Millions Missing from Hubbard Estate--IRS & Media Cover-up

FOR IMMEDIATE RELEASE--BREAKING STORY

FORBES AND WALL STREET JOURNAL IMPLICATED
IN COVER-UP INVOLVING IRS OFFICIALS, A SENIOR SENATOR,
ILLEGAL TAX INFORMATION DISCLOSURE, HUBBARD LAWYERS,
AND NEARLY $175 MILLION IN MISSING ASSETS

Writing on the fortune of the estate of the late L. Ron Hubbard
("The Prophet and Profit of Scientology," _Forbes_, October 27,
1986), _Forbes_ writer Richard Behar reported that "FORBES can
total up at least $200 million gathered in Hubbard's name," going
on to say that "Hubbard would have been included high on The
Forbes Four Hundred."

Less than six months later, on 16 April 1987, the entire Hubbard
estate was valued in court-filed papers at only $26,305,706.00, a
difference from the _Forbes_ figure of nearly $175 million. In
complete control of the Hubbard estate during that entire period
was Executor Norman F. Starkey and his counsel, Hubbard probate
and business attorney Sherman Lenske of the law firm Lenske,
Lenske & Heller (LL&H). In fact, LL&H had been handling all
representation of L. Ron Hubbard for estate planning,
intellectual properties, business management, and litigation
since at least as early as April of 1981, and had been in control
of Hubbard's fortune and affairs while Hubbard himself had been
missing.

But Behar and _Forbes_ elected not to disclose the intimate
involvement in the estate of lawyers Sherman Lenske, Stephen
Lenske (brother of Sherman), and Lawrence E. Heller --the
principals of LL&H -- all of whom also had personal and
professional ties to former Assistant Commissioner of IRS Meade
Emory.

Emory, in fact, had been hired by LL&H to be the chief architect
of the Hubbard probate, as well as chief architect of the entire
Scientology corporate restructuring that LL&H began putting into
effect in early 1981, all of which had been intricately
interwoven by Emory with the tax considerations and assets of
Hubbard and his estate.

Instead of reporting those overriding facts, Behar and _Forbes_
went to great lengths attempting to lay all responsibility for
the Hubbard fortune on three people who could not have had any
control over it at all: David Miscavige, Pat Broeker, and Anne
Broeker, all merely members of the unincorporated Scientology
"religious order" known as the "Sea Organization" (Sea Org). The
other fact that _Forbes_ either covered up or didn't bother to
find out was that those three people were only employees of the
Scientology-related corporations that Meade Emory and LL&H had
created just years before, and which LL&H fully controlled
through literary property licenses and management agreements also
engineered by Emory.

"BUT THE CENTRAL FACT IS THE MONEY: HUNDREDS OF MILLIONS OF
DOLLARS..."

So wrote Behar and _Forbes_, then wrote: "There is something that
FORBES still doesn't know, however. It is something no one may
know outside a small, secretive band of Hubbard's followers: What
is happening to all that money?"

Our question is: why didn't _Forbes_ just ask the only "secretive
band" that actually knew the answer: Executor of Hubbard's estate
Norman F. Starkey, and Starkey's attorney Sherman Lenske? Why did
Forbes direct all attention away from them (the article never
even mentions them), and concentrate all attention on three
non-parties? Can a publication with the tax and financial savvy
of _Forbes_ actually be so obtuse that they don't know where
control of an estate lies? Or was there another agenda?

"How could Hubbard do all this?" _Forbes_ wrote. Our question is:
how could _Forbes_ do all this? Can a publication like _Forbes_
be so blind not know that an Executor had been appointed to
control such an estate? How hard did _Forbes_ have to look the
other way not to notice that a former Assistant Commissioner of
IRS had been deeply involved with the Lenskes and Heller in the
complex tax and probate plan for Hubbard's estate and interlocked
corporations?

In fact, how could _Forbes_ have responsibly gotten the $200
million figure without being in contact with the Executor and the
attorneys controlling the Hubbard estate?

Was _Forbes_ paid to not report where they got the figure, and to
create other false sources for it? There is, after all, almost
$175 million unaccounted for, according to the figures _Forbes_
themselves reported compared to the court-filed assessment six
months later. Or was there some other quid pro quo arranged for
the _Forbes_ silence on the roles of Emory and Starkey and the
Lenske, perhaps even paving the way to a subsequent high-profile
political candidacy?

