N A T I O N A L A N D I N T E R N A T I O N A L
ATTN: ASSIGNMENT DESK
FOR IMMEDIATE RELEASE--BREAKING STORY
IRS'S SCHOENFELD ORDERS IRS INVESTIGATORS
TO LOOK THE OTHER WAY ON FOR-PROFIT CORPORATION
CREATED BY FORMER IRS ASSISTANT COMMISSIONER
AND SCHOENFELD ASSOCIATE MEADE EMORY
Howard M. Schoenfeld, negotiations chairman of the IRS work group
created for the Scientology tax exemption, had earlier worked
closely with Scientology corporate architect Meade Emory at the
Assistant Commissioner level of IRS in the mid-'70s according to
information recently learned by Public Research Foundation (PRF).
An important first part of Emory's extensive corporate
restructuring of Scientology in the early '80s included the
creation of a highly profitable for-profit commercial corporation
known as Author Services, Inc. (ASI) which packages and sells the
fiction works of L. Ron Hubbard.
As reported on 9 March 1997 by Douglas Frantz of the _New York
Times_, Schoenfeld ordered Donna Moore and Terrell M. Berkovsky,
the two IRS analysts assigned to the Scientology review, "not to
consider any substantive matters," specifically including
instructions "not to address issues like whether the church was
engaged in too much commercial activity or whether its activities
provided undue private benefit to its leaders."
But Frantz and the _Times_ made no mention of the earlier
Schoenfeld/Emory connection at Assistant Commissioner level, and
no mention of the fact that Meade Emory had been the chief
architect of the entire Scientology corporate restructuring,
including the creation of the for-profit ASI and its 10,000
profit generating commercial shares.
Now many people are questioning where those shares of ASI went
and who benefitted from them, especially in light of recent
revelations of corporate corruption at the highest level, and
especially in light of Schoenfeld ordering IRS analysts to look
the other way on the exact issues of commercial activity and
private benefit to leaders.
Controlling ASI from its incorporation on 13 October 1981 were
three tax and probate attorneys--Sherman Lenske, Stephen Lenske,
and Lawrence E. Heller, of the law firm Lenske Lenske & Heller
(LL&H)--who were the professional and personal representatives of
Hubbard. They also are the ones who had hired Emory to oversee
the complex interlocking Hubbard tax and probate plan as well as
the intricate Scientology corporate restructuring that was
interwoven with the Hubbard estate and probate, and which
included as a keystone the for-profit ASI.
So closely tied were the Hubbard estate and the Emory created
Scientology-related corporations that ASI controlled all of
Hubbard's intellectual property and business affairs under a
Management Agreement authored by Emory and LL&H, and LL&H were
therefore able to exert considerable control over all of
Scientology for some time through ASI.
The Lenskes and Heller were then established as controlling
"Special Directors" in another Emory creation, a corporation
known as Church of Spiritual Technology (CST), of which Emory is
named in a Claims Court ruling as co-founder. CST was soon named
as primary beneficiary of Hubbard's estate in Hubbard's will and
trust papers -- also supervised by Emory, also secret at the
time. As a result CST ultimately inherited control of all Hubbard
intellectual property, but only upon granting of tax exemption by
the Schoenfeld-controlled negotiations work group.
The actual relationship and connection between the for-profit ASI
and CST, both created by former Schoenfeld associate Emory,
didn't become fully revealed until after the leak to the Wall
Street Journal of the once secret Closing Agreement that
Schoenfeld had engineered. That ordered that "all the shares of
Author Services, Inc." be transferred to the Church of Spiritual
Technology "without consideration." That made the for-profit ASI
a wholly-owned subsidiary of CST, controlled from the top by the
Lenske brothers and Heller, who themselves had hired Emory to
construct and supervise the entire convoluted plan.
With the revelation of the connection between LL&H, Meade Emory
and Howard Schoenfeld, plus Schoenfeld's blocking normal IRS
inspection of commercial activity and inurement prior to the tax
exemption, serious questions are now being raised about profits
from the shares of ASI, who had them when, and who benefitted
These questions are compounded by a curious clause written into
the Closing Agreement by Schoenfeld, which some have called the
"Continued Conspiracy Clause." In it, Schoenfeld and Emory and
all IRS employees, current and former, are granted full immunity
from any allegations or consequences of a "continued conspiracy,"
and the Scientology signatories are enjoined in the clause to do
everything in their power to impede any inquiry or litigation
concerning any such "continued conspiracy."
PRF has determined from a court filed document that Schoenfeld
and Emory were together at IRS in 1976 when Emory was Assistant
Commissioner of IRS to Donald C. Alexander, and Schoenfeld was
"Special Assistant" to Assistant Commissioner for Employee Plans
and Exempt Organizations Alvin Lurie. In a curious coincidence,
an IRS employee named Gerald Wolfe was stealing IRS documents
that year, even from Lurie's office, and secretly handing them
off to Michael Meisner of Scientology's Guardian Office. This led
to an FBI raid on the Guardian Office and its subsequent
eradication, itself overseen by Lenske, Lenske and Heller. They
then hired Emory, who masterminded the corporate restructuring
that led to the exemption created by Schoenfeld's group.
The question now remains whether any of the profits from the
10,000 shares of ASI stock ever derived in any way to the benefit
of the Lenskes, Heller, Emory, Schoenfeld, or any of their
associates, and if so, how much. PRF has initiated an
investigation into the disposition of the shares and profits from
them, particularly from 1981 to 1993, while the IRS was
conducting the negotiations and Schoenfeld was deflecting normal
IRS procedure inspection of commercial activity and inurement.
Initial distribution of the shares was 5,000 to Terri Gamboa, who
herself was instrumental in the hiring of LL&H, and 5,000 to a
man named Howard "Homer" Schomer. Schomer left ASI and
Scientology in late 1981 but so far there is no record found of
where his 5,000 shares went, nor any record of the disposition of
profits from the shares he held.
Schomer himself has claimed that assets of ASI from Hubbard's
intellectual properties climbed from $10 million to $44 million
in the first six months of 1982 alone, while the Lenskes and
Heller were controlling ASI, and while Emory was actively
involved with LL&H setting up the other corporations, Hubbard
probate papers, and intellectual property controls.
Gamboa left ASI and Scientology sometime around 1988, according
to best estimates, and so far there is also no record of the
disposition of her shares, or of the profits derived from them.
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