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Why Steve Fishman — of the notorious Fishman Papers — is today serving 21 years in prison


[Steve Fishman in the mid-1990s]

The preeminent academic studying Scientology, Dr. Steve Kent at the University of Alberta, recently set us on an interesting pursuit: Trace, he asked us, the effects of TIME magazine’s epic 1991 cover story on Scientology, “The Thriving Cult of Greed and Power.”

For some time now, we’ve been thinking about that question, making phone calls, and digging up records. The project appealed to us for a number of reasons, one of which was that we’d just spent a couple of years investigating the Paulette Cooper story, which spanned from World War II to the present day, but involved research mostly focused on the period 1968 to 1985. We’ve also spent a lot of time thinking about Scientology’s more recent history, after the year 2000, as a result of our work at the Village Voice and here at the Bunker. But we have some gaps in that intervening period, 1985-2000, that we were eager to fill in.

We’re still reading and searching and interviewing with no end in sight, but we thought we might come up for air after getting our hands on a fascinating document we thought you might want to see. And also so we can do a little crowdsourcing to help us get some ideas about where to go next.

We’ll try to do some very quick recapping for those of you unfamiliar with the period. If you have read our book, The Unbreakable Miss Lovely, you know that the FBI raided Scientology in 1977, finding a mountain of records detailing how Scientology’s “Guardian’s Office” had spent years infiltrating government offices, stealing documents, attempting to destroy people it considered enemies, and engaging in other nefarious acts carried out by an organization that acted more like a Cold War spy agency than a church. Eleven top Scientology officials eventually went to prison, including Mary Sue Hubbard, wife of Scientology founder L. Ron Hubbard.


Hubbard himself reacted by going into permanent hiding in 1980, and then he died in 1986. By then, a young executive by the name of David Miscavige had taken over, the Guardian’s Office had been replaced by the Office of Special Affairs, and later that year a young successful actor named Tom Cruise started his involvement and began to help with the church’s miserable public reputation. By 1990, we’ve been told by former Scientology executives, the church had rebounded from the death of Hubbard and was at its greatest extent, with about 100,000 active members around the world, and with its leader, Miscavige, determined to get Scientology tax-exempt status.


Then, on May 6, 1991, Richard Behar’s TIME magazine cover story hit Scientology like a ton of bricks. It wasn’t the only tough examination to hit Scientology at the time — a multi-part series by the Los Angeles Times the year before was another major blow to the organization — but with Behar’s story the church decided to draw a line in the sand. It sued TIME for $416 million, claiming that numerous statements in the article were libelous. Among them were claims by two people mentioned in the story, Steve Fishman and his psychiatrist, Uwe Geertz. Here’s the entire mention of them in the article…

Occasionally a Scientologist’s business antics land him in jail. Last August a former devotee named Steven Fishman began serving a five-year prison term in Florida. His crime: stealing blank stock-confirmation slips from his employer, a major brokerage house, to use as proof that he owned stock entitling him to join dozens of successful class-action lawsuits. Fishman made roughly $1 million this way from 1983 to 1988 and spent as much as 30 percent of the loot on Scientology books and tapes. Scientology denies any tie to the Fishman scam, a claim strongly disputed by both Fishman and his longtime psychiatrist, Uwe Geertz, a prominent Florida hypnotist. Both men claim that when arrested, Fishman was ordered by the church to kill Geertz and then do an “EOC,” or end of cycle, which is church jargon for suicide.

Not only was this passage among the 12 Scientology singled out when it sued TIME, but Scientology also filed a separate libel lawsuit against Fishman and Geertz. Geertz ended up being represented by Los Angeles attorney Graham Berry (which in itself is a fascinating tale, which we won’t tell now), but Fishman, who was released from prison in 1992, was representing himself. Scientology said that Fishman’s statement in TIME was untrue in part because Fishman was not the longtime Scientologist he made himself out to be, and he had not engaged in his stock fraud scheme on behalf of the church. Fishman felt that he needed to prove that he was a longtime member of the church, so he came up with the idea of posting as a court exhibit Scientology’s upper-level “OT” teachings. If he wasn’t a longtime Scientologist, he argued, how would he have access to Scientology’s most secret materials?