ELIZABETH MACDONALD AND THE CLOSING AGREEMENT LEAK

A more recent star in the _Forbes_ firmament is former _Wall
Street Journal_ writer Elizabeth MacDonald. MacDonald has her own
connection to the same drama and players: she was at WSJ when the
officially secret IRS/Scientology Closing Agreement was leaked to
WSJ by an unknown source almost immediately after disclosure of
Meade Emory's behind-the-scenes involvement had been privately
submitted to then head of the Joint Committee on Taxation,
Senator William V. Roth, Jr., by media exec Lisa Jan Precious and
her literary agent, Richard Barber of New York.

MacDonald also had in her possession, at the time of the illegal
leak of tax information to WSJ, a full report on Emory's IRS
Assistant Commissioner background, as well as his involvement as
co-founder in the creation of the richest and most powerful
corporation in Scientology, the Church of Spiritual Technology
(CST, doing business as the "L. Ron Hubbard Library").

With the tax exemption, CST became the primary beneficiary of the
Hubbard estate in the plan created by Emory, a plan that just
happened to put the Lenskes and Heller -- who had hired Emory to
devise the plan -- in position as controlling "Special Directors"
for life of CST, with their normal hourly attorney fee arranged
as their compensation for that corporate position. PRF estimates
that to have averaged around $300 or more an hour, and the
Lenskes and Heller have been in that position since 7 June 1982.
For a 40-hour week, that translates to over $1.8 million per year
just for their salaries, or a total of $36 million paid to the
three lawyers over their 20-year tenure as a result of Emory's
master plan, all of which was granted tax exemption by IRS.

MacDonald and the editors of WSJ knew a great deal about Emory's
deep involvement with the Lenskes and Heller at the very time
when some unknown source illegally gave WSJ the then-secret
IRS/Scientology Closing Agreement, that coming only weeks after
the head of the Joint Committee on Taxation has received the same
information on Emory that WSJ had, in a closed-door meeting
between Precious, Barber, and Roth's top aide, Bill Nixon.

MacDonald was even in contact with Public Research Foundation
(PRF) around that time, saying that a story on Emory was "with
the editors." But, like _Forbes_, WSJ elected to suppress the
important information linking the Scientology corporations and
LL&H to Emory and IRS, instead only publishing the lengthy and
complex IRS legal document virtually without comment. To this day
WSJ has not revealed what they have known since at least December
1997 about Emory's involvement.

Were the _Wall Street Journal_ and MacDonald actually exercising
journalistic discretion and ethics by protecting a source on the
Closing Agreement leak? Or did the illegal leak quietly come from
the office of then-head of the Joint Committee on Taxation,
Senator William V. Roth, Jr., making WSJ actively involved in a
cover-up of government wrongdoing at high levels?

Now further complicating events surrounding the illegal leak, PRF
in a recent press released disclosed new information that IRS
agents reportedly threatened the whistleblower Lisa Precious,
telling her they had a secretly-made videotape of her that
somehow implicated her in the leak to WSJ, which caused her to
retain an attorney. PRF sources say the tape most likely was
clandestinely made of Precious when she went in to an interview
with Scientology's Office of Special Affairs (OSA). Others have
speculated that the tape might even have been secretly made in
the office of Senator Roth.

Although the leak seemed like a journalistic coup by WSJ, the
very length and complexity of the IRS/Scientology Closing
Agreement simply deflected the interest of a large segment of the
public, and also did nothing to expose Emory's involvement with
the Hubbard estate, with the entire Scientology corporate
restructuring that resulted in the Closing Agreement itself, or
with the three lawyers that Emory had helped put in control of it
all: neither Emory, nor either of the Lenske brothers, nor
Lawrence E. Heller are named anywhere in the document.

In fact, the interests of the Lenskes and Heller are hidden in
the Closing Agreement behind the signature of top
Scientology-side negotiator Monique Yingling, who signed with
Power of Attorney for CST, the corporation which is controlled by
the Lenskes and Heller. It's also the corporation that received
all assets of the Hubbard estate as a direct result of the
Closing Agreement in accordance with the probate and corporate
plan that had been masterminded by Emory while working with the
Lenskes and Heller.

