Scientology’s Flag Land Base lost money in 2020? We beg to differ.

 
Six years ago we wrote about government data that researcher RM Seibert uncovered showing without a doubt that Scientology was abusing “R-1” religious visas in order to bring indentured servants to its “Sea Org” operations.

Enticing people to come from places like Russia, Italy, Mexico, and Hungary, Scientology was bringing them into the country under the special visa, which is supposed to be reserved for people coming to do “religious” work. Instead, these people were doing menial labor at Scientology’s bases, with their passports confiscated and no way to leave the organization.

On September 8, New York magazine took Seibert’s data and really ran with it, producing a lengthy story that included interviews with several former Scientology workers who talked about coming to this country under deceptive terms by the church.

It’s a well-researched and well-written piece. But one statement in it really made us do a double-take. The article said that in 2021, Scientology had joined complaints of other organizations that the pandemic had resulted in a government slowdown of new visa approvals:

“There is good reason to suspect that this slowdown has strained the operations and finances of the church. Financial documents recently made public show that its main Florida base lost money in 2020.”

Say what? The Flag Land Base lost money?

You have to understand something about Scientology’s structure to understand why this statement hit us as so stunning, and, frankly, unlikely.

The way Scientology is set up, Scientologists from around the world, no matter where they are, must ultimately travel to Clearwater, Florida to its spiritual mecca, the “Flag Land Base,” in order to move to the higher levels of the “Bridge to Total Freedom.”

As a result, “Flag,” as it’s known, is the real financial engine of Scientology. People like Mat Pesch, who worked in finance at the base, have said that Flag was regularly taking in one or two million dollars a week, and that Flag took in more money in a year than the rest of the worldwide Scientology organizations combined.

It is hard to imagine that Flag, even in Scientology’s leaner years, was actually losing money.

So what was New York magazine talking about? The statement in the article had a link that led to the year 2020 IRS 990-T filing for the Church of Scientology Flag Service Organization.

FSO is the Scientology entity that runs the Flag Land Base. It is a tax exempt organization, one of many Scientology subsidiaries that was granted that status by the IRS in 1993. As a result, FSO is not required to file an annual tax return with the US government.

However, even tax exempt organizations like churches are required to file what’s called a “990-T” form for what is known as “unrelated business income.” And since 2006, a change in the law required those organizations to make their 990-T forms available for public view.

So, in other words, churches can still keep their finances secret, but if they receive business income for things unrelated to their exempt activity, they have to report it.

So, for example, if a church rented out its parking lot for a concert or something, and was paid for it, they would have to report it on a 990-T. And for the most part, if you were investigating the finances of that church, what it took in for renting out its parking lot would probably not be all that relevant.

And that’s also the case with Scientology. We first started talking about 990-T forms filed by Scientology organizations back in 2014 when we realized that there was something else about 990-T forms that we did find very relevant.

You see, when a church submits a 990-T and lists how much “unrelated” income it received, it also has to fill in a little box that is called “book value.” In other words, while the church is telling you how much it took in to rent out that parking lot, it also has to estimate how much the church itself is worth.

We found this very, very interesting in regards to Scientology entities. And so did Alex Gibney. He used the information we had found in Scientology’s 990-T forms for his 2015 HBO documentary “Going Clear,” pointing out that Scientology, even with its small membership, is worth several billion dollars.

OK, so getting back to the FSO and that statement by New York. The magazine had linked to FSO’s most recent 990-T, which showed a loss of $1,914 in taxable income.

But remember, that’s “unrelated business income,” and so what it tells us is that Flag lost a small amount of money in 2020 of “unrelated” income, which really isn’t as important as its main work of fleecing Scientologists coming to get their upper levels. In previous years, FSO had been reporting unrelated yearly income of about $200,000, which is chickenfeed for an organization taking in $50 to $100 million a year from upper-level Scientologists.

