IRS and Scientology
Public Research Foundation Reports


Public Research Foundation
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November 1997

Meade Emory, former Assistant to the Commissioner of the Internal Revenue Service, co-founded Scientology's most senior organization--Church of Spiritual Technology--according to recently uncovered records of the United States Claims Court. Emory is currently Director of the Washington State University Law School's Graduate Program in Taxation in Seattle.

The Emory-co-founded Church of Spiritual Technology (CST), doing business as the "L. Ron Hubbard Library," now controls the copyrights for all of L. Ron Hubbard's intellectual properties--once valued at close to $100 million. CST also enjoys ultimate authority over all Scientology-related trademarks, including the name "L. Ron Hubbard."

Emory was Assistant to the Commissioner of the IRS from 1975 through 1977. Strangely, those were the same years in which an IRS employee, Gerald Wolfe, was covertly passing IRS documents to Scientology's Guardian's Office. In 1976, Wolfe even provided forged federal I.D. to a Scientology staff member, Michael Meisner, and together they used the forged credentials to pilfer copies of documents from the IRS and other federal agencies. Wolfe and Meisner's activities ultimately resulted in federal criminal convictions against high-level Scientology executives. Most notable among those was L. Ron Hubbard's wife, Mary Sue Hubbard.

The fact that she was Hubbard's wife tended to overshadow more important facts: Hubbard himself had disappeared in February of 1980 under mysterious circumstances still not satisfactorily explained, and Mary Sue Hubbard--with the aid of the Guardian's Office--had been left with the duty and the power to safeguard his copyrights and trademarks.

But in July of 1981, Mary Sue Hubbard was overthrown, losing her long-held control over Scientology's copyrights and trademarks. Soon after, the Guardian's Office was disbanded. Then by May of 1982--less than a year later--Emory had helped to set up CST, the corporation that eventually assumed control of all rights to L. Ron Hubbard's works.

According to the June 29, 1992 ruling in U.S. Claims Court case No. 581-88T, CHURCH OF SPIRITUAL TECHNOLOGY v. THE UNITED STATES, "CST was founded in 1982 by Lyman Spurlock, Meade Emory, Esq., Leon Misterek, Esq., and Sherman Lenske, Esq. CST... subsequently sought tax-exempt status under the Internal Revenue Code."

That tax-exempt status was granted on October 1, 1993, in a sealed, secret, 4"-thick agreement with IRS. None of the terms of the agreement have ever been made known, either by CST or IRS. The only clue to any of the terms came at the event celebrating the exemptions, when David Miscavige, head of Religious Technology Center (RTC) and Scientology's highest-ranking spokesperson, said, "There will be no billion-dollar tax bill that we cannot pay!" Oddly, while proclaiming the long list of Scientology entities that had received exempt status, Miscavige made no mention of CST's inclusion--even though that is the senior-most corporation of all, and the one that benefitted most from the sudden IRS change of heart.

Other oddities have also surfaced:

1. According to the U.S. Claims Court ruling, "None of the founders of CST, with the exception of Mr. Spurlock, has any stated religious connection with Scientology."

2. The October 1993 IRS tax-exempt blessing on CST was granted just months after Norman F. Starkey, executor of the estate of L. Ron Hubbard, had finally secured control of every intellectual property ever produced by L. Ron Hubbard.

3. On November 29, 1993, scarcely two months after CST had been granted tax exemption, Starkey transferred the rights for all 7,730 of L. Ron Hubbard's intellectual properties to CST.

Many questions remain regarding Meade Emory's possible role in bringing about the tax exemption for CST, but questions also surround Emory's fellow CST co-founder, attorney Sherman Lenske.

According to court records, "Lenske and two other non-Scientologists have the status of Special Directors of CST." The two others are Lenske's brother, attorney Stephen Lenske, and another attorney, Lawrence Heller.

But Sherman Lenske's involvement goes all the way back to 1981. In a sworn declaration, Lenske says he was hired in April 1981 to be attorney "in all aspects of estate planning" for L. Ron Hubbard.

Therein lies another strange coincidence: Lenske appeared on the scene only after Hubbard had disappeared, and only three months before Mary Sue Hubbard was overthrown, then became a key figure in every step that led to CST's take-over of the multi-million-dollar intellectual properties she had previously controlled, and to which she was rightful heir:

1. Lenske drafted all wills and trusts having anything to do with final distribution of Hubbard's assets and intellectual properties.

2. Lenske was a consultant in the corporate restructuring that created CST.

3. Lenske represented Norman F. Starkey, the executor of Hubbard's estate, right up through the point when Starkey transferred the intellectual property rights to CST.

4. In addition to his role as a Special Director of CST, Lenske is its Registered Agent, is Registered Agent for Religious Technology Center (which currently licenses the trademarks under CST's aegis), and is Registered Agent for Author Services, Inc., which represents Hubbard's fiction works.

5. Lenske created the fictitious business name, "L. Ron Hubbard Library," filing it first for Norman F. Starkey's use as executor, then filing it again in 1993 for CST, right after CST received all the intellectual property rights from Starkey.

How did an attorney who does not even subscribe to the religious philosophy of Scientology become its most influential figure, with ultimate authority over the entire body of work?

What role did Meade Emory's inside-the-Beltway connections have on the sudden, secret turn-around by IRS?

Is it possible, as one observer has speculated, that all of Scientology went into receivership to IRS, and is now being run--as a corporation--by the federal government?

Is that why the agreement is such a closely-held secret?

All these questions still wait for answers. But the previously-suppressed connection to IRS may provide a new place to look for them.