Scientology's 12 million dollar FACTNet-destroying "settlement deal" rejected!

Part One: Why FACTNet and its directors said NO to $12 million

I thought you should know why FACTNet, Arnie Lerma, Lawrence Wollersheim, and Bob Penny (current and former directors of FACTNet) rejected Scientology's recent $12 million settlement offer. I refuse to keep this information and my opinions about this information confidential because the general public and people who may be considering other Scientology settlement offers need to know what is going on behind closed doors.

It began with Scientology contacting me through an agent with the following story: "Senior Scientology executives REALLY want to settle with you, and you will not have to sign any gag order. This time, they will not bring you the same offers you have rejected before." From 17 years of experience with Scientology, I doubted that this was true, but just in case, I contacted my attorney who in turn contacted Scientology.

It turned out that Scientology was interested in a settlement. I went to L.A. for two days about eight weeks ago and met with Monique Yingling (of the law firm of Yingling and Yingling, Washington D.C.,), Marty Rathburn, and Mike Rinder. I went into meetings in good faith and at our expense because I knew that the conflict with Scientology was about to escalate to a level beyond anything anyone has seen before. Before that happened, I wanted to make at least one more good faith attempt to see if Scientology had changed, to know that I had done everything in my power to reach a JUST settlement.

In those initial two days of meetings, operational promises were made by both sides. First promised was that both parties were seeking peace, and that peace could only be honestly achieved by allowing each party dignity in the settlement. Secondly, all restrictions would be reciprocally and equally binding on both parties. And thirdly, negotiations would continue for settlement of the all pending and possible FACTNet and Wollersheim law suits. The non-negotiable payment from Scientology to us was to be $12 million. It was completely and absolutely clear to Scientology's representatives that no settlement negotiations would continue past the initial two days unless they agreed that $12 million was the settlement amount.

We continued to negotiate for the next four weeks. The basics of what Scientology sees in their minds as restrictions reciprocally and equally binding on both parties and a peace with dignity are as follows:

That the nonprofit free speech library and historic archive called FACTNet be taken off the Internet and closed forever.

That all FACTNet library databases containing electronic books, articles court decisions, government reports and former member debriefings about Scientology (or any other cultic organizations) contained in those databases be completely destroyed.

That a total gag order be agreed to by Bob, Arnie, and Lawrence so that they can never again speak out about Scientology.

That Bob, Arnie, and Lawrence are never again permitted to assist anyone in any manner trying to fight or expose Scientology.

That Bob, Arnie, and Lawrence are never permitted to testify at any legal proceeding or government investigation or serve as expert witnesses concerning Scientology without service of a real adverse subpoena.

That no money from the $12 million settlement go to anyone continuing to fight or educate in any way against Scientology.

That FACTNet return Scientology's court-submitted financial records and all copies of their "advanced trade secret" materials and non-original copyrighted materials.

That humiliating, false, and self-incriminating public statements be made to imply that the FACTNet research on Scientology's members going psychotic or attempting or committing suicide while involved with their bizarre initiation rituals is not credible.

That we falsely state in a public statement that FACTNet existed exclusively and solely for anti-Scientology activities.

That Vaughn and Stacy Young and Graham Berry be included in the total deal. (This would forever remove another experienced attorney from helping Scientology victims.)

And, as if the above were not enough, Scientology wanted to structure the deal so that only four or their many corporations, front groups, and covert operations would be bound by their single reciprocal restriction not to sue, malign, or attack Bob, Arnie, and Lawrence. (They repeatedly refused to include the soon-to-be-non-existent FACTNet in the reciprocal restrictions. This way they could kill FACTNet then cowardly attack a dead organization unable to defend itself.)

They wanted an "agreement violation" damage clause that could eventually amount to a flat penalty of $750,000 in damages against us every time they proved we have violated ANY term of the agreement no matter how inconsequentially and without showing any real damage to themselves.

And finally, while Scientology corporations and fronts not bound by this agreement could sue us back to the Stone Age for alleged violations or anything else they could and would dream up, we of course, are still bound by every single other term of the agreement as far as restricting us from speaking out or working against Scientology.

Part 2: Other Interesting things Scientology wanted or was concerned about.

