Title: Scientology is
collapsing in Britain
Author: Chris Owen <chriso@lutefisk.demon.co.uk>
Date: Mon, 26 Jan 1998 20:45:27 +0000
I went down to the City today to visit Companies House, the UK
Government organisation which keeps records and accounts for Britain's
1.5 million companies. My aim was to discover the corporate status of
Scientology in Britain. What I found - and didn't find - was very
interesting.
Scientology now has only four corporate entities in Britain, down from
11 in 1990. Three orgs have collapsed in the last few months. Another
four have been dissolved between 1992 and 1995. Hardly a picture of
corporate health, is it? These are the surviving entities and their
company numbers:
----------
Church of Scientology (England & Wales) Limited - #03235420
(incorporated 8/8/1996)
Church of Scientology Religious Education College Inc. - #FC009154
(An Australian corporation which runs Saint Hill Castle in Sussex.
It hasn't submitted any accounts for the last two years; very
naughty. They're supposed to be annual. Maybe I ought to point
this out to the right people...)
Hubbard College of Administration - #03080958
(the other body which shares the Saint Hill site. It hasn't
submitted accounts for 1997 yet, but then again it may be a bit early
as yet. I'll keep an eye on this one.)
Dianetics and Scientology Mission of Bournemouth - #02081181
----------
The casualties are as follows, and include some high-profile orgs:
----------
Church of Scientology of the United Kingdom - #01510453
(This was a real stunner: the high-profile London org in Tottenham
Court Road apparently went out of business last year! It was
dissolved in 1997, and last submitted accounts on 31/12/1993.
But there's an explanation for its continued existence: see below.)
Dianetics Association Limited - #00500962
(Dissolved 1995; presumably this was the body created to regulate
Dianetics groups in the UK. In practice, every Dianetics group
that I'm aware of has been effectively a branch of an org or mission,
housed in the same premises under a supposedly different identity.)
Dianetics and Scientology Mission of Chichester - #02081183
(dissolved 1997; last accounts submitted on 31/12/1995)
Dianetics and Scientology Mission of Southampton - #02081186
(dissolved 1997; last accounts submitted on 31/12/1995)
Scientology Library and Research Ltd - #00791176
Scientology Publications Ltd - #00528711
Hubbard Association of Scientologists Ltd - #00662677
(This was the body originally set up by Hubbard in 1954 as the parent
company for all Scientology dealings; it was superseded by the
Churches of Scientology from about the mid-1960s but, surprisingly,
was not dissolved in the UK until 29/11/1994. What was it doing in
the meantime?)
Hubbard Explorational Company Ltd - #00892496
(The original corporate facade for the Sea Org; HEC Ltd was the legal
owner of Hubbard's motley fleet during the late 1960s and 1970s, and
funded the activities of the Sea Org. From contemporary accounts, it
seems to gained assets in some very dodgy ways (e.g. smuggling money
to the ships in Sea Orgers' socks). It was wound up on 17/02/81,
which would correspond approximately to the "Corporate Category Sort
Out" embarked upon around that time by David Miscavige and his
cohorts.)
Church of Scientology Mission of Brighton Ltd - #02081182
(dissolved 29/1/94)
Church of Scientology Mission of Leeds Ltd - #02082080
(dissolved 17/11/92 - my birthday! - if only I'd known...)
Church of Scientology Mission of York Ltd - #01684883
(dissolved 25/05/93)
Church of Scientology of California - #FC005823
(dissolved 31/12/81; the UK Church of Scientology was once wholly
owned by CSC, which was wound up in the UK as part of the Corporate
Category Sort Out and subsequently asset-stripped in the States to
prevent Larry Wollersheim collecting the damages owed him by CSC.)
----------
From 11 entities in 1990 to 4 in 1998; that's a clearly declining
statistic (and Ethics trouble, no doubt). But does this show an
*actual* decline, or merely corporate streamlining?
It's undoubtedly a bit of both. There's no doubt that several missions
have indeed gone out of business, and this is bad news for an
organisation which constantly proclaims itself to be "EXPANDING"
(capitals sic). However, some missions have clearly been subsumed into
other corporate entities: the Poole Mission, for instance, is
technically a branch of the Bournemouth Mission, which is a distinct
entity in its own right. Presumably Sunderland and Hartlepool have the
same relationship to Newcastle; however, the latter Mission is not a
seperate entity. Nor, with the demise of the Church of Scientology of
the United Kingdom, is the London org, next to Goodge Street Tube
station. Interestingly, with the demise of the Dianetics Association,
every Dianetics Centre (proclaimed as such on their nameplates and in
their literature) now appears to be wholly owned by Church of
Scientology (England and Wales) Limited.
I assume that the Sunderland and London orgs are likewise parts of
CoS (E&W) Ltd. However, this raises an interesting question: CoS (E&W)
was incorporated in August 1996; CoS UK ceased filing accounts in
December 1993, when its last accounts were submitted. What happened in
between?
No doubt the reorganisation of the last few years was prompted (in part
at least) by Scientology's desire to streamline its corporate structure
to gain charitable (i.e. tax-exempt) status from the Charity Commission
- the review of their application is still ongoing. It is interesting,
though - and bad news for Scientology - that individual orgs are
apparently unable to pay their way. Merging into the larger England and
Wales-wide organisation, would enable unprofitable orgs to be subsidised
with income from the rather more profitable operations at Saint Hill. I
believe I'm right in saying that (in marked contrast) most orgs in
Germany and the US are individual entitities - can anyone confirm this?
(I seem to recall something to that effect in a list of liens on US
orgs).
What I *didn't* find was almost as interesting as what I *did*. You
may recall in the small print of the 1993 IRS-Scientology agreement,
leaked on 30 December last year, that one of the organisations to which
tax exemption was given was Sea Org Reserves (UK) Ltd. SOR was
established in the late 1970s during one of Hubbard's periodic fits of
paranoia: its stated objective is to provide enough cash reserves to
keep Scientology afloat for at least a year if it is deprived of all
income worldwide. Much of Scientology's profits appear to have gone to
SOR. Martin Ottman recently posted (see "The Income of Scientology -
Follow Up No. 1", 12 Jan 98) that SOR had $250,000,000 (US) in the
Kreditenbank Luxembourg, probably in gold or other long-term
investments. If this is accurate, then SOR (UK) probably has a very
considerable sum in assets.
I looked for SOR (UK) Ltd in the records at Companies House, but could
find no trace of it. This suggests two alternative scenarios:
1) The corporate identity is bogus (though I strongly doubt this);
2) The entity is based in the Isle of Man or one of the Channel
Islands, which are not technically parts of the United Kingdom, being
self-governing (in some cases feudal) territories with their own laws
and formidable reputations as tax havens which don't ask too many
questions about where your money came from.
I'd put my money on the second scenario. This would be supported by
the inclusion on the list of Sea Org Reserves (Cyprus) Ltd - like the
Channel Islands and Man, a tax haven reputed in recent years for being a
favourite home for the ill-gotten gains of dodgy Russian "biznismeny".
I assume that if SOR (UK) Ltd is indeed based off-shore, then its
records would also be kept off-shore (and strictly secret).
So, to sum up, we have an intriguing picture of severely declining
local orgs, a streamlining of the general structure and an apparent off-
shore fund which is being used to stockpile (launder?) money and avoid
tax.
I'll try to get my hands on the accounts and business records of a
number of the UK entities; it'll be interesting to see how much money
they're making and - if it's recorded - where it's going. Watch this
space.
--
| Chris Owen - chriso@lutefisk.demon.co.uk |
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