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More McPherson Cover-Up Corroboration: “I Watched Them Drain $20 Million In Reserves”

New revelations in the 17-year Lisa McPherson saga keep coming as evidence mounts that the Church of Scientology spent tens of millions of dollars in an attempt to corrupt the investigative and judicial systems in the state of Florida.

Now, we have found more evidence from inside Scientology that tends to corroborate testimony given by Marty Rathbun, formerly the second-highest ranking official in the church.

Rathbun testified to Scientology’s huge expenditures that were used to influence attorneys and judges as the church tried to undermine a criminal investigation and then a wrongful death lawsuit brought by the McPherson estate and attorney Ken Dandar.

Now, another former Scientology official says he watched that money drain from Scientology’s accounts from his position as a treasury secretary inside the church.

We talked with Mat Pesch (pictured), a former longtime member of Scientology’s elite “Sea Org,” who was the treasury secretary of the Flag Service Organization (FSO), which operated Scientology’s spiritual mecca in Clearwater, Florida (known as the “Flag Land Base”).

“I watched them drain $20 million in reserves for the Lisa McPherson fight,” Pesch tells us.


Pesch was treasury secretary from 1995 to 2002, and his job was to keep the books for the FSO, which operated Scientology’s most lucrative enterprise, the hotels and conference rooms of “Flag,” where all church members must come for upper-level training on their way up the “Bridge to Total Freedom.”

“FSO is the golden goose of Scientology,” Pesch tells us. When he started at his position in 1995, FSO was pulling in about $1.7 million a week in revenue, about $300,000 of that was kept by the FSO in a financial planning account that was used to pay for expenses and payroll, and FSO had about $20 million in reserves.

Lisa McPherson was a troubled church member who had a breakdown in 1995 and then died after a 17-day stay at Flag’s Fort Harrison Hotel. Some time passed before the circumstances of her death became generally known, and by 1997 Scientology was embroiled in a criminal state investigation, and McPherson’s estate had filed a civil wrongful death lawsuit.

As that battle heated up, Pesch says he was told the FSO reserves would be accessed by the Office of Special Affairs — Scientology’s legal affairs and intelligence wing that pays for attorneys, private investigators, and covert operations.

Pesch says he watched as OSA steadily drained away the entire $20 million in reserves.

When that ran out, he says, OSA turned to his financial planning account — the money that was being used to keep FSO running, and which came to about $300,000 a week.

OSA asked him to start turning over about $100,000 of it, and suddenly, Pesch had to find a way to operate the FSO on a smaller budget.

Sea Org workers — who sign billion-year contracts — were only getting paid about $40 to begin with, he says, but they had to take pay cuts in order to help FSO fund OSA’s efforts to wage the Lisa McPherson battle.

Pesch says OSA was probably also drawing on other accounts, but he is only personally familiar with FSO’s accounts, and had to siphon off $100,000 a week for OSA.

“You’re getting pretty desperate when you’re pulling feathers and drawing blood from your golden goose,” he says.

Then, OSA wanted more. “During one year near the end of my time in that job, they wanted $200,000 a week. And for that entire year, everyone at FSO got paid only $10 a week,” Pesch says.

The only exception? For a few weeks, all members were returned to full pay — about $40 — so that they could all contribute to a present for church leader David Miscavige.

It was something they did every year, and there was nothing volunteer about it.

“There’s someone at the pay window making sure you turned in a certain percentage of your weekly pay for David Miscavige’s birthday present,” Pesch says, and his wife, former Sea Org worker Amy Scobee, agrees.

Pesch estimates that about $60,000 for a present was raised. Then everyone was moved back down to $10 a week.

Based on what Pesch told us, as well as what we’re hearing from other former executives we’ve talked to, it may turn out that Marty Rathbun’s estimate — that Scientology spent up to $30 million to fight the McPherson case — is actually substantially less than what was actually spent.

We asked Pesch if OSA ever told him what the money was used for. He said they told him vague things about medical experts and attorneys.

But then, for two or three weeks, someone screwed up, and Pesch found that FSO was being billed directly for a couple of OSA operatives. The OSA employees were being paid $1,000 a week each, and Pesch paid that from FSO accounts for two or three weeks until the error was discovered. “It caused a huge flap,” Pesch says when the error came to light. Quickly, OSA took back the billing on the two operatives.

We asked him what the two operatives were doing, according to the paperwork he saw.

Pesch says the two people very clearly described as infiltrators of the Lisa McPherson Trust.

The LMT was a non-profit formed in 1999 by businessman Robert Minton to organize protests in Clearwater, Florida and raise awareness of the circumstances of Lisa McPherson’s death.

We talked today with two of its former members, Mark Bunker and Jeff Jacobsen, who each said they had always had some suspicions about some of the people who became attached to the group before it disbanded in 2001. But neither of them had heard that two church operatives were being paid a weekly wage to infiltrate the group.

Pesch cannot today recall the names of the two operatives on the paperwork he handled, and after checking with former OSA employees, we have no solid evidence about who those two operatives might have been. We will continue to look into it further.

Pesch says he does remember the talks that OSA would give to explain where FSO’s money was going. “The staff was told this was all an attack from the mafia, the police, Interpol, Germany. Any invented enemy they could think of was all behind this Lisa McPherson attack. So we were needed to work hard and make money, and OSA would defend the church,” he says.

The state’s criminal investigation was derailed in 2000 when medical examiner Joan Wood changed the cause of McPherson’s death from “undetermined” to “accident” — under improper influence of the church, Rathbun says today. The civil suit was settled in 2004, and Rathbun testified that Judge Robert Beach was improperly influenced by an attorney hired by Scientology.

On December 7, Ken Dandar, who is facing $1.1 million in sanctions requested by Scientology, will present evidence to federal Judge Virginia Covington that there is enough evidence of a conspiracy to subvert the state courts to grant him an injunction against those state sanctions. And we expect until that date for even more revelations about this complex case to break loose.

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