Scientology's Most Obvious and Overlooked Crime - Inurement
I am going to quote an article by Jeramie Fortenberry to explain the legal term inurement.
Non-profit organizations are subject to what is known as the nondistribution constraint. Simply stated, this means that non-profit organizations cannot distribute profits to those who control it. The nondistribution constraint is the fundamental distinction between non-profit organizations from for-profit organizations.
In the Internal Revenue Code, the nondistribution constraint is embodied in the prohibition against inurement. “Inurement” is an arcane term for “benefit.” The inurement prohibition forbids the use of the income or assets of a tax-exempt organization to directly or indirectly unduly benefit an individual or other person that has a close relationship with the organization or is able to exercise significant control over the organization.
The essence of the inurement proscription is found in the language of Code § 501(c)(3), which provides that no part of a 501(c)(3) organization’s net earnings can inure to the benefit of any private shareholder or individual. Although this would clearly prohibit the distribution of dividends to those in control of the organization, the inurement prohibition is much broader than that in application. Most exempt organizations – including 501(c)(3) and 501(c)(6) organizations – are subject to the inurement prohibition.
The goal of the inurement prohibition is to prevent siphoning off of an exempt organization’s assets by insiders – those in control of the organization. In this context, “control” may be direct (as in the case of formal directors) or indirect (such as control over others who are officers or directors). Any time assets of the organization flow through to benefit the organization’s insiders, whether directly or directly, inurement is an issue.
The inurement restriction is absolute: An organization that violates this prohibition will not qualify (or will cease to qualify) for tax exemption regardless of whether it otherwise meets the appropriate statutory requirements for exemption. Because of the harsh nature of this rule, it has historically been enforced only in the most egregious circumstances.
Because the inurement prohibition was rarely used, Congress enacted a related set of rules that would provide an “intermediate” sanction. The intermediate sanction rules are “intermediate” in the sense that it is not as severe as outright revocation of tax exemption but does penalize the organization. The intermediate sanction regime is discussed in our section on excess benefit transactions.
In cases involving inurement, the IRS may impose the intermediate sanction penalties in lieu of or in addition to the revocation of tax exempt status. The IRS has published standards to determine how it will decide whether to revoke the 501(c)(3) status of an organization that has engaged in a transaction that constitutes both inurement and excess benefit. These standards provide that the IRS will consider all relevant facts and circumstances in making a determination of whether to revoke the tax exempt status of an organization that engages in an excess benefit transaction that constitutes inurement. Factors the IRS will consider include:
- The size and scope of the organization’s regular and ongoing activities that further exempt purposes before and after one or more excess benefit transactions occurred;
- The size and scope of one or more excess benefit transactions relative to the size and scope of the organization’s regular and ongoing exempt functions;
- Whether the organization has been involved in repeated excess benefit transactions,
- Whether the organization has implemented safeguards that are reasonably calculated to prevent future violations, and
- Whether the excess benefit transaction has been corrected or the organization has made a good faith effort to seek correction from the disqualified person or persons who benefited from the excess benefit transaction.
This system effectively gives the IRS two options to enforce the nondistribution constraint. In blatant violations of the inurement prohibition, the IRS can both revoke tax exemption and impose monetary penalties under the intermediate sanction regimes. In less severe cases, the IRS may seek to correct the situation through intermediate sanctions alone.
That's a legal explanation of inurement, the CRIME of a person who controls a charity BENEFITING PERSONALLY from the charity, in the United States.
I recently listened to an episode of the Fair Game podcast with Leah Remini and Mike Rinder. Their guest was Kate Bornstein. Kate was formerly a person under a different name while in Scientology but I am not going to use that name as I am going to avoid deadnaming. If Kate or someone else chooses to use that name that is their choice, but I am simply going to make the note that Kate had a different name earlier and identified as male and now no longer identifies as male or uses that name.
So, the story goes that Kate was sent on a trip by Scientology executives to a foreign bank and a bank executive mistook Kate (who at the time could pass for male, in other words most people would assume Kate was a biological male, meaning born with male sex organs) for Ronald Hubbard and remarked that it was an honor to have Ronald Hubbard in their bank in person.
Kate Bornstein reportedly felt this was odd and after leaving the bank immediately called Scientology executives in the United States and reported that the banker had mistaken Kate (who, again probably looked like a man to the banker) for Hubbard and said it.
