What a week of “dox” we have going on this week in the Underground Bunker. Scientology Australia had to open up its books because of changes in the law there, and on Monday we had the latest numbers and a rare peek inside Scientology finances. Yesterday, a release of government documents gave us our first look ever at L. Ron Hubbard’s high school grades. (Random, we know.)
And now, today, another telling disclosure. We have the latest filing for the finances of Scientology’s organizations in the UK which, for bizarre reasons we’ll explain in a minute, are actually registered with Australia’s national charities commission.
It was journalist Bryan Seymour who publicized what a strange setup Scientology UK has in South Australia. See, in the UK, Scientology does not have charity status. So, in order to get around regulation there, the UK orgs are registered as a company called “Church of Scientology Religious Education College, Inc. or COSRECI, which is based in Adelaide, Australia, where Scientology is recognized as a church. And that has all of the orgs and missions in Britain being registered to a suburban address on the other side of the world, probably for tax avoidance reasons.
Here’s Bryan’s report on the situation from 2010…
(And part 2, with everyone’s favorite, Tommy Davis, is here.)
It’s a pretty stunning bit of sleight-of-hand, and once Seymour exposed the arrangement, little at first seemed to be done about it. But he, and Senator Nick Xenophon of South Australia, pushed for regulation, and they were rewarded when a national charities commission was set up in 2011. Now, at least, COSRECI has to register with the commission, and turn over information to it.
One of the things COSRECI claims in its latest information statement to the charities commission is that the orgs and missions in the UK have no actual employees, but operate with the help of 700 volunteers. (On Monday, we learned that Scientology claims a similar situation in Australia, with zero employees and 500 volunteers). For those who may have worked in the Sea Org, with its 100-hour weeks for pennies an hour, and years with no days off, that notion of “volunteer” may seem a bit strained.
So anyway, we have now for you the latest annual report from COSRECI (for the year 2013), which it submitted to Australia’s charities commission — but again, it actually records the financial dealings of Scientology’s operations in the UK, not Australia.
The report claims that UK Scientology took in income of £12,535,163 ($19,434,516 in US dollars) in 2013, which is a little down from the previous year. But expenditures for the year were £13,738,269 — leaving a deficit of £1,203,106.
We showed the annual report to Mike Rinder, Scientology’s former top international spokesman and a native Australian now living in Florida, and he pointed out how COSRECI managed to show a deficit and avoided having to pay any taxes on profit.
“Look at the amounts the organizations in the United States are charging for things like ‘management fees’,” Rinder told us. “They are always showing a negative balance sheet and thus are liable for no taxes. The Church of Scientology International (CSI) and the Flag Service Organization (FSO) squeeze as much money out of COSRECI as they can during the year, and no matter how much they take in, they ensure that they have bills that are greater than the money they have taken so they are showing a loss — they never cover their ‘expenses’ so they never have a taxable profit.”
He’s referring to notes like this, which appears in the report (We’ve provided conversions to US dollars): “At the year end, £10,239,801 ($15,845,528) was due to the Church of Scientology International and its subsidiaries…Church of Scientology Flag Service Organization charged £960,661 ($1,486,431) for courses provided to COSRECI. At the year end, £3,779,363 ($5,848,508) was due to Church of Scientology Flag Service Organisation…In summary, at the year end, £14,966,243 ($23,160,037) was due…”
Yet, despite all of that pricey guidance from the US entities, Scientology in UK has not shown any expansion in the last six years that we have records for:
Income 2007: £12,971,494
Income 2008: £12,958,196
Income 2009: £12,341,616
Income 2010: £11,155,497
Income 2012: £12,837,570
Income 2013: £12,535,163
If those numbers sound high, keep in mind that Mat Pesch, a former Sea Org worker who oversaw finances for the church in South Florida, where experienced Scientologists from around the world were required to come for some services, told us that in the late 1990s and early 2000s, the facility in Clearwater was bringing in $1.7 million a week.
We also noticed that over that same period, UK Scientology’s reserves are diving:
Reserves 2007 £15,065,455
Reserves 2008 £12,772,013
Reserves 2009 £13,434,869
Reserves 2010 £10,997,279
Reserves 2012 £9,626,466
Reserves 2013 £8,701,990
Rinder suggested that Scientology UK may be dipping into its reserves for purchasing new real estate, one of Scientology leader David Miscavige’s passions.
Our commenting community includes several experts on finance. We’re looking forward to what you find in COSRECI’s annual report which stands out to you. Have at it.
Thanks to our friend in Austria, Wilfried Handl, for sending this classic Scientology video, just posted, with some scenes from a fundraising event last year in Switzerland. Wilfried has been keeping an eye on the grand opening of Basel’s Ideal Org, which may come as soon as this week.
Bonus photos from our tipsters
Scientology in Venezuela: Fundraising conga line, or shoulder massage chain?
And you didn’t think the Nation of Islam-Scientology mashup couuld get any creepier…
WISE in Russia has caek!
Scientologists are using social media more than ever. Drop us a line if you spot them posting images to Instagram or Facebook!
Posted by Tony Ortega on February 25, 2015 at 07:20
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Learn about Scientology with our numerous series with experts…
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SCIENTOLOGY MYTHBUSTING: Historian Jon Atack discusses key Scientology concepts