FSO is under no obligation to reveal what happened to its main income in 2020, when the pandemic forced it to shut down, at least for some time. (Our sources indicated that church leader David Miscavige did keep the place open using an elaborate quarantine and disinfection regimen.) While it’s possible that the pandemic had a significant effect on that main income, we just can’t tell from the 990-T form, which doesn’t reflect it.

And in fact, that 2020 form actually shows that FSO’s book value has ballooned, not shrunk. For the first time since 2008, (the earliest 990-T form for FSO we’ve seen) the organization has gone above a book value of $300 million.

 
Yes, the 990-T form for 2020, while showing that FSO did lose $1,914 in unrelated, taxable income, also revealed that FSO is now worth an overall $316,439,546.

The Flag Land Base, at least through 2020, was not losing value.

Since then? We expect the pandemic has hurt Scientology in a big way, and we’ll be very interested to see what it’s done to the book value of FSO. The organization’s 2021 report ought to be due in another month or so.

 
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Technology Cocktail

“The Thetan in this universe has begun to consider himself mest and has begun to consider himself mass and the being that considers himself mass of course responds to the laws of electronics and the Laws of Newton. He is actually incapable of generating very much or as-ising very much. An individual considers himself mesty or massy and therefore he has to have a second terminal. A second terminal is required to discharge the energy.” — L. Ron Hubbard, 1971

 
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Now available: Bonus for our supporters

Episode 13 of the Underground Bunker podcast has been sent out to paid subscribers: We’ve kept in touch with Jesse Prince since his 2018 memoir came out, and we knew he’d have some surprising things to say about Scientology. Meanwhile, we’ve made episodes 1 through 12 available to everyone, with such guests as Paulette Cooper, Michelle ‘Emma’ Ryan, Jefferson Hawkins, Patty Moher, Geoff Levin, Pete Griffiths, Sunny Pereira, Bruce Hines, Jeffrey Augustine, and Claire Headley. Go here to get the episodes!

 
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Now with no restrictions: Our podcast series on the Scientology docuseries that never aired

In five episodes, we recently looked at something we’ve been curious about for several years: The potentially explosive television show, produced by Sirens Media, that would have featured L. Ron Hubbard great-grandson Jamie DeWolf as its presenter, and that would have taken an active look at the families ripped apart by Scientology’s “disconnection” policy. Unfortunately, even though the series was ready to air on the A&E network in 2016, it never has. Our podcast series turned out even better than we were hoping, and we’ve made all five episodes available to everyone.

 
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Source Code

“And by the way, anybody who had sexual relationships with a little boy ought to be killed! The idea! Horrible! Why that’s the most disgusting thought he’s ever heard. What? Sexual relationships with a little boy? Oh, no. Except in the DED you find him taking a little boy and driving the little boy up to sexual enthusiasm, up, up, up, up, up and the little boy just can’t give any more, and so forth, and on the last jolt of demand on the part of the thetan, the little boy who actually did have a thetan in him anyhow, goes PANG. And it goes straight down to 0.0. BzzzUm. And that’s why being a body is death of a body, is thetan into the body. That’s 0.0. Death of the body is being the body. And you’ll find him having his most enjoyable times thereafter as a little boy. He, he’s doing a super life continuum for this little boy. And this little boy bit the dust and was chewed up and spat out maybe 70, 60, 30 trillion years ago.” — L. Ron Hubbard, September 23, 1952

 
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Avast, Ye Mateys

“COURTESY: Usually on Flag we are very polite to everyone. It is a standard of courtesy and an example we should work to maintain.” — The Commodore, September 23, 1970

 
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Overheard in the FreeZone

“We are not all OT so we need each other. The Org Board is the Props of the Bridge. Millions need to walk this Bridge. Who’s gonna hold it, or better say WHAT’s GONNA HOLD IT? World going down… Zombies is the end product of this civilization… Will you take it or allow it to happen? Live in a world full of Zombies? Imagine the ideal scene: Thousands working together, thousands of aware thetans like you and me. Thousands, not hundreds… That’s what I am aiming for… And they all have one thing in common: A strong conviction they are immortal beings. Those are the ones I want. Aware Thetans. The world is going down fast now… we have been losing all the way. There comes a guy who says: Admin is completely out… Too few get it. Other-intentionedness… a disease worse than COVID-19. As long as I am keyed out I am going to post so You, yes You, see this and Re-cognite!! Maybe new people, fresh in mind and mental vigor need to get to know Scientology. At least you can help with that.”