The reaction of the Scientology executives was reported as having Kate return to the United States and go to a Sea Org organization and get grilled by numerous executives. Kate was reportedly given the two options of either going to the RPF or being eternally expelled from Scientology. Kate was told that for eternity Scientology would be unavailable, how this could be enforced in future lives in different bodies with different names is beyond my understanding, but that is the punishment offered. Someone really wanted Kate to submit to the RPF. Kate, incidentally did not and left Scientology.
The RPF is essentially a gulag and reeducation program in which one becomes a prisoner doing hard labor, is literally fed scraps, forced to get by on four hours sleep, treated as less than human, subjected to the most overt attempt at brainwashing available in Scientology.
This is the Truth Rundown in which they are subjected to hundreds or thousands of hours of being indoctrinated with the central idea that whenever they have seen Scientology executives, particularly David Miscavige, do anything wrong, they were hallucinating and in fact the "truth" is that they have hidden crimes that cause these hallucinations!
I can't overstate the extreme control used to brainwash the subject into not believing their own eyes and ears and to readjust their minds to see Scientology and David Miscavige as ALWAYS right and anyone else who disagrees, including themselves and their own memories as WRONG if they hold any criticism of David Miscavige or Scientology or any information that David Miscavige doesn't want shared!
Now, understanding that the RPF and specifically the Truth Rundown brainwashing program have the purpose of burying and hiding or erasing and replacing information that is harmful or dangerous to Scientology as an organization is in my opinion the key to understanding WHY the fact that Kate Bornstein was mistaken for Ronald Hubbard when interacting with the foreign banking executive was something that inspired such a panic and extreme reaction.
I believe that the foreign banking executive had the evidence that Ronald Hubbard benefited personally from the vast majority of donations to Scientology and that if this was revealed then Scientology would face tremendous legal and public relations consequences.
Most people in Scientology thought that Scientology was benefiting the world and still do today. If they knew the real way the funds were and are allocated most people would stop donating money and leave simply based on this one fact.
And the results would be catastrophic for the survival of the Scientology organization on a national and international level.
Here's a quote to put the issue in context historically:
"Vicki Aznaran, who was one of Scientology's six key leaders until she bolted from the church in 1987: "This is a criminal organization, day in and day out. It makes Jim and Tammy [Bakker] look like kindergarten." To explore Scientology's reach, TIME conducted more than 150 interviews and reviewed hundreds of court records and internal Scientology documents. Church officials refused to be interviewed. The investigation paints a picture of a depraved yet thriving enterprise. Most cults fail to outlast their founder, but Scientology has prospered since Hubbard's death in 1986. In a court filing, one of the cult's many entities -- the Church of Spiritual Technology -- listed $503 million in income just for 1987. High-level defectors say the parent organization has squirreled away an estimated $400 million in bank accounts in Liechtenstein, Switzerland and Cyprus." End quote.
From Time Magazine, The Thriving Cult of Greed and Power by Richard Behar 1991
Additionally we have a quote from the historian and top expert on Scientology author Jon Atack. This is from an article entitled What Motivated L. Ron Hubbard? Historian Jon Atack Follows the Clues published at The Underground Bunker blog on August 26, 2013 by Tony Ortega.
"When Hubbard dropped his body, almost fifty years later, he had failed to spend $648 million of the monies he’d extracted from the Dev-OTs. A paltry million went to the wife who had endured prison to protect him, far less to his surviving children. But half a billion dollars went to the Church of Spiritual Technology, which lists as its corporate purpose, “To perpetuate the name L. Ron Hubbard.” Not the “technology,” just the name, please note." Jon Atack
Jon Atack pointed out that Hubbard had amassed a fortune of six hundred and forty eight million dollars back in 1986 and his Sea Org slaves often worked a hundred hours a week or more, maybe once or twice a year had a day off, were frequently not paid or paid pennies an hour, literally making perhaps thirty dollars a week on the weeks in which they were paid, often packed into filthy, cramped communal living in bunk beds jammed into crowded rooms and often fed rice and beans and given the cheapest possible living conditions including a lack of toilet paper and being encouraged to take quick showers to save money on water.
Hubbard also had a very extensive camera collection and lived a lifestyle quite different from the Sea Org members and the staff of his local organizations. David Miscavige reportedly lives a lavish lifestyle as well. His meals, clothes, living conditions and on and on are in an entirely different stratosphere from those of the vast majority of Sea Org members.
So, my ultimate point is that in my opinion, the reason that the Scientology executives panicked and wanted the fact that Kate Bornstein spoke with the foreign bank executive, however slightly and briefly, to be hidden as a secret was because Kate could potentially have been a link in a chain of EVIDENCE.