Was Fishman telling the truth? Well, if you’ve read his online book “Lonesome Squirrel” — and we did, recently — you may come away from that work thinking that as early as 1979 Fishman was a covert operative for the Guardian’s Office and later the Office of Special Affairs who was defrauding companies on orders from his church superiors so he could pay for his Scientology courses. Or, as we did, you come away thinking that “Lonesome Squirrel” may be the single greatest parody of Scientology ever written. Like on a genius level. (And yes, we mean that. It’s stunningly brilliant on multiple levels. It’s also shockingly misogynistic, so beware.)

Actual longtime Scientologists will tell you that the material in that book, as well as Fishman’s statements on his notorious set of videos (recorded by his attorney to prove to the court that Fishman was a lunatic) prove that Fishman was never a Scientologist, but a nutcase who had amassed a huge library of Scientology materials which he studied closely so he could talk as though he knew what he was talking about — at least to the uninitiated. And once you understand that and read “Lonesome Squirrel” as fiction, you start to see what a satire Fishman was doing on Scientology belief.

Fishman claimed that Scientology auditing helped him remember that in a past life he had stalked the Virgin Mary and, while spying on her, he’d masturbated into the pond where she was bathing and his sperm somehow found its way into her, inseminating her — making him, in fact, the father of Jesus Christ. By revealing that he had been “Malchoot the Antichrist,” Fishman claimed that in this lifetime he was asked by L. Ron Hubbard to help “deChristianize” the world for Scientology.

As we began reading “Lonesome Squirrel,” we realized that some of the people named in it have, 20 years later, come out of the church. So we reached out to them and they confirmed for us that nothing in the book associated with them actually happened. “Lonesome Squirrel” is an incredibly creative work of fiction that has enough actual names and locations and quotations from L. Ron Hubbard’s work that it has a veneer of authenticity. But it’s about as authentic as one of Fishman’s bizarre and offensive similes about women and their body parts. (If you’ve read it, you know what we’re talking about.)

Anyway, whether Fishman was telling the truth or not, the important point for posterity’s sake is that Scientology failed to notice that Fishman had filed the church’s most pricey secrets in an open court file. Months later, thanks to Arnie Lerma, Karin Spaink, and many others, those OT materials got out to the Internet and the wider world, and Scientology was unable to put the genie back in the bottle. The “Fishman Affidavit” or the “Fishman Papers” became synonymous with Scientology’s struggle against the Internet in the 1990s, and to this day Fishman’s court file has a legendary status for Scientology watchers.

But what happened to Fishman?

Scientology dropped its lawsuit against Fishman and Geertz after Fishman filed his affidavit and after Graham Berry served subpoenas on numerous Scientology celebrities at a Christmas event. The lawsuit against TIME, meanwhile, was dismissed.

But then Scientology sued Lerma and Spaink and others for disseminating the Fishman Papers online in 1995, and Fishman traveled to Europe to testify on Karin Spaink’s behalf. A Dutch news story at the time said that Fishman had been working at a nursing home, but then had lost that job after it became known that he was a convicted felon. You can also find posts from alt.religion.scientology in 1996 where Fishman is defending the authenticity of his stories in Lonesome Squirrel.

But after that, Fishman got into another scene.

According to the federal government, from 1998 to about 2005, Fishman was a key player in a classic fraud operation that suckered investors out of millions of dollars by convincing them that 150-year-old railroad bonds were worth billions.

