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From: ronthewarhero@yahoo.co.uk (Chris Owen)
Newsgroups: alt.religion.scientology
Subject: Scientology in the UK: a status report
Date: 2 Feb 2002 07:24:29 -0800
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Four years ago this week, I had a look at the Companies House files on
Scientology's corporate entities in Britain. I went back there this
week to see how things have changed. For anyone wanting to convert
the figures below into dollars or euros, the current exchange rates
are £1 = $1.41270 and £1 = EUR 1.63403.
Scientology's corporate structure in the UK
===========================================
Scientology in the UK is represented by seven corporate entities that
I know of:
* Church of Scientology (England and Wales)
* Church of Scientology Mission of Poole
* Church of Scientology Religious Education College Incorporated (aka
COSRECI)
* Dianetics and Scientology Mission of Bournemouth Limited (aka DSMBL)
In addition, a number of associated "front groups" also exist:
* Association for Better Living & Education
* Hubbard College of Administration (aka HCA)
* Greenfields Educational Trust
* Hubbard College of Administration (aka HCA)
* Narconon London
* Nesta Investments Ltd
* SOR Services (UK) Ltd
Compared with only a few years ago, however, it's clear that a pretty
severe winnowing has occurred. All of the following are now
dissolved, most between 1992-95:
* Church of Scientology Mission of Brighton Ltd
* Church of Scientology Mission of Leeds Ltd
* Church of Scientology Mission of York Ltd
* Church of Scientology of California
* Church of Scientology of the United Kingdom
* Dianetics and Scientology Mission of Chichester
* Dianetics and Scientology Mission of Southampton
* Dianetics Association Limited
* Hubbard Association of Scientologists Ltd
* Hubbard Explorational Company Ltd
* Scientology Library and Research Ltd
* Scientology Publications Ltd
There were also a number of unincorporated missions around the country
which no longer exist. Some of this represents tidying up (the
Hubbard Association of Scientologists Ltd was inactive for many years
prior to being put out of its misery in 1994), some represents
consolidation (as in the case of the Mission of Brighton - now part of
COSRECI) and some represents genuine failures (as in the case of the
Missions of Chicester, Leeds, Southampton and York, none of which now
exist).
The main Scientology body in the UK is COSRECI, a South Australian
corporation set up on 19 October 1976 which began activities in the UK
on 1 May 1977. It took over management of UK Scientology from the
Church of Scientology of California (which was subsequently
asset-stripped to prevent Larry Wollersheim from collecting his
settlement). It appears to have been set up as a vehicle for getting
back-door tax exemption in the UK, which was gained under reciprocal
UK-Australian tax rules.
COSRECI was probably only ever intended to be a temporary home for
Scientology's UK assets, until such time as charitable status under UK
law could be obtained. Church of Scientology (England and Wales) was
the intended recipient of this status (its statement of
incorporation constantly refers to it as "The Charity"). In 1999 the
Charity Commission rejected Scientology's application for charitable
status. As far as I know no appeal against this decision has yet been
lodged, or at least reported. In the meantime, Church of Scientology
(England and Wales) remains dormant.
One significant recent success for Scientology has been the
acquisition, in October 2000, of exemption from Value Added Tax (VAT,
the equivalent of the US General Sales Tax) which I assume was applied
to its members' "donations" and its own sales. Scientology had been
arguing about the issue with Customs & Excise and the VAT Tribunals
since at least 1974 but finally got its own way just over a year ago.
This means that, in terms of its tax privileges, it now has pretty
much the same privileges as have been awarded in the US. Charitable
status is the last major hold-out.
The Missions of Poole and Bournemouth are the last surviving
independently constituted orgs in Britain and have, I think, now
combined - the one at Bournemouth is no longer listed.
The others, in Birmingham, Brighton, East Grinstead, Edinburgh,
London, Manchester, Plymouth and Sunderland are all owned by COSRECI.
(One curiosity is that Scotland doesn't permit Scientology to call
itself a "church"; the Edinburgh org is officially and somewhat
ironically named the "Hubbard Academy of Personal Independence".) In
addition, there used to be a whole bunch of other missions around the
UK, at least 15; all are now apparently dead. Scientology's physical
footprint in the UK is now probably at its smallest since the 1970s.
