 17.
"The Citizens for a Better Clearwater rejected a brick order I placed for
the new Alley Park. My brick was to say 'Remember Lisa McPherson.' This
was rejected, said a letter from CBC treasurer Doug Williams, because it
would cause community disharmony. CBC finally relented and my brick is now
in the park, What exactly does this episode say about Citizens for a
> Eagle ScoutThe Los Angeles Times reported on May 19th that an Eagle Scout ceremony
was held at a Scientology location in Hollywood.
"John Steiner, son of Louis Steiner, has earned the rank of Eagle Scout.
He is a member of Glendale Troop 8 and received his award at a ceremony
held at the Church of Scientology in Hollywood. Among those attending the
celebration were his grandmothers, Yvonne Steiner of Maryland and Velma
Ballerini of Washington, D.C.
"For his Eagle Scout service project, he repaired a large section of trail
in the Angeles National Forest. The task was organized by John and
involved more than 570 man hours of work by parents and Scouts."
> Entertainment TonightEntertainment Tonight aired an interview with Scientology celebrities
Jenna Elfman and Kirstie Allie on May 15th.
"Kirstie said 'nothing great on this planet goes unattacked.'"
"Kirstie says about her marriage counselor role on Dharma & Greg: 'No. I'm
a flake. I don't like marriage counselors, so it's fun to play these. I'm
not a big shrink advocate or counselor advocate, so I like playing them
when they're idiots.'
"'You know what, here's the thing. People can attack my religion if they
want, they are showing that they are not very bright. Because if they
actually investigated it, and read one of the books, they would see that
it's very beautiful.'"
> Jesse PrinceThe St. Petersburg Times reported on May 19th that details of
Scientology's PIs working to investigate Jesse Prince have been revealed
during depositions in his marijuana growing case.
"Depositions in the case taken earlier this week show private
investigators hired by Church of Scientology lawyers watched, videotaped
and trailed Prince virtually every day for at least four months, following
him 'almost wherever you can think of in the area,' said Brian Raftery,
the private investigator. Another private investigator involved in the
case said they were looking for 'immoral activities and the possibility of
"The elaborate surveillance effort involved at least three private
investigators, one of whom befriended Prince by using a false name.
Prince's Clearwater attorney, Denis deVlaming, says it's clear the church
wants to intimidate his client and label him a criminal. 'Everything
we've learned about this case was the Church of Scientology was behind it
from the very beginning,' deVlaming said Thursday in court.
"The effort to conduct surveillance on Prince included hiring a black
private investigator named Barry Gaston, Raftery said in his deposition.
Prince also is black. Gaston was hired in February 2000 by another private
investigator, Joseph Fabrizio, who worked for Kobrin's firm.
"The depositions show Fabrizio supplied Gaston with a photograph of Prince
and information about where Prince might show up. Gaston hung out in those
places for weeks before he finally spotted Prince and his girlfriend at
Wilson's Lounge on Belcher Road. As Prince was leaving, he stopped and
introduced himself to Gaston. Gaston introduced himself as 'Rinzy
Trinidad,' a name he made up. Eventually, Prince invited Gaston to his
house, where Gaston saw Prince smoke marijuana, according to Gaston's
> Keith HensonThe Riverside Press-Enterprise reported on May 17th that Keith Henson
failed to appear for a sentencing hearing in Hemet, California. Keith was
convicted of interfering with a religion.
"A man convicted in April of oppressing Scientologists because of their
religion has fled to Canada to apply for political refugee status, the man
said Wednesday. Henson's conviction on a charge of interfering with a
religion stemmed from his picketing at the Church of Scientology's Golden
Era Productions in Gilman Hot Springs.
"Henson said in a phone interview Wednesday night from Canada that he went
there to protest a Scientology event. He then decided he would stay after
talking to an immigration lawyer. Henson said his human rights have been
violated because of a recommended sentence that could put him in jail for
200 days and subject him to five years' probation for a misdemeanor crime.
He said the sentence would be too harsh.
"Riverside County Superior Court Judge Robert Wallerstein issued a no-bail
arrest warrant for Henson. The judge postponed the sentencing until Henson
is arrested and can explain where he has been and why he didn't come to
Gregg Hagglund reported on the possibility of refugee status in Canada.