 
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Past is Prologue

1998: Bob Minton reported that Scientology picketers were removed from the Columbus airport by the State Police. “Three public Scientologists decided to picket us as we went to our gate at the Columbus airport. The three Scientologists were, of course, being handled by their OSA Spontaneity Supervisor. It is possible that she is Diane Stein, the DSA Atlanta who called Stacy’s mother and was on the scene for the picket of Stacy’s sister’s house in Atlanta. We explained to airport security that it was against FAA regulations for this type of unlawful assembly and demonstration to occur on FAA property. Airport security called for the state police, who didn’t seem to be aware of FAA regulations on this subject, but nevertheless made the picketers put down their signs and escorted them from the airport, much to the OSA woman’s dismay. One of the three presumably public Scientologists called me a coward, whereupon I asked him if he was familiar with the Thetan Hand Technique. He had no idea what I was talking about.”

 
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Random Howdy

“How many Scientologists are left in the world who would stand up and say ‘I’m proud to be a Scientologist!’”

 
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Full Court Press: What we’re watching at the Underground Bunker

Criminal prosecutions:
— Danny Masterson charged for raping three women: Trial scheduled for October 11.
— ‘Lafayette Ronald Hubbard’ (a/k/a Justin Craig), aggravated assault, plus drug charges: Grand jury indictments include charges from an assault while in custody. Arraigned on August 29.
— Jay and Jeff Spina, Medicare fraud: Jay sentenced to 9 years in prison. Jeff scheduled to be sentenced on Oct 28.
— Rizza Islam, Medi-Cal fraud: Trial scheduled for October 24 in Los Angeles
— David Gentile, GPB Capital, fraud: Next pretrial conference set for September 19.
— Yanti Mike Greene, Scientology private eye accused of contempt of court: Found guilty of criminal and civil contempt.

Civil litigation:
— Baxter, Baxter, and Paris v. Scientology, alleging labor trafficking: Complaint filed April 28 in Tampa federal court, Scientology moving to compel arbitration. Plaintiffs filed amended complaint on August 2.
— Valerie Haney v. Scientology: Forced to ‘religious arbitration.’ Selection of arbitrators underway. Next court hearing: February 2, 2023.
— Chrissie Bixler et al. v. Scientology and Danny Masterson: Appellate court removes requirement of arbitration on January 19, case remanded back to Superior Court. Stay in place, next status hearing October 25. Scientology petitioning US Supreme Court over appellate ruling.
— Brian Statler Sr v. City of Inglewood: Third amended complaint filed, trial set for December 6.
— Author Steve Cannane defamation trial: New trial ordered after appeals court overturned prior ruling.
— Chiropractors Steve Peyroux and Brent Detelich, stem cell fraud: Lawsuit filed by the FTC and state of Georgia in August, now in discovery phase.

 
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THE PROSECUTION OF DANNY MASTERSON

We first broke the news of the LAPD’s investigation of Scientology celebrity Danny Masterson on rape allegations in 2017, and we’ve been covering the story every step of the way since then. At this page we’ve collected our most important links, including our four days in Los Angeles covering the preliminary hearing and its ruling, which has Danny facing trial and the potential sentence of 45 years to life in prison.

SCIENTOLOGY: FAIR GAME

After the success of their double-Emmy-winning, three-season A&E series ‘Scientology and the Aftermath,’ Leah Remini and Mike Rinder continue the conversation on their podcast, ‘Scientology: Fair Game.’ We’ve created a landing page where you can hear all of the episodes so far.