The bonds, issued in the 1850s by the long-defunct Galveston, Houston and Henderson Railroad, were actually worthless, except as collector’s items. But the several men who made up the “Caribou Capital Corporation” gave astounding assurances to potential investors about what those old bonds could yield once their overseas agent somehow put the bonds in play in European securities markets: “It was represented that an investment of $100,000 to participate in the profits from one 1855 $100 face value ten percent GH&H historic bond would yield profits of $1,100,000 per week for forty weeks, for a total return in a year or less of $44,000,000.” The investors were even assured that they could get their entire investment back within 60 days if they changed their minds.

The scheme also made use of shill investors (“authenticators”) who made assurances about their own huge profits in the scheme — one investor claimed that a single $500 railroad bond could ultimately be worth $15 billion.

The conspirators further bolstered their story by representing that the Florida Supreme Court had secretly issued an opinion, being kept under seal in chambers, which established the validity of the bonds. They also assured prospects that the United States government had assumed the railroad’s obligation for the bonds following the Civil War, and that the obligation represented by the bonds was still a “live” debt backed by the Federal government.

When money didn’t start pouring in, the members of the conspiracy had to placate investors, telling them they could also invest in bonds issued by the Republic of China in 1913 that the current government would have to honor, and coming up with other ways to stall them as no profits at all actually materialized.

In a document that describes the scheme in significant detail, the roles that different people played is spelled out. One of them was the gladhanding salesman. Another played the part of the overseas agent who supposedly had access to European markets. But the government said the nucleus that held it all together was Steve Fishman.

Mr. Fishman drafted and furnished documents, consulted with investors both before and after investment, traveled to Europe with Mr. Thornburgh to meet with Henriette and supposed bank contacts, hosted at least one meeting of investors at his home, drafted and furnished lulling progress reports, provided bonds, picked up bonds from escrow, supplied the names of “authenticators,” and sold or attempted to sell both railroad and Chinese bonds.

Fishman raised several objections to his prosecution, claiming that once he learned the scheme was under investigation in 2002, he dropped out of it and even cooperated with the government. But an appeals court disagreed, saying Fishman was still participating for several more years, and was never promised immunity.

In October 2009 in a federal court in Tulsa, Oklahoma, Steve Fishman was sentenced to 21 years in prison on charges of wire fraud and money laundering. Now 65, he is being housed at the low-security men’s facility on Terminal Island in San Pedro, California. He’s scheduled to be released on October 28, 2028.

In 2011, an appeals court upheld Fishman’s conviction and sentence, and it’s that document which gave us such a detailed look at the fraud scheme. Once we obtained it, we thought you’d want to see it.

But we still have a long way to go on our project, and we are looking for some guidance from the experts in our commenting community. Having read Lonesome Squirrel, we have to wonder about Fishman’s assertion that he obtained OT 1 through 7 for his affidavit from Sea Org member Ellie Bolger, and original OT 8 from Richard Ofshe. (As for the authenticity of that OT 8 material, which the church long said was a hoax, we now believe that it was, in fact, authentic.)

Could there be another source for those OT levels? And do the specific levels Fishman put in his affidavit still hold up today, or were they approximations? We’d love to hear from some tech experts on the various versions of the secret teachings put on line and when. Before we move on to how Lerma and Spaink and others were affected by making these materials available to the rest of the world, we’d like to settle some of these questions. (And yes, we’ll be dropping a line to Fishman himself to see if he’s interested in helping us out.)

Here’s that appellate order…


Steve Fishman Appeal, 2011

Steve Fishman will forever have a significant place in the history of Scientology. But it’s a shame that he couldn’t use some of his creative math and writing skills for something more productive.


Jonny Jacobsen checks in on the Russia development

Naturally, we’ve been getting a lot of email with reports out of Russia that equipment seized in a January raid has the government accusing Scientology of spying on its customers. (Shocking, we know.) We asked our man in Paris, Jonny Jacobsen, for his thoughts, and he sent us this…

I had a brief exchange about this on Twitter the other day when someone tipped me off to the original Russian story. So far as I can tell (from the dodgy coverage in the Russia media) they are being accused of spying on their clients. It rather sounds as if they have been secretly recording auditing sessions — hardly a first.