"Keith Henson today retained the services of Canadian Immigration Lawyer
and Specialist: Mr. Guidy Mamann of Mamann & Associates. Keith Henson is
seeking Refugee Status after having been made a Political Prisoner of
Conscience. Mr. Henson chose to seek refuge in Canada as that nation has
previously criminally convicted corporate Scientology for Breaches of the
Public Trust. Mr. Henson also has extensive personal contacts amongst
consumer and religious activists opposed to Scientology abuses in Canada."
Scientology lawyer Elliot Abelson wrote a letter to the Hemet court,
asking for a stiff sentence for Keith Henson.
"On behalf of the victim, we sincerely urge that Henson, an admitted
explosives expert, be sentenced to a minimum of six months of
incarceration (if not the full one year term) to be followed by probation,
a condition of which to be that for five years thereafter, Henson shall
stay at least 100 yards away from any Scientology church, housing unit
where Scientologists reside, or other facility, and that he be barred from
inducing or encouraging others to ether within that zone.
"Henson is a sociopath, but a very smart one, who has exploited and
misused the legal system for his personal agenda. In my 33 years of
practicing law as both a prosecutor and defense attorney, Henson is one of
the most dangerous criminals I have seen.
"The lessons of Oklahoma City and Columbine fill the press on a daily
basis. In both cases there were early warning signs which went unheeded.
We must not let that happen again as Henson has the expertise to carry out
The Register published an article on the case on May 19th.
"A couple of weeks ago computer engineer Keith Henson was found guilty in
California of a criminal act related to posts he made in the newsgroup
alt.religion.scientology, which contained obviously comical references to
targeting Scientologists with a nuclear missile. The jury convicted him of
interfering with a religion but failed to reach a decision on two other
patently idiotic charges brought by Deputy District Attorney Robert
"Henson's trial has been roundly condemned as a true kangaroo court
affair, with serious irregularities of procedure favoring the prosecution
and excluding the bulk of Henson's evidence, thereby virtually shutting
down the defense. Henson skipped to Canada and set up in Toronto. He's
since retained a local lawyer through whom he filed for political asylum
with the Canadian government.
"Here's a guy who hails from a country that bleats about democracy and
liberty 'til it's blue in the face, lectures the world on human rights
like a scolding nanny at every opportunity, and then convicts a fellow for
exercising his right to criticize, protest and picket against an immensely
well-heeled, and some say, immensely dangerous, cult. 'Democracy' and
'liberty' in the sunny State of California never looked more like the
empty incantations they really are."
> Tom PadgettAn affidavit by Dr. Stephen Kent was posted to a.r.s this week. It is
being submitted in Tom Padgett's legal cases.
"My professional specialization is in the area of alternative religions. I
have worked specifically in this area at the University of Alberta for the
past thirteen years. Scientology is among the groups that I have studied.
I began formal studies of Scientology in 1986, and since then have
published several articles on Scientology and referred to it in still
"In light of my professional publications and my knowledge of Scientology
practices, I am qualified to speak about Scientology's use of the legal
system against perceived opponents as a means of harassment according to
what it used to call the 'fair game' policy. In addition, I can speak
about Scientology's practice of 'disconnection.' In my professional
opinion, Mr. Thomas Padgett has been victimized by Scientologists'
application of 'fair game' and 'disconnection policies.
"A crucial document for understanding Scientology's harassing legal
strategy is the Hubbard Communications Office Policy Letter 'Suppressive
Acts, Suppression of Scientology and Scientologists, The Fair Game Law.'
According to Scientology policy, Mr. Padgett is a 'suppressive person.'
The definition given in a Scientology Policy Letter of this term is: 'A
SUPPRESSIVE PERSON or GROUP is one that actively seeks to suppress or
damage Scientology or a Scientologist by Suppressive Acts.'
"Several of the acts that Hubbard specified were such that Scientology
leaders would see Mr. Padgett as a suppressive person committing
suppressive acts. Suppressive Acts include: 'reporting or threatening to
report Scientology or Scientologists to civil authorities in an effort to
suppress Scientology or Scientologists from practicing standard
Scientology;' and 'engaging in malicious rumour-mongering to destroy the
authority or repute of higher officers or the leading names of
Scientology;' and 'delivering up the person of a Scientologist without
defense or protest to the demands of civil or criminal law.'
"Consequently, Mr. Padgett is a 'Suppressive Person' and therefore also is
a 'fair game' target. Indeed, in an October 28, 1999 affidavit by Mr.