LEAH REMINI: SCIENTOLOGY AND THE AFTERMATH

An episode-by-episode guide to Leah Remini’s three-season, double-Emmy winning series that changed everything for Scientology watching. Originally aired from 2016 to 2019 on the A&E network, and now on Netflix.

SCIENTOLOGY’S CELEBRITIES, from A to Z

Find your favorite Hubbardite celeb at this index page — or suggest someone to add to the list!

 
Other links: SCIENTOLOGY BLACK OPS: Tom Cruise and dirty tricks. Scientology’s Ideal Orgs, from one end of the planet to the other. Scientology’s sneaky front groups, spreading the good news about L. Ron Hubbard while pretending to benefit society. Scientology Lit: Books reviewed or excerpted in a weekly series. How many have you read?

 
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THE WHOLE TRACK

[ONE year ago] Scientology donor and promoter, OT 8 Greg Winteregg, fails his postulate
[TWO years ago] Now that Scientology mega-donor Trish Duggan is famous, will the ditched-kid story blow up?
[THREE years ago] Leah Remini mourns the estranged father who denounced her on behalf of Scientology
[FOUR years ago] Scientology’s private cruise ship had a fitful history before becoming a floating cathedral
[FIVE years ago] Director Paul Haggis pens an open letter to Marty Rathbun after Scientology’s latest smear
[SIX years ago] Beware, protesters: Scientology has been training attack dogs at a Clearwater warehouse
[SEVEN years ago] We’re in Cleveland today to talk about Scientology and you’re invited
[EIGHT years ago] NARCONON DENIED: Damaging Oklahoma report on Scientology rehab facility will be turned over
[NINE years ago] LEAH REMINI: Scientology Wants Me to Fail on Dancing With The Stars
[ELEVEN years ago] The Top 25 People Crippling Scientology, No. 4: Tom Cruise

 
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Posted by Tony Ortega on September 23, 2022 at 07:00

E-mail tips to tonyo94 AT gmail DOT com or follow us on Twitter. We also post updates at our Facebook author page. After every new story we send out an alert to our e-mail list and our FB page.

Our new book with Paulette Cooper, Battlefield Scientology: Exposing L. Ron Hubbard’s dangerous ‘religion’ is now on sale at Amazon in paperback and Kindle formats. Our book about Paulette, The Unbreakable Miss Lovely: How the Church of Scientology tried to destroy Paulette Cooper, is on sale at Amazon in paperback, Kindle, and audiobook versions. We’ve posted photographs of Paulette and scenes from her life at a separate location. Reader Sookie put together a complete index. More information can also be found at the book’s dedicated page.

The Best of the Underground Bunker, 1995-2021 Just starting out here? We’ve picked out the most important stories we’ve covered here at the Underground Bunker (2012-2021), The Village Voice (2008-2012), New Times Los Angeles (1999-2002) and the Phoenix New Times (1995-1999)

Other links: BLOGGING DIANETICS: Reading Scientology’s founding text cover to cover | 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 | Shelly Miscavige, 15 years gone | The Lisa McPherson story told in real time | The Cathriona White stories | The Leah Remini ‘Knowledge Reports’ | Hear audio of a Scientology excommunication | Scientology’s little day care of horrors | Whatever happened to Steve Fishman? | Felony charges for Scientology’s drug rehab scam | Why Scientology digs bomb-proof vaults in the desert | PZ Myers reads L. Ron Hubbard’s “A History of Man” | Scientology’s Master Spies | 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

Watch our short videos that explain Scientology’s controversies in three minutes or less…

Check your whale level at our dedicated page for status updates, or join us at the Underground Bunker’s Facebook discussion group for more frivolity.

Our non-Scientology stories: Robert Burnham Jr., the man who inscribed the universe | Notorious alt-right inspiration Kevin MacDonald and his theories about Jewish DNA | The selling of the “Phoenix Lights” | Astronomer Harlow Shapley‘s FBI file | Sex, spies, and local TV news | Battling Babe-Hounds: Ross Jeffries v. R. Don Steele

 

Tony Ortega at The Daily Beast