Scientology wanted all the Hubbard family heirs' names included in our deal so that all probate actions to examine the fraudulent asset transfers away from the Hubbard family heirs to David Miscavige's and Starkey's control would be stopped (I wonder if the Hubbard Family heirs authorized Yingling to negotiate for them as their personal lawyer?)

Early on in the discussion, Scientology wanted a statement retracting all statements that Miscavige's mother-in-law's suicide/murder might have had any connection to David Miscavige or Scientology. They had no concern whatsoever over Lisa McPherson 's death and publicity. Initially, they were VERY concerned about having any more or new attention drawn to the alleged induced suicide/ murder of Miscavige's mother-in-law. They seemed most eager to bring this Flo Barnet settlement bonus back to David Miscavige.

Part 3: Other opinions and observations about the Scientology settlements negotiations and other matters:

The longer we stayed in the negotiations, the more restrictive the terms they added to the agreement. I had hoped that they would have done the exact opposite. I incorrectly believed they finally would get it and start to promote ethical settlements and building some peace for themselves, but given enough time they once again showed their real agenda.

Scientology has once again conclusively shown me it has not changed one iota from the entrapping Gerry Armstrong , Margie Wakefield, Flynn settlement strategies. In fact it has gotten worse in its settlement demands.

I consider Scientology's most recent $12 million settlement deal as nothing more than a trap and a lie concerning the original 2 day good faith agreement. Their settlement offer is inherently contrary to rational free speech and maintaining personal integrity, and socially would further their ability to do evil and harm others. Consequently there was no option but to reject it.

I have been in many settlement negotiations over the last 17 years with Scientology. Every one of them has been basically the same trap or lie. Because they have failed to learn or change I seriously doubt I will ever enter into any Scientology "settlement" negotiations again.

Scientology is now or soon will be trying to settle other litigation in the U.S. and around the world. I strongly recommend that anyone considering settlement with Scientology ignore all their settlement efforts. From everything I have experienced it is a waste of time and money. There is no real settlement possible with Scientology because in their minds, "it's either us or them" and they can't ever let go to make real peace so their wars never really end.

I am convinced the only way I or anyone else engaged in any litigation with them will ever get justice is through the enforcement of the courts. Ignore Scientology's settlement scams. They will never give you anything in a settlement that will allow you to live out your life with dignity. When you stop looking for Scientology to give you something and start taking justice and restitution through the enforcement of the courts, you will be on the right path.

Part 4: Scientology is in big legal trouble. That's why they were willing to pay $12 million, then called us repeatedly to restart the negotiations after we dropped them.

Scientology is now so desperate to get out of this disaster, they have moved to dismiss THEIR OWN trade secret claims in the FACTNet case. They are trying to keep their current leader, David Miscavige from having to appear in court. Their new dismissal motion is sheer organizational terror over the Hubbard/Miscavige probate death and asset fraud being exposed. Think about this rush to dismiss for a moment. They are moving to dismiss the very trade secret violation claims upon which they got a search and seizure order to raid FACTNet. Now also consider that Scientology has just mounted the most aggressive attack on our Hubbard estate probate lawsuit that I have seen in 17 years of litigation consulting on Scientology. Their PI's are investigating the senior partners of Music Peeler in search of intimidation material, and have threatened Music Peeler with millions of dollars in countersuits and damages if we dare to try to continue the probate law suit probe into the fraud surrounding the copyright and trade secret asset transfers out of the Hubbard estate. The more they threaten and attack you on an issue, the more they have confirmed that you are on the right track. They are desperately trying to hide another disclosure of their crimes. I hope Music Peeler has the integrity and courage to withstand a Scientology assault without seeking a way to cover tracks and back out of the case. If you can, send a fax to their management committee asking them not to be intimidated. 213-624-1376.)

Scientology is also desperate to dismiss their own claims in the FACTNet case because this is the only way they can block their fraud in the Lerma raid. They want to ensure no one can prove they don't own these copyrights and trademarks, and don't have legal standing to bring the cases. If FACTNet can bring the Hubbard/Miscavige asset fraud to court, Arnie Lerma would get all his court costs back, there would be a new trial for a huge damage award, and a lot of Scientology attorneys and executives would face stiff jail sentences for perpetrating massive fraud in U.S. Federal Court.

