Features

CATS out of the bag

National | Anti-tax group had early links to the Church of Scientology

Issue: "Army's new MP's?," May 31, 1997

In the early fall of 1991 Atlanta businessman Ralph Regan participated in a local radio talk show dealing with abuses by the Internal Revenue Service and problems with the federal tax system. Shortly afterward, the 35-year old nurseryman received a call from Victor Krohn, the head of Citizens for an Alternative Tax System (CATS), who asked Mr. Regan to start up an Atlanta area CATS chapter. A few months later Mr. Regan resigned his post after discovering that CATS had been formed by David Miscavige, the leader of the Church of Scientology. Mr. Regan is now engaged in a campaign to persuade other evangelical Christians to steer clear of the anti-IRS group he believes is a front group for Scientology. WORLD's editors were unaware of CATS's history when they published an article quoting a CATS activist ("Taxing America's patience," April 12). Scientology combines aspects of Eastern religion (such as reincarnation), tales of space aliens, mind control practices, and a penchant for earning hundreds of millions of dollars. In a court filing, one of its many entities, the Church of Spiritual Technology, listed over half a billion dollars in annual income. Scientology's road to financial success began in 1950 with the publication of founder L. Ron Hubbard's Dianetics: The Modern Science of Mental Health. In the early 1970s the IRS demonstrated that Mr. Hubbard laundered millions of dollars through a dummy corporation in Panama and stashed the money in Swiss bank accounts. From 1967 until 1993 the IRS refused to grant the Scientologists a religious tax exemption. According to the U.S. Tax Court, the church was not tax exempt "because it was operated for a substantial commercial purpose" that benefited Mr. Hubbard, his family, and a few Scientology insiders. The denial of the tax exemption began what Scientologists call "the IRS war." In the early phases of the war, the IRS tax court cited Scientologists for falsifying records and burglarizing IRS offices. Mr. Hubbard's third wife, Mary Sue, and 10 other top Scientologists went to prison in the early 1980s for infiltrating, burglarizing, and wiretapping more than 100 private and government agencies. One of the strategies used by Scientologists in the later phases of the IRS war was to capitalize on public dissatisfaction with the IRS through the formation of two organizations designed to target IRS abuses and to eliminate the agency altogether. The first of these was the National Coalition of IRS Whistleblowers-which successfully drew attention to IRS abuses around the country. CATS, which has as its goal the substitution of a national sales tax for the income tax (and the subsequent elimination of the IRS), was the second. Both the Coalition and CATS were cited in a 1991 Better Business Bureau publication as "front groups for the church that is not a church." Plenty of evidence links Scientology with the early history of CATS:

**red_square** The formation of CATS was announced by David Miscavige in a cable TV program on Sept. 17, 1990. As Chairman of the Religious Technology Center, Mr. Miscavige was, and still is, L. Ron Hubbard's successor as the leader of the Church of Scientology. **red_square** Guest editorials appearing in newspapers around the country identified Mr. Miscavige as a "founding member" of CATS. **red_square** CATS's first address was the home of a Scientologist. **red_square** CATS ran a promotional advertisement in USA Today that was paid for by the International Association of Scientologists. **red_square** CATS received other logistical support, including preparation of pamphlets soliciting membership, from Scientology-linked groups such as Freedom Magazine. **red_square** CATS's original leadership was composed of Mr. Krohn, executive director, Steven L. Hayes, president, and Brendan Haggerty, secretary-treasurer-all Scientologists.

Mr. Krohn does not deny that CATS originated from within the Church of Scientology, but he says, "We soon moved on. There is no longer any tie with the church and there hasn't been any bond or affiliation since the genesis of CATS in 1990." According to Mr. Krohn, only four of the current 11-member CATS board of directors are Scientologists. Mr. Krohn says there are no data on the religious affiliations of the 15,000 to 20,000 people who are active in CATS. Despite the fact that non-Scientologists are apparently a majority on the CATS board, Mr. Regan states that the bond between Scientology and CATS is not really broken. He points out that the two key leadership roles, executive director and president, are held by Scientologists. "They still control the program, they control the dollars," said anti-CATS crusader Mr. Regan.

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