Bunker regulars will recall that it was a similar situation last year, when Scientology’s St Petersburg offices were raided. There again, they were being accused of being engaged in just the kind of fraudulent activities we know they have carried out elsewhere. So far as I know, we are still waiting for that case to come to court.

And it is reasonable to ask whether the defendants will get a fair trial if either case comes to court. This is Russia, after all: three times condemned by the ECHR for its treatment of Scientology. And it has form when it comes to bending the rules to put “undesirables” behind bars.

— Jonny Jacobsen


Miss Lovely on parade

Miss Lovely pays a nighttime visit to the mission in Houston — perhaps the largest city in the western world with only a mission and not an org.




We didn’t get a chance to include photos in our book, so we’ve posted them at a dedicated page. Reader Sookie put together a complete index and we’re hosting it here on the website. Copies of the paperback version of ‘The Unbreakable Miss Lovely’ are on sale at Amazon. The Kindle edition is also available, and shipping instantly.

Tony Ortega’s upcoming appearances (and check out the interactive map to our ongoing tour)…

August 24: Boston, Boston Skeptics in the Pub, Hong Kong restaurant (1238 Massachusetts Avenue, Cambridge) 7 pm (with Gregg Housh)

Sept 15: Barrett the Honors College, Arizona State University, ASU in Downtown Phoenix campus, Walter Cronkite Theater, 5:30 pm

Sept 23: Cleveland, Parma Heights Library, 7pm sponsored by Center for Inquiry – Northeast Ohio

Sept 24: Minneapolis

Sept 27: Portland

Sept 28: Seattle, Razzi’s Pizzeria, 7 pm, with Seattle Skeptics and Seattle Atheists

Sept 29: Vancouver, BC, Seven Dining Lounge, 7 pm

Oct 23: Sydney, Giant Dwarf Theatre (with Sen. Nick Xenophon)

Oct 25: Melbourne

Oct 28: Adelaide (with Sen. Nick Xenophon)

Oct 30: Perth

Past dates: Santa Barbara (5/16), Hollywood (5/17), Orange County (5/17), San Diego (5/20), San Francisco (5/22), New York (6/11), Chicago (6/20), Toronto (6/22), Clearwater (6/28), Washington DC (7/12), Hartford (7/14), Denver (7/17), Dallas (7/20), Houston (7/22), San Antonio (7/24), Austin (7/25), Paris (7/29), London (8/4)


Posted by Tony Ortega on August 19, 2015 at 07:00

E-mail your tips and story ideas to tonyo94 AT gmail DOT com or follow us on Twitter. We post behind-the-scenes updates at our Facebook author page. Here at the Bunker we try to have a post up every morning at 7 AM Eastern (Noon GMT), and on some days we post an afternoon story at around 2 PM. After every new story we send out an alert to our e-mail list and our FB page.

Learn about Scientology with our numerous series with experts…

BLOGGING DIANETICS: We read Scientology’s founding text cover to cover with the help of LA attorney and former church member Vance Woodward

UP THE BRIDGE: Claire Headley and Bruce Hines train us as Scientologists

GETTING OUR ETHICS IN: Jefferson Hawkins explains Scientology’s system of justice

SCIENTOLOGY MYTHBUSTING: Historian Jon Atack discusses key Scientology concepts

PZ Myers reads L. Ron Hubbard’s “A History of Man” | Scientology’s Master Spies | Scientology’s Private Dancer
The mystery of the richest Scientologist and his wayward sons | Scientology’s shocking mistreatment of the mentally ill
The Underground Bunker’s Official Theme Song | The Underground Bunker FAQ

Our Guide to Alex Gibney’s film ‘Going Clear,’ and our pages about its principal figures…
Jason Beghe | Tom DeVocht | Sara Goldberg | Paul Haggis | Mark “Marty” Rathbun | Mike Rinder | Spanky Taylor | Hana Whitfield


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