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HOLLYWOOD LANDMARK: The plush Celebrity Centre in Hollywood is a retreat for Scientology’s movie star parishoners. Inside are luxury accommodations, auditing rooms and the 3-star Renaissance restaurant, which is open to the public.

© St. Petersburg Times, published October 25, 1998

Sf all Scientology’s conflicts, none is more bitter than its 40-year battle with the IRS.

For years, the IRS had denied the Church of Scientology a tax exemption, saying it was a commercial enterprise. The church appealed, spending millions on lawyers.

As tensions mounted in the months after the Guardian’s Office was disbanded, the IRS launched a criminal investigation of Scientology that focused on Miscavige.

“He was always on the defensive,” said Washington lawyer Gerald Feffer, who has represented the church in IRS matters since 1984. “He lived in an environment where people (federal investigators) were trying to destroy his family, himself and his church.”

Miscavige said he was targeted by IRS agents in Los Angeles who blamed him for Guardian’s Office crimes. He said the government’s main witnesses against him were spurned Guardian staffers.

The IRS would not confirm the investigation, much less discuss it. But Feffer said it was never acted upon by the Justice Department and dropped in 1985. Some time later, Feffer said, he approached the IRS about Scientology’s tax exemption and was rebuffed.

Main story: page one |page 2 | page 3 | page 4

David Miscavige Speaks
In six hours of interviews, Miscavige discussed and defended the organization he has led since age 26.

A place called ‘gold’
Nowhere is Scientology’s trademark self-sufficiency more clearly in evidence than at its $50-million outpost in the arid hills 90 miles east of Los Angeles.

The cornerstones
Images and exhibits of Scientology.

Amid Scientology’s IRS troubles, Hubbard died in 1986 while still in seclusion. Later that year, Miscavige rose to the position he holds today after removing a church executive who, he said, was re-hiring ousted Guardian staffers.

Hostilities escalated in the late 1980s when the IRS began to audit the income tax returns of thousands of Scientologists. Scientology responded with lawsuits and massive records requests, seeking to document IRS discrimination. It also investigated IRS employees and published scathing reports of the agency in the Scientology magazine, Freedom.

At the height of the war in the late 1980s and early 1990s, the church was spending about $1.5-million a month in legal fees, largely to fight the IRS.

The church’s lawyers said they tried for years to work through IRS channels, and that Miscavige kept pushing for a direct meeting, going right to the top.

It became an inside joke, until one day in Washington in 1991 Miscavige and Rathbun told their lawyers they were headed to see IRS Commissioner Fred Goldberg.

“He does get you out of the mindset of you have to do things in traditional ways,” Feffer said of Miscavige. “He had an unwillingness to accept there was no way to solve the problem.”

Miscavige didn’t see Goldberg that day, but the impromptu visit got him a later meeting and a two-year review process.

The IRS had hundreds of questions. Scientology found itself having to explain such Hubbard directives as “make more money” and “make other people produce so as to make money.”

The church argued that the IRS had taken those statements out of context -- that Hubbard’s remarks were directed only at the finance and treasury divisions, which constituted 4 percent of the staff.

Goldberg, the IRS commissioner, did not return telephone calls to his Washington law office.

Seven days after the exemption was approved, 10,000 Scientologists were summoned to the Los Angeles Sports Arena for what they were told was a big announcement. Miscavige took the podium in a black tuxedo as two olympic-size torches burned behind him. He held the audience in suspense for much of his 2 1/2-hour speech, before proclaiming: “The war is over!”

The ovation lasted more than 10 minutes.

Although peace was at hand, Miscavige used the occasion to recount the entire war, tracing its origins to a conspiracy by psychiatrists. He called them “pea-brained psych-indoctrinated mental midgets” who once plotted with the government to make a “slave society.”

He referred to IRS officials as “vampires” and gave a litany of their sins against Scientology.

And he railed against those who “deliberately tried to stop us,” adding with a smile: “We know who they are and we’ll get to them last.”

After 1993, Scientology was able to channel the millions it was spending against the IRS into projects that had been under way since the early 1980s.

Among them: trying to grow Scientology by attracting new members; pushing parishioners to sign up for ever higher levels of Scientology counseling; standardizing Scientology practices the way Hubbard outlined; preserving and distributing his many writings and lectures, and renovating Scientology’s buildings.

“The one incredible thing that we all needed was what David did,” said jazz musician Chick Corea, a long-time Scientologist who lives in Clearwater. “(He) came and took all the dropped balls and caught them all and kind of saved the organization from splintering apart, and put it back together again for all our sakes.”