MORE HIDDEN IRS CONNECTIONS TO THE HUBBARD LAWYERS

PRF has uncovered even more information on the backroom
machinations behind the Closing Agreement. It has now been
learned that Meade Emory was a former close associate at
Assistant Director level of IRS with Howard M. Schoenfeld,
Chairman of the negotiating work group that Yingling worked with
to secure the tax exemption for CST and the other corporations.
In light of emerging data, it could be said that the entire
exemption plan, including the entire Hubbard estate plan and the
interlocked corporate restructuring, was really arranged solely
by and between former IRS top executive Meade Emory -- ostensibly
working for the Hubbard/Scientology lawyers -- and Schoenfeld on
the inside at IRS, with LL&H and Yingling being paid go-betweens.

Even more disturbing is the fact that Schoenfeld ordered IRS
analysts assigned to the exemption investigations to look the
other way on questions of commercial activity and possible
inurement surrounding the Scientology exemption negotiations with
Yingling and the other attorneys involved -- one of whom was
Yingling's husband, Gerald A. Feffer, a former deputy assistant
attorney general now with Williams & Connolly.

Directly related to the "look the other way" mandate from
Schoenfeld is the for-profit corporation that Emory and LL&H
created called Author Services, Inc. (ASI) which handles the
Hubbard fiction works, but once handled all Hubbard literary
property, including the Scientology-related copyrights. With
10,000 shares, the assets of ASI alone are reported to have
jumped from $10 million to $44 million in just six months of
1982, while the Lenskes and Heller were controlling ASI as
Hubbard's personal and professional representatives in his
absence, and were also working closely with Emory. That $34
million leap in 1982 would account for at least some of the $200
reported by _Forbes_ in October 1986.

Then what happened to $175 million from the Hubbard estate in the
six months between the October 1986 _Forbes_ article and the
April 1987 probate court evaluation of the estate? What had
Sherman Lenske, Stephen Lenske, Lawrence E. Heller, Norman F.
Starkey, and former IRS official Emory done with that fortune?
How much did Yingling and Feffer know about it? How much did
Schoenfeld know about it? How much of it, if any, did they each
receive?

Another layer of intrigue over the missing fortune has been
added: it has been discovered that the person who ultimately
became Executor and Trustee of the Estate, Starkey, is the person
who originally hired LL&H in April 1981, ostensibly on behalf of
the missing Hubbard. At the time, Starkey was not named as
Executor and Trustee. Another associate of the Lenskes, attorney
Norton S. Karno, was.

After Starkey hired the Lenske brothers and Heller, they in turn
brought in Emory, who laid out the plan for the estate and the
new corporations. Emory and LL&H then returned the favor to
Starkey, naming him as the Executor and Trustee in the final will
and trust instruments, all purportedly signed by Hubbard the very
day before his reported death, after a reported stroke. At the
signing of the Closing Agreement, Starkey then turned all the
assets of the Hubbard estate over to the control of the Lenskes
and Heller in their highly-compensated roles as Special Directors
at CST -- all in accordance with the Emory plan.

PRF calls for an immediate full federal investigation into:

1. The connections between Emory, Schoenfeld, Roth, the Lenskes,
Heller, Starkey, and Yingling and Feffer, and how much each has
received in payment from the Hubbard estate and Scientology
accounts;

2. Their knowledge of the $175 million apparently missing from
the Hubbard estate;

3. The IRS-ordered transfer of the Hubbard estate, including all
the intellectual property, into the control of the Lenskes and
Heller at CST under Emory's plan, while simultaneously cutting
Hubbard's natural heirs out of the vast bulk of the inheritance,
all of which Schoenfeld approved as part of the exemption;

4. The illegal leak of the Closing Agreement and the responsible
parties;

5. The covert videotaping of Lisa Jan Precious;

6. How IRS agents came into possession of the Precious videotape;

7. The legality and Constitutionality of the IRS Closing
Agreement;

8. Any and all misdemeanors and felonies that might emerge from
such investigation, and any and all other possible principals,
accomplices, co-conspirators, or accessories after the fact to
any such misdemeanors and felonies as might be found.