Padgett filed in Commonwealth of Kentucky vs. Thomas, he stated that he
learned from the Nashville, Tennessee Scientology Celebrity Center that
the Scientology organization had in fact declared him to be a suppressive
"An L. Ron Hubbard article is entitled, 'The Scientologist: A Manual on
the Dissemination of Material.' This item is required reading in the 1991
'Department of Special Affairs, Investigations Officer, Full Hat' course.
The paragraph instructing Scientologists to defend only by attacking, even
in a court of law, outlines the behaviour that I believe explains many of
the current legal and social situations burdening of Mr. Padgett. It
states: 'The DEFENSE of anything is UNTENABLE. The only way to defend
anything is to ATTACK, and if you ever forget that, then you will lose
every battle you are ever engaged in, whether it is in terms of personal
conversation, public debate, or a court of law. NEVER BE INTERESTED IN
CHARGES. DO, yourself, much MORE CHARGING, and you will WIN. Don't ever
let them have any other thought than that Scientology takes all of its
objectives. The law can be used very easily to harass, and enough
harassment on somebody who is simply on the thin edge anyway, well knowing
that he is not authorized, will be generally sufficient to cause his
professional decease. If possible, ruin him utterly.
"Much of the harassment that Mr. Padgett has endured while engaged in
legal actions with his former wife, Laura Vannoy Padgett, has been
committed by anonymous perpetrators. In the police report filed after Mr.
Padgett found that items inside his garage had been vandalized, the
officer stated, 'written on the newspaper sheet in print were the words,
'SHUT THE FUCK UP'.' The underlined letters, 'SP' are the same as
'suppressive person,' which has very definite meaning in Scientology.
"Mr. Padgett's designation as a suppressive person has important
implications for the manner in which Scientologists would view his contact
with his the children. Again according to Scientology's definitions, these
children would become 'potential trouble sources' because of their
extended contact with their father. As Scientology defines the term, a
'Potential Trouble Source' is '[a] person who is in some way connected to
and being adversely affected by a suppressive person. He is called a
potential trouble source because he can be a lot of trouble to himself and
"Mr. Padgett has every reason to believe that his ex-wife is attempting to
minimize if not prevent him from having contact with his children. In
essence, the children would become 'potential trouble sources' from that
contact, which in turn would cause problems for the mother in her
Scientology activities. Indeed, the current situation regarding his
children - in which his former wife has sole custody and Mr. Padgett has
restricted visitation - amounts, functionally, to being 'disconnected'
from his children. Likewise, Mr. Padgett has reason to fear that his
former wife might be attempting to turn their children against him."
> Dianetics DayA report from a Scientologist who attended the May 12th Dianetics Day
celebration in Toronto was posted this week by Gregg Hagglund.
"Doors finally opened at about 7:30, half an hour late, and ushers from
Toronto Org showed us to seats, before a screen which was showing a video
about 'The Auditors' and how really great they are, and how they are the
only ones who are going to be able save the world, and a large poster of
Ron Hubbard, just off to one side.
"The main video started after about 15 minutes, and dealt with the history
of 51 years of Dianetics. 'One Man, One Dream' was a recurring theme, and
great emphasis was being put on how many new groups in many countries were
now taking up Dianetics study, and who in those countries was endorsing
these studies, (military officers, politicians, and so on) and how there
are groups in such places as Vietnam, Bosnia, the old Soviet Union, and
several African Countries.
"Mostly it was boring, with middle-age males and teen or early 20's girls
all pushing the latest volumes of the books and courses. A lot of the
older crowd seemed to be staff, or their kids, and I figure there were
about 200 in attendance during the video. During the refreshments after,
there were about 50 staff and perhaps a dozen others who lined up for the
piece of cake and coffee, and more hard sell on the 'package deal' 30% off
on course materials and FREE advanced training related to it."
> Protest SummaryKeith Henson reported a protest at a Toronto hotel this week.
"We went to downtown Toronto to picket the Colony Hotel where a dianetics
meeting was being held. Jacky Matz, who ran the spy ring and was convicted
to two counts of breach of the public trust, was waiting outside. Gregg
said hi to her and introduced me. Her face fell and she split inside no
doubt to make a panic call to Hemet.
"We had 6 people, so we put a group on both the front and back door.