Now, Scientology’s global 10-year plan calls for a mission in every city of 100,000 or more and a church in every city of 250,000 to 500,000, Miscavige said.

In the U.S., Scientology sees opportunity for growth in parts of the country with little or no Scientology presence, Miscavige said. “You go to the Midwest there’s not much at all.”

He also has been trying to improve Scientology’s public image, even as reports persist that Scientology harasses its enemies with private investigators, lawsuits, and tactics such as bad-mouthing targets to neighbors, relatives and business associates.

The image needs work, he said. “Am I satisfied? No. Of course not. Do I think it’s improved? Yes. Do I think we have more credibility than we had in earlier years? Yes. Do I think it should change? I think it should improve. Do I think that’s something that can happen overnight? Not quite.”

Scientologists on occasion had “no choice” but to fight, he said.

“Have they been right every time? Probably not. Should they make as big an effort at mending fences? I think so. ... Is there another approach that could have been taken? I think probably.”

One remaining hurdle for Scientology is the Lisa McPherson case, now in the hands of prosecutors who are deciding whether a criminal charge is warranted. McPherson, 36, was a Scientologist who became psychotic after a minor auto accident in 1995 and was taken from Morton Plant Hospital to avoid psychiatric treatment, which Scientologists believe is harmful.

Her fellow Scientologists watched her for 17 days at the church’s Fort Harrison Hotel before driving her to a hospital. Gaunt and dehydrated, she was dead on arrival from a blood clot in her lung.

Miscavige suggested the same situation would be handled differently in the future.

“Do I think that we should work with the community or the police or the medical people down there to work out what to do if there’s another Scientologist who needs care and we want to avoid psychiatric treatment? Yes I do,” Miscavige said. “And why is that? No matter what the circumstance ... anybody would want to do something to avoid someone dying.”

It is Scientology’s first acknowledgement that the four-star hotel may not have been the best place for McPherson.

Miscavige also said he believes some people were “thrilled” by McPherson’s death because it could be used against Scientology.

“Here’s what I do know,” he said, slapping his black leather desk top with each word. “No Scientologist -- no Scientologist -- is involved in attempting to do in another Scientologist.”

Miscavige said he usually does not involve himself in local issues, such as which buildings Scientology will buy in Clearwater. Nor was he called, he said, the night McPherson died.

He will, however, stay active on larger matters such as the 300,000-square-foot building Scientology wants to build across from the Fort Harrison Hotel.

When early architectural renderings resulted space-age designs that, Miscavige said, “looked like a hockey rink to me,” he steered church planners toward a historic look to match the Fort Harrison.

Despite Miscavige’s high place in Scientology, his associates say he doesn’t receive many more perks than a nice office, a fantastic wardrobe and proximity to Scientology’s stable of celebrity parishioners, including his friends Tom Cruise and John Travolta.

Beyond the intense exterior, Miscavige can deal a humorous one-liner. Friends say he is given to sending unexpected notes and gifts.

He drives a Honda around Los Angeles and lives in staff quarters with his wife, Michelle, who is one of his paid assistants. Reports to the IRS in the early 1990s put his salary in the $60,000 range, and Rathbun says it’s $50,000 now.

During frequent visits to Clearwater, where his mother lives, Miscavige said he spends his nights in Scientology’s staff dormitory, a converted apartment complex on Saturn Avenue. He said he eats in Scientology’s communal dining halls and sometimes gets out to Domenic’s Capri Italian Restaurant on Clearwater Beach. He goes to movies, enjoys trail biking in Hillsborough County, and has been known to ride a water scooter.

He said he also plays piano, takes underwater photographs, reads several books a week, exercises daily and keeps a casual eye on his hometown sports teams from Philadelphia.

He communicates with most Scientologists through church publications, and through gala events that reflect his interest in audio-visual effects and the performing arts.

The events, which are taped and sent around the world, have several trademark elements: Texas-size stages; grandiose props; laser shows; pulsating music; an audience of upbeat Scientologists and a super-size photo of L. Ron Hubbard.

Capt. David Miscavige, smartly dressed in a tuxedo or the blue-and-gold uniform of the Sea Organization, plays the confident emcee with lots of good news about Scientology.

At the end of the night, he may flash a thumbs-up or briefly soak in the applause. And he will turn and look up to his mentor’s huge visage and clap, leading the flock in a traditional Scientology chant.

“Hip hip hooray! Hip hip hooray! Hip hip hooray!”

It is Hubbard, after all, whose words Miscavige will heed as he tries to improve Scientology’s standing in Clearwater and around the world. Ten of them are inscribed on his boardroom wall:

“Ideas and not battles mark the forward progress of mankind.”



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