Scientology has tried to dismiss their own trade secret claims in other lawsuits like the Erlich case, once again, because they know that their trade secret and copyright asset transfer fraud is about to be exposed in the L. Ron Hubbard estate.

In spite of the fact that Scientology's copyrighted materials and trade secrets are being freely distributed all over the Internet and the world, Scientology has not filed any new copyright or trademark infringement lawsuits for a long time or gone on any more of the outrageous raids as it did to FACTNet and a few others. They know the copyright and trade secret fraud is going to be exposed in the existing legal lawsuits which they are trying to buy out or dismiss. If they can't buy off or sabotage the existing law suits, they certainly don't want anyone else to have any new potentially huge counter claims against them.

Scientology has almost never won a trial before a jury. They have a long history of one humiliating trial defeat after another. They know that they have created their own "worse possible legal nightmare scenario" in the FACTNet and other copyright and trade secret cases. They are worried about losing almost everything this time and they damn well should be.

Scientology really can lose almost everything in this one Internet copyright legal battle. I believe FACTNet will win and deliver real punishment though law to Scientology. Because of Scientology's own abuse, misuse, and fraud surrounding its claimed copyrights and trade secrets, the probable results of a FACTNet's court victory include:

1. A stinging defense of free speech, personal privacy, and libraries on the Internet with new high-tech legal precedents being set for all three areas.
2. Besides the copyright and trade secret transfer fraud with its criminal implications, an investigation into allegations that Scientology corporations have made false claims to the IRS in regards to the ownership of the Hubbard assets. With the asset fraud being exposed, a chain-reaction effect will impact Scientology's whole 1980's corporate reorganization and its status as a US religious, nonprofit, tax exempt organization.
3. The return of the copyright and trade secrets to the Hubbard family heirs, who could at least temporarily assume control of all of Scientology and maybe clean it up by really changing its management and criminal policies.
4. The return of the hundreds of millions of dollars stolen by Starkey and Miscavige to the Hubbard family heirs.
5. Public loss of most of Scientology's trade secret protection.
6. Public loss of most of Scientology's copyright protection.
7. The chain reaction crumbling of other lawsuits in which Scientology has sued people for trade secrets or copyrights violations.
8. Huge punitive damage awards against Scientology in all cases that Scientology has sued people for trade secrets or copyrights violations. (Anyone who has been sued by Scientology regarding trade secrets or copyrights should make sure they have counter-suits are filed.)
9. Scientology's inability to bluff or con former or current members into paying for materials which are not truly trade secrets or copyrights. Legitimacy will have to be proved at each level, from the original copyright creation and filing to all ownership transfers.
10. Scientology's inability to extort licensing fees from members on materials that are in the public domain.
11. Scientology's inability to use trade secrets or copyrights for religious persecution OR for enforcing religious purity or to establish a religious monopoly through perverting secular law.
12. Scientology's inability to crush religious reform movements of ex-Scientologists seeking to use what they obtained in Scientology in any way their religious free choice tells them.
13. A sea of outrageously bad worldwide publicity surrounding Scientology, entirely of its own making.
14. Many other chain-reaction free speech and privacy protecting effects unforeseen at this point.

Scientology has only one real solution, but is the solution they can never make because of their unalterable attack policy. If anyone on their team had any sense they would simply drop all their litigation and announce (like every religious group that eventually goes mainstream) a new era of tolerance for the religious and other opinions of former members and critics.

Part 5: This litigation is a huge opportunity for everyone concerned with Scientology's assault, but there are challenges because FACTNet is in big trouble too.

Scientology knows there is absolutely no possibility of settlement under the ridiculous terms it proposed. It must now act with even more legal and illegal intimidation in trying to accomplish what it has always been trying to do, the complete destruction of its effective FACTNet adversary.

FACTNet, Bob, Arnie, and Lawrence can expect no less than a total assault not seen since the worst days of Scientology's old Guardians Office. One of Scientology's lead attorneys Elliot Ableson already vowed to drive FACTNet and every one of its directors into personal bankruptcy if we did not accept an earlier similar settlement offer. I have no doubt that this is the continuing command intention of his Scientology employer. Scientology will not just attack FACTNet, Bob, Arnie, and Lawrence because it now knows if we refuse $12 million, we will fight. It now must attack the law firms representing FACTNet, and if that doesn't work attack the court to insure that FACTNet never gets to trial to expose their fraud. (Scientology has already accelerated its covert operations to intimidate and undermine the law firms representing FACTNet to force them in fear to find some passable reason to back out of FACTNet's defense.)