They put Andy Hill on me. He asked a few questions and I gave him the
concentrated lecture ranging over how I was brought into the battle, the
long list of criminal activities by scientology that keeps us in the fight
and a range of other topics, particularly the evolved psychological
mechanisms scientology and other cults use to get people hooked and keep
them. He was polite and attentive. Then they assigned Brian McPherson to
me. He too was attentive as I went over much the same subjects I had with
"At one point they were triple teaming against Gregg with Gwen Jones
(Velcro Kitty), Bob Hill, and Dan Bryenton. Dan was highly agitated, near
to violence, yelling, bumping into Gregg, threatening to have Gregg
arrested if he ever went near Dan's house.
"We decided to call it a picket about 7:45 and walked around back to
collect the rest of the crew. When we got around there, there were more of
the OSA Goon Squad mixed in with our people. So Gregg and I brought all of
them up on the latest news about Reed Slatkin. A little after 8 pm the
rest of the handlers came hunting for their missing people. There were
all together 6 SPs and 10 handlers involved in this picket."
Keith Henson and Gregg Hagglund reported a protest at the Toronto Org on
"Gregg and I put in a substantial picket. We had the first half hour by
ourselves, out in front of the org doing a good business in handing our
flyers, After that we got our regular 'handlers,' Brian McPherson and
Daffy Dan. At one point when Brian was inside I went over to Dan and
tried to get up close to him the way he and Gregg were always doing. No
reaction, the guy just moved back. Gregg thinks Dan is nearly out of
control, but I tend to think he is just playing a silly emotional game."
"The Dianetics bookstore has now been completely expanded into the old
restaurant. This means they have twice as much absolutely empty space. The
front lobby entrance of the Org had boxes piled up from Golden Era. The
boxes were the size and type for standard flyers and such. Several of the
boxes were clearly labeled 'SOS Letter Stuffers.' They were labeled as
3000 per box and there were at least 10 boxes.
"Briney spent the next hour walking and talking with Keith. Again Briney.
who admits he reads ARS, displayed no fear of Keith, even laughing at the
idea Keith might be carrying an ICBM. Dirty Dan showed up about 35
minutes after we started. He wasn't very happy being called in from his
job. He tried to be intimidating, but since he didn't have his fellow
thugs for support he was a little less bold. Dan tried a few times to get
physically close to me to use his cigarette, hostile demeanor and
sickening body odor as a weapon. I kept him at arms length by using my
sign to block his approach. Keith and I called it quits after about one
> The ProfitPatricia Greenway reported this week from the Cannes Film Festival, where
The Profit is being screened to invitees.
"There are 4000 members of the press here in Cannes and the fact that
Scientology has tried so hard to stop the film, we are getting far more
'hard news' coverage than any new film at the festival. Most of the press
that we've talked to are appalled at the lengths to which Scientology has
gone in their efforts to condemn and suppress both the production and the
release of this movie.
"German TV, ZDF did quite an interesting piece on Peter and The Profit
while capturing Peter's tail on film. Then on Saturday, Le Figaro, one of
the largest nationwide newspapers in France did a great article on the
film and Scn's attempts to stop it. By Sunday, Europe 1, a nationwide
radio show ran a great interview with Peter after attending the first
screening of 'The Profit'.
"Sunday night, Scn showed its desperation by sending in an investigator to
our hotel to forge Peter's signature and steal a delivery of trailer
videos that had been sent from our office in the States. Both the Cannes
police and the Security for the Cannes Film Festival informed us that they
were very familiar with OSA and were more than interested in pursuing our
complaint. This morning, Radio Monte Carlo, the biggest English speaking
station in the area was at our hotel for a full report on the theft.
"Today I spent an hour with the good Reverend Jesse Jackson, explaining
the cult of Scn and discussing ad nauseum the faith based initiatives
(which he opposes). Rev. Jackson invited me to a screening of the
documentary that he's involved with here and good ideas were exchanged."
"Tonight on French national TV Channel 3, they will be doing a short piece
on THE PROFIT and the attempts by Scn to stop the film. A reporter from
Reuters who interviewed me said The Profit was the only film at Cannes
getting this much 'hard news' coverage. The Chief of Police in Cannes is
handling our case personally. Our hotel's security system picked up the
entire crime so they have provided a bunch of pictures to the police.