Evidence that is damning for Scientology regarding the inurement that Ronald Hubbard and now his successor David Miscavige engage in.
I have been around Scientology a long time, having been a Scientologist myself for twenty five years and left the group in 2014 and studied and written about the group since then.
I have seen that the Scientology organization has an odd habit of hiding and burying information and subjecting people to the RPF and Truth Rundown brainwashing program. By odd I mean that ONLY SOME PEOPLE are treated this way.
I have been in orgs including Sea Org orgs in Los Angeles and New York City and seen for myself that when some people try to leave Scientology or the Sea Org they are chased after, monitored, pursued and strongly discouraged, even coerced into staying. But some are just told "If you want to leave, just leave."
Some get the blow drill (blow means unauthorized departure in Scientology) and staff drop everything and in a mad panic try to find, catch, and regain physical control over a person.
It has been described by many people in accounts of escaping Scientology.
But the weird thing is that some people don't get that. In fact some are just told to sign a couple forms and they leave, get assigned a condition of doubt or something like that and told to pay a freeloader debt and go about their lives. No RPF or lengthy process to get out.
We can see that people who have been discouraged from leaving sometimes could embarrass David Miscavige, like Jenna Miscavige Hill, who was hidden, or his father Ron Miscavige who had to escape and was monitored by private investigators for years.
Debbie Cook was sued by Scientology, then when she began testifying in court as to the actual conditions under which she was held as a prisoner in the Scientology gulag, the RPF as a prisoner and when she said she was guilty (during her Scientology imprisonment on video) for the Scientology interrogation to be released from the RPF in court, Scientology immediately dropped the lawsuit and reportedly paid her a huge sum (estimates are in the six to seven figures range) and had her sign a non disclosure agreement, where just days earlier they were suing her!
Scientology (meaning the executives, Ronald Hubbard, and now in his turn David Miscavige) is willing to do just about anything to hide damaging secrets! That's well established!
I think if we look at the people hidden or imprisoned and subjected to reeducation in Scientology the pattern becomes clear. When we add the ones that a lot of time, effort, and money are used on and contrast them against the ones who are allowed to just walk away the fact that they have two or three kinds of treatment becomes obvious.
The ones who have no information, no connection to the leaders, no knowledge of crimes, no fame or anything that is a threat to Scientology organizations or David Miscavige can be turned loose without a second thought, the ones who know what could be damaging information or were connected to the upper echelon in Scientology or could embarrass or humiliate David Miscavige or know the crimes of Scientology or even bits of information that could be combined to form a threat? Those people have to be controlled by Scientology!
I think Kate Bornstein was such a threat by having knowledge that could expose the inurement committed by Ronald Hubbard and that lots of people who were in Scientology have information, sometimes without even realizing it, that if it were to be combined with other information by good investigators, attorneys, and possibly law enforcement officers or ex officers, could lead to severe consequences for Scientology as an organization and David Miscavige as an individual
I think that's the reason that David Miscavige has the internet monitored and OSA works endlessly to disrupt critics of Scientology and to cut our communication with each other.
I think David Miscavige KNOWS that lots of us have bits of information that alone, and without knowledge of the law and how law enforcement proceeds, are not effective, especially if we don't share them or just make an isolated post or comment without context or supporting evidence, but that he has millions of bits of evidence for thousands and thousands of crimes that are out in the world, in the memories of thousands of ex Scientologists, that could if the right combination of pieces ever were put together in the right way, whether by a journalist or a FBI agent or attorney or prosecutor or official in the IRS or someone else, could result in the end of life as he knows it, it could take him to a new condition defined by the revelation of information and the subsequent actions that a government takes.
I don't think he is worried about losing individual parishioners or Scientology shrinking or the technology not being applied. I think the whole ideal org program is designed to prevent charges of inurement and simultaneously fool people in Scientology into thinking it is expanding. It is meant to con two different groups of people.
I think Kate Bornstein has exposed what David Miscavige fears and is actually all about. I also think that a group of people who want the crimes and abuses of Scientology to be reduced or ended should devote some of their time, attention, and resources to gathering the bits and pieces of evidence available that David Miscavige, Hubbard, and other Scientology executives have worked to keep hidden, and having qualified experts in the appropriate fields, including forensic accounting, law enforcement, fraud, human trafficking and on and on be involved in collecting and evaluating the evidence. I think this effort could pay tremendous dividends.
What do you think?
Scientology's Most Obvious and Overlooked Crime - Inurement
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