Greenfields Educational Trust is the corporate name for Greenfields
School, the Scientology school in Sussex which uses Hubbard's
"educational technology". I haven't looked at its accounts yet. One
thing I have tried to find - in vain - has been some independent
assessment of the school's performance. It appears that it has so far
managed to avoid being subjected to a government inspection, unlike
virtually every other school in the county.
Narconon London is a new arrival. Quite how it relates to Narconon UK
(a separate organisation, and Scientology's only charitable entity) I
don't know - I'll have to look into this.
Nesta Investments and SOR Services (UK) are mysterious entities.
Nesta is actually the oldest Scientology entity in Britain, having
been established as long ago as 1962 for the purpose of the "holding
of investment properties". One of its three directors is listed as G.
R. Wilson, who I assume is Graeme Wilson of OSA UK. According to
Nesta's accounts for 2000, it's doing little actual business other
than a token £1,000 turnover in 1999 and 2000. COSRECI is revealed as
Nesta's major (only?) investor, holding £180,003 worth of shares.
Nesta is spending next to nothing but has major assets - in 2000,
£475,000 of fixed assets and another £393,346 of current assets. What
these assets are is not revealed by the accounts, but I suspect that
it's either some kind of market investment (perhaps in shares or
commodities), or otherwise Scientology's UK properties. The latter
would make sense - if a court case resulted in COSRECI's assets being
seized, the actual properties would thus be immune.
SOR Services (UK) is totally opaque. The COSRECI accounts reveal that
COSRECI holds £1000 worth of shares in SOR Services, whose business
activities are given as "provid[ing] bookkeeping services". It's been
suggested that SOR stands for Sea Org Reserve, Scientology's strategic
contingency fund, in which case SOR Services is presumably the body
which manages the UK element of the reserve. We already know from the
US IRS that there's a SOR Services (Cyprus) - Cyprus, like the UK
Channel Islands, is a well-known offshore haven for all kinds of murky
financial services.
COSRECI's accounts
==================
Scientology undoubtedly peaked in the UK in the late 1960s, when Saint
Hill was booming and Hubbard was still in residence. At that time,
the Saint Hill org alone was raking in over £50,000 a week - in the
year 1967-68, the Church of Scientology of California (as it was then)
recorded a total income of £1,076,018. In real terms that is probably
the most that Scientology has ever earned in the UK. 15 years later
in 1982, with the pound worth very much less, income was still only
£1,409,990. The figures have improved since then, with a major boost
in income following Hubbard's death in 1986. By 1988, turnover had
reached £5,262,466. It has remained at around the same level ever
since. The most recent figures show a turnover of £5,704,655 in 1999,
with an average turnover of £5,569,914 during the eight years between
1992 and 1999.
The figures in full are as follows (the returns for 1989-91 seem to
have been mislaid):
Year Turnover Expediture
1982 £1,409,990 £2,767,995
1983 £2,956,999 £2,750,005
1984 £2,630,541 £3,973,042
1985 £1,932,796 £2,332,860
1986 £2,781,407 £3,318,111
1987 £3,036,181 £2,147,901
1988 £5,262,466 £4,717,092
1989 ? ?
1990 ? ?
1991 ? ?
1992 £4,935,704 £6,661,193
1993 £5,026,035 £4,840,122
1994 £6,015,363 £5,523,557
1995 £5,678,380 £5,012,722
1996 £6,392,936 £4,518,250
1997 £5,652,482 £5,520,391
1998 £5,153,760 £5,411,336
1999 £5,704,655 £5,951,708
As the figures show, turnover and expenditure have been very close for
many years, with expenditure frequently exceeding income. However,
COSRECI is relatively asset-rich - in 1999 it had £10,071,267 in fixed
assets and £4,769,365 in current assets, as against liabilities of
£1,045,809 owed to creditors. This resulted in a net figure of assets
less liabilities of £13,794,823. COSRECI clearly has considerable
resources behind it.