"We've received calls from a fake distributor, an American using the name
Mike Silverman called on our European cell phone and said he was a film
distributor from Dallas, Texas with a company named Omni-view. Of course
the company doesn't exist. We'd already anticipated Scn's plans to buy
the film rights in order to shelve it."
> RussiaThe Associated Press reported on May 18th that a Russian court has
dismissed an attempt by prosecutors to shut down Scientology in Moscow.
"Prosecutors had accused the Humanitarian Hubbard Center of tax evasion
and conducting illegal business activities, the Interfax news agency
reported. Moscow's northeastern circuit court upheld a Tuesday ruling
rejecting the charges against the group, it said. Prosecutors moved
against the Hubbard Center in 1999 because names that appeared on
registration documents were found to have no relation to the center. The
center said it corrected the documents."
> Reed SlatkinThe Los Angeles Times reported on May 14th that the investigation is
continuing into alleged fraud by Scientologist Reed Slatkin against a
group of investors that included many other Scientologists.
"The Hollywood insiders, Internet entrepreneurs and just plain folks who
turned to Slatkin for help with their investments now are trying to find
out what happened to the hundreds of millions of dollars they entrusted to
a man who wasn't even a registered investment advisor. The 52-year-old
Slatkin, a co-founder of Internet provider EarthLink and a Santa Barbara
socialite, is under investigation by the Securities and Exchange
Commission for investment fraud. He also faces lawsuits by investors and
filed for Chapter 11 bankruptcy two weeks ago.
"Federal investigators raided his office Friday, but have been able to
locate only a fraction of the money Slatkin controlled, and investors'
claims eventually could surpass $600 million, officials say. Indeed,
government investigators say the collapse of his investment empire may be
one of the largest Ponzi schemes they've ever encountered.
"These friends say Slatkin didn't start out to become an investment guru.
Instead, his first passion was the Church of Scientology. In a deposition
given to the SEC in January 2000, Slatkin traced his interest in
Scientology to his father's death when Slatkin was 14. An uncle introduced
Slatkin and his Detroit family to the religion's tenets, and Slatkin's
growing interest took him to England, where he spent two summers during
high school studying at Scientology founder L. Ron Hubbard's institute in
Sussex. Slatkin came to Los Angeles in 1974 and worked at Scientology's
Celebrity Centre and became an ordained minister of the church.
"Long hours and low pay eventually took their toll, Slatkin told the SEC.
In 1983, he began learning from another Scientologist about how to make
money in the stock market. By 1985, he was investing for a small group of
fellow Scientologists, describing his work as an extension of his
'church-related efforts' to help ensure others' financial stability.
Investors said they were told their money would be pooled with other
investor funds to buy stocks, according to SEC documents.
"Slatkin's big break as a venture capitalist came in 1994, when he was
approached by fellow Scientologist Kevin O'Donnell, whose son had gone to
school with a young man named Sky Dayton. Dayton, then 22, wanted to start
a business that would make it easier to get on the Internet. The company
they founded, EarthLink Networks, would go on to become one of the
nation's three largest Internet service providers. By February 2000,
Slatkin's stake in the company would be worth more than $122 million.
fund-raising events, investors' attorneys say.
"Slatkin's reach extended into Hollywood, thanks to his Scientology
connections and to O'Donnell's investment in 1999 in Beacon
Communications, a film production company headed by Armyan Bernstein.
Beacon made the Harrison Ford thriller 'Air Force One,' as well as
Costner's 'For Love of the Game' and the Schwarzenegger vehicle 'End of
"Among the investors Slatkin named to the SEC were Jeffrey Tambor, who
most recently portrayed the mayor of Whoville in 'Dr. Seuss' How the
Grinch Stole Christmas'; actor Giovanni Ribisi, whose movies include
'Boiler Room' and 'Saving Private Ryan'; and several producers."
From the New York Post on May 15th:
"Talk about getting audited. Earthlink co-founder, Hollywood money
manager and top Scientologist Reed Slatkin, was hit with a SEC lawsuit
Friday which charged that he operated a $230 million Ponzi scheme. The
civil lawsuit alleges that Slatkin committed fraud while acting as an
unregistered investment adviser. At the same time, FBI and IRS agents
raided Slatkin's offices looking for the money.