Besides attacking our law firms, Scientology's other main legal tactic will be their old tried and true tactic of simply running their adversaries out money. Scientology's "sue them to silence" tactics have forced the average case involving them to be a 3+ million dollar affair. (The Time Magazine case cost almost $7 million and FACTNet has already spent over $2 million exhausting all its insurance money.)

So far few have come to FACTNet's financial aid. Major news media, governments, and major corporations who have been attacked by Scientology are so intimidated by this group that they appear paralyzed in fear, as FACTNet with few assets stands up to this ruthless bully and draws the line in the sand.

In spite of repeated requests for financial help, FACTNet has seen little reaction from organizations advocating Internet and non-Internet free speech, privacy, and libraries, or from Scientology's former members or victims. Many stand frozen in fear of their former master's legendary retaliation, knowing well that FACTNet's legal actions could end Scientology's means to religiously persecute or "legally" harass former members. FACTNet has received financial and moral support from brave individuals and organizations who have a religious background and see Scientology as a great spiritual and social evil.

Scientology has always run on a policy of total war on any perceived adversary. It is time to counter Scientology's take-no-prisoners strategy. It is time to come together and stop the social evil of Scientology in its tracks. It is time because it MUST be time. It is time not to declare the insane total war on Scientology that it has declared on us; it is a time to declare the total defense of free speech until Scientology changes its behavior and drops its intimidation litigation.

FACTNet, Bob, Arnie, and Lawrence will make OUR FINAL STAND against the social and criminal evil called Scientology. We will never stop resisting Scientology's abuses because resistance for justice is both its own truth and its own reward.

Several directors already have put up their personal property to help finance the litigation. Who else will now come forward and be counted on to aid and support us? Who among you will publicly stand with us and break Scientology's grip on the Internet or on the lives of so many in the world?

We wonder what it will take for the rest of the world that knows Scientology's abuses to come to the moral, financial, and legal aid of last major nonprofit organization left actively supporting Scientology victims and resisting Scientology's unethical activities all over the world. Don't let Scientology get away with this just because they have more money than FACTNet and their other opponents. Please don't let FACTNet become the next Cult Awareness Network or another one of its many other casualties.

Part 6: Everyone can do something to become active in the growing global Free Speech Revolt to stop Scientology's ongoing abuses:

Boycott ALL products produced by Scientology's celebrity promoters, including John Travolta, Tom Cruise, and Kirstie Alley. Focusing on celebrities will help bring worldwide attention to Scientology's abuses.

Tell everyone what you know about Scientology and Dianetics abuses.

Picket Scientology and Dianetics organizations all over the world. Locations and picket information here.

Financially support the ongoing legal battle to protect the Internet against Scientology's assault. See also others who need your support.

Put our free speech revolt graphic on your web page (if you have one) and link it to our revolt page, as a sign of your Free Speech Revolt solidarity.

Download and preserve our site as insurance against Scientology destroying the FACTNet organization.

Register for our free newsletter so we can keep you informed of the latest events of this free speech battle.

FACTNet is committed to winning the litigation no matter what it takes. In spite of having run out of insurance money, FACTNet did the right thing when it turned down Scientology's $12 million deal to buy the organization out of existence. FACTNet's board, volunteers, and supporters are determined to persevere, but we cannot do it without you doing the right thing too. Come to our aid. Please make your generous donation today to FACTNet and forward this appeal to any other individual or organization you think can help us with financial or legal assistance.

I thank you in advance for supporting FACTNet in this financial emergency. I estimate we will only need another $250,000-350,000 to end and win this case. FACTNet will use your support effectively (To see how FACTNet put past donations to work see our tax returns and budget on our web page at www.factnet.org/budget.htm).

Lawrence Wollersheim
as an individual and co-founder of FACTNet

P.S. Please help get this to all parties who should know. Feel free to repost this to all the newgroups you think should have it.

Reader responses to FACTNet's rejection of $12 million

For more information see Emergency Briefing: All the facts on the Scientolology raid on Factnet and what the raid means to Internet users.

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