Between 1992 and 1997, the accounts gave the number of employees and
the wages bill. Dividing one by the other gives some indication of
how much they are being paid on average - not surprisingly, it's a
pittance, well below the national minimum wage and below even state
unemployment benefit. (Yes folks, you would be better off unemployed
than employed by Scientology.) Staff pay is normally the largest
single cost element of a business, but Scientology seems to have
avoided this particular problem:
Year Employees Wages Average wage
per
person per week
1992 453 £614,726 £26.10
1993 444 £596,492 £25.84
1994 445 £850,452
£36.75
1995 428 £667,826
£30.01
1996 426 £559,669
£25.26
1997 495 £600,935
£23.35
One curious aspect of the accounts is the huge amounts "due to
associated churches":
Year Assoc Churches
1982 £3,215,983
1983 £2,286,608
1984 £2,030,051
1985 £3,271,398
1986 £6,157,295
1987 £3,135,009
1988 £4,338,779
1989 ?
1990 ?
1991 ?
1992 £8,809,208
1993 £9,256,214
1994 £9,292,317
1995 £9,390,808
1996 £8,621,799
1997 £9,133,846
1998 £9,107,817
1999 £9,524,671
This presumably represents the flow of money to Scientology's overseas
entities, most likely the Church of Spiritual Technology which
formally owns Hubbard's works and "licenses" them to the rest of
Scientology. It's particularly noteworthy that the amounts "due to
associated churches" are considerably in excess of COSRECI's turnover
- typically between 130-180% of turnover. How is it financing this
deficit? A similar pattern, incidentally, exists in Narconon's
accounts - probably not a coincidence.
Scientology in Bournemouth
==========================
Only two Scientology missions in the UK have survived as independently
incorporated entities - those in the neighbouring towns of Bournemouth
and Poole on the south coast of England - but they appear to have
merged their operations, as the Bournemouth mission is no longer
listed as active by Scientology and all the action now seems to be in
Poole. The Dianetics and Scientology Mission of Bournemouth Limited
(aka DSMBL) was established in 1989 and started trading the following
year. However, it's evidently had a lot of financial problems. The
figures tell their own story:
Year Turnover Admin Exp Donations
Assets Less
Liabilities
1989 0 0 0 0
1990 £34,278 £48,855
1991 £172,683 £187,250
1992 £413,176 £515,757
0 £316,149
1993 £335,659 £726,382
£190,444 £613,768
1994 £684,057 £542,995
£211,430 £959,111
1995 £925,050 £665,491
£224 £1,267,872
1996 £425,075 £342,589
£52,878 £1,412,518
1997 £299,404 £226,636
£4,284 £1,415,203
1998
£598,632
1999
£980,314
The mission's turnover peaked in 1995 as a result of advance payments
made by its members, but at the same time it suffered an extraordinary
99.9% drop in the amount of "donations". It also overspent
considerably on several occasions and was clearly lacking in terms of
financial management; its auditors refer to poor auditing processes
operating within the mission. One consequence of this was a hefty
fine of £45,695 for late VAT registration. The result through the
mid-90s was a rapidly escalating deficit, peaking in 1997 at
1,415,203.
In 1998 the mission sacked its auditors and, taking advantage of a
provision in the Companies Act, began submitting only "abbreviated
accounts". These are the absolute minimum a company can get away
with submitting (and then only if it meets certain criteria).
Unfortunately - and probably deliberately - the accounts no longer
include such mundane things as turnover and expenditure, but they do
show the deficit. This showed a drastic improvement - reduced by
£816,571 - but how this was achieved is nowhere explained. The
financial problems have evidently not been resolved, as the deficit
ballooned again by nearly £400,000 the following year.
The number of employees and their wages are also given for the first
five years of the accounts - I've calculated the average weekly wages
per employee:
Year Employees Wages Wages Per
Employee
Per Week (52)
1989 0 0 0
1990 6 £5,540 £17.76
1991 21 £16,711 £15.30
1992 43 £59,685 £26.69
1993 60 £141,027 £45.20
Having posted these basic details, I'll post a separate analysis of
what I think they mean.
| Chris Owen - ronthewarhero@OISPAMNOyahoo.co.uk |
|---------------------------------------------------------------|
| THE TRUTH ABOUT L. RON HUBBARD AND THE UNITED STATES NAVY |
| http://www.ronthewarhero.org |