"He is alleged to have used some of the money to pay his country club
fees, credit card bills and pool maintenance. The SEC, which won a court
order to freeze his assets, says Slatkin had just $30 million in his
brokerage accounts. Others who invested with the ordained minster of the
Church of Scientology were Earthlink Chairman Sky Dayton and CEO Garry
From the SEC litigation release on May 11th:
"The Commission's complaint alleges that in February 2001, Slatkin
misappropriated $10 million in client funds that he had received
purportedly to invest in a money market fund and misused the client's
funds by using $6.975 million to pay other clients and using over $24,000
to pay personal expenses, including credit card bills, telephone and other
utility bills, fees at two country clubs, and pool maintenance fees. The
Commission further alleges that the Swiss trading accounts do not exist
and that Slatkin was merely operating a fraudulent securities scheme.
"The Commission's complaint alleges that Slatkin violated and is
continuing to violate the antifraud provisions of the Securities Act of
1933, Securities Exchange Act of 1934, the Investment Advisers Act of 1940
and the Investment Advisers Act. In addition to the temporary restraining
order and asset freeze, the court ordered Slatkin to not destroy documents
and to produce an accounting. The Commission is also seeking a preliminary
injunction, a permanent injunction, disgorgement, and civil penalties."
A trustee has been named in the case to prevent any more money from
disappearing from Slatkin's accounts. From the Los Angeles Times on May
"In a move to preserve what's left of Reed E. Slatkin's crumbling
financial empire, a U.S. Bankruptcy Court judge Wednesday named veteran
forensic accountant and former FBI agent R. Todd Neilson as trustee for
Slatkin's Chapter 11 case. Regulators and investors had pressed for the
emergency appointment after the FBI and Internal Revenue Service raided
Slatkin's offices and the Securities and Exchange Commission obtained a
court order freezing his assets Friday. Investor attorney Richard Wynne
said the appointment of a trustee was needed to ensure that Slatkin, a
co-founder of EarthLink Inc., did not regain control of his assets. 'We
frankly do not trust Mr. Slatkin,' Wynne, attorney for the creditors'
committee that represents investors, told Bankruptcy Judge Robin Riblet.
'There's $300 million to $600 million that's missing that cannot be
"Among the investors listed in SEC documents are CNN legal commentator
Greta Van Susteren and her husband, attorney John Coale; actors Giovanni
Ribisi, Mariah O'Brien-Ribisi and Jeffrey Tambor; former Capitol Records
chief Hale Milgrim; and Oscar-nominated songwriter Tom Snow, whose
compositions include the Pointer Sisters' hit 'He's So Shy' and 'Let's
Hear It for the Boy' from the movie 'Footloose.'
"Slatkin's bankruptcy attorney, Richard Pachulski, asked Riblet to convert
Slatkin's Chapter 11 filing to a Chapter 7 liquidation, a move Riblet
initially approved Wednesday before the hearing.
"A Chapter 7 filing requires the appointment of a trustee but makes it
more difficult for creditors to have a voice in the liquidation process,
bankruptcy attorneys said."
> U.S. Trade RepresentativeThe Federal Register on May 7th published a report by the U.S. Trade
Representative on discrimination in foreign government purchasing
"A long-standing objective of U.S. trade policy has been to open
opportunities for U.S. suppliers to compete on a level playing field for
foreign government contracts. The WTO estimates that the United States
and the 26 other GPA Parties provide their suppliers with
non-discriminatory access to government tendering procedures worth more
that $300 billion annually.
"Germany - 'Sect Filters': In September 1998, the German Ministry of
Economics promulgated a 'protection clause' (commonly referred to as a
'sect filter') meant to be incorporated into government contracts for
certain training and consultation services. Among other elements, the
clause would have prohibited firms from bidding on German government
contracts if they have employees that attend or participate in Scientology
seminars. Following the promulgation of this 'protection clause,' the
United States expressed concern in bilateral consultations and in the 2000
Title VII report about the clause's potentially discriminatory effects on
government procurement. In subsequent consultations with German government
and industry representatives, the Administration urged Germany to rescind
the sect filter requirements.
"In response, the German government has revised its 'protection clause' in
a manner that no longer prohibits firms from competing for government
contracts on the basis of the affiliation of its management or employees
with the Church of Scientology. This decision represents significant
progress in addressing U.S. concerns relating to the use of 'sect
filters.' The Administration will continue to monitor the implementation
of the revised policy to ensure that U.S. firms and workers are not
discriminated against in procurement by German Federal and sub-Federal