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great emotional stress with my wife.
And Frank had told me that I had to make a choice. I had to tell my wife either stay or go, but he wanted me to go tell her one thing or the other right then and report back to him, because it was weighing too heavily on me; it was taking my attention away from my job.
MR. LeCHER: You mean, the CMO --
MR. KELLEY: Mr. Freedman was his name.
MRS. GARVEY: Frank Freedman?
MR. KELLEY: Right.
MR. LeCHER: He said, "You either control your wife and your personal life," like stay with your wife or not stay with your wife?
MR. KELLEY: He did that time.
MR. LeCHER: All for the good of the CMO?
MR. KELLEY: Right. Well, all for the good of the organization because it was pulling me away from my post. It was causing too much attention.
MR. LeCHER: Did anyone ever live in the garage?
MR. KELLEY: Yeah, the RPF did.
MR. KELLEY: Right, the Rehabilitation Project Force.
MR. LeCHER: What were conditions like in the
MR. KELLEY: They weren't a whole lot better than they were in the men's dorm. Three-high bunks and -- there wasn't much need for air conditioning, but it was -- I was only in there a couple of times, and it was, you know, bare walls, concrete walls, plywood on one side, plywood walls.
MR. LeCHER: Did you personally see this?
MR. LeCHER: And you lived there for
MR. LeCHER: -- a short time?
MR. KELLEY: Yes -- no, I never lived inside that; I was never in the RPF.
MR. LeCHER: But there were people that lived in a garage?
MR. KELLEY: Right.
MR. LeCHER: Did you live in the garage?
MR. KELLEY: No. I was never in the RPF.
MR. LeCHER: You were never in the RPF.
MR. KELLEY: Right. I never got into trouble.
MR. LeCHER: But you did see firsthand knowledge that
MR. KELLEY: Those conditions did exist.
MR. LeCHER: -- those conditions did exist?
Do you think they still do?
MR. KELLEY: I'm almost positive-of it.
MR. LeCHER: What do you think: If I left this meeting on our break and went down to the Open House for Scientology, would I be treated warmly?
MR. KELLEY: You would be treated with complete terror on first walking in. And then, once they got someone to talk to you -- the security guard would have some kind of an attack, I'm sure: "My God, the Mayor's here."
And then, when he got someone that was more capable or qualified or that was their job, the y would show you around. They'd show you the chapel; they'd show you the classroom upstairs, the lobby, you know, these real innocuous things. You know, they won't show you some of the more grisly conditions, you know, say, a crowded dormitory room or, heaven forbid, the RPF auditing room, or
MRS. GARVEY: What's the RPF auditing room?
MR. KELLEY: -- the -- anything else, you know.
They'll just show you this, you know, nice, clean
MR. LeCHER: What is the RPF auditing room? Mrs.
Garvey was thinking out loud. What really is the RPF auditing room? I'd like to know, too.
MR. KELLEY: Just a big room in the garage where they do their auditing.
Normally, auditing is done in a private room. But in the RPF, you've got four or five guys auditing in the same room.
MR. LeCHER: Okay. We are running out of time and I want to get to Mr. Berfield and Mr. Calderbank and give them some time, so I will give it to Mr. Berfield Mr. Calderbank, and if he wants to follow up on CMO and the hundred men people here and anything about the disquieting effect they have on the City of Clearwater.
MR. CALDERBANK: Casey, you were given specific money for a job, eight-sixty a week, then, seventeen twenty per week?
MR. KELLEY: Right. And then, it went up to $20.00 a week.
MR. CALDERBANK: Did you have hours, specific hours you had for work?
MR. KELLEY: There was a muster that I was supposed to attend.
MR. CALDERBANK: That they required?
MR. KELLEY: Right. It was right after breakfast, right after meals.
MR. CALDERBANK: Did you ever sign any -- did you ever see a W-2 form?
MR. KELLEY: Yeah, when I first came on staff.
MR. CALDERBANK: Did you sign it?
MR. KELLEY: As far as I know, I did.
MR. CALDERBANK: Did you ever give a social security number or a waiver for your salary?
MR. KELLEY: I'm trying to remember if I -- I'm sure I did; I must have, because that's on the.W-2 form, isn't it?
I know I never filed a tax form.
MR. CALDERBANK: Did you file a waiver for that
MR. KELLEY: I don't think so.
MR. CALDERBANK: When you -- when you did the paperwork, you said you saw almost all the invoices?
MR. KELLEY: All of the invoices.
MR. CALDERBANK: All of them?
MR. KELLEY: All of them.
MR. CALDERBANK: Did you ever see any invoices for, say, private interests?
MR. KELLEY: For a business?
MR. KELLEY: On occasion. I'm trying -- I've been trying to remember for the last two days what they were, though. I remember one in Los Angeles.
Mostly people paid in their own names. There was a couple of smaller businesses that were owned by Scientologists, but they had their own account for the business.
MR. CALDERIBANK: In the Church?
MR. KELLEY: Right.
MR. CALD ERBANK: And they owned this business as a private individual?
MR. KELLEY: Right.
MR. KELLEY: And they wouldhave these documents on them.
MR. CALDERBANK: Do you know that for a fact.)
MR. CALDERBANK: Can you give me a name?
MR. LeCHER: We're not really -- I've been advised not to have you give names because that
MR. CALDERBANK: Did you have personal experience with that?
MR. LeCHER: It may be objectionable to some people.
Someone else -- or you mentioned, also, that you had a person prior to you that falsified statistics?
MR. CALDERBANK: Is that a widespread practice on an
MR. KELLEY: Not after him.
MR. CALDERBANK: Are there checks?
MR. CALDERBANK: Are there any checks implemented now to --
MR. KELLEY: Right.
MR. CA.LDERBANK: -- to see if anyone is falsifying statistics? -
MR. KELLEY: There is on the income statistics.
it's still very easy to falsify a statistic, but that's
a high crime. That's you'd be in a major amount of
trouble for falsifying
MR. CALDERBANK: Would it be a high crime to falsify to an outside government?
MR. KELLEY: Oh. It would be a high crime to falsify to Scientology let alone someone outside the
MR. CALDERBANK: What about the money -- you said you had thirty bank accounts in many different -
MR. KELLEY: Thirty's a rough guess.
MR. CALDERBANK: About in many different
accounts within the Church.
Were any specifically in the GO office?
MR. CALDERBANK: Could you trace any -- you've heard of activities in the GO that could be considered ,criminal in nature.
MR. KELLEY: Right.
MR. CALDERBANK: Did you ever see any invoices, specifically
MR. CALDERBANK: lining that up?
MR. KELLEY: No. The invoices that I saw were all money-coming in.
MR. KELLEY: I didn't see any money going out.
MR. CALDERBANK: Was there any way you could have been able to tell, just by the records that you had, whether or not the money was going for those types of activities?
MR. CALDERBANK: Are there other buildings outside of Clearwater that Scientology owns?
MR. KELLEY: Well, there are MR. CALDERBANK: Others
MR. KELLEY: Well, there's orgs. -- there's they own buildings around the world.
MR. CALDERBANK: Are they used by private individuals?
MR. KELLEY: Not to my knowledge.
MR. CALDERBANK: All right.
You talked about the money and investment, and you used the specific word "invest."
Do you remember that when you talked
MR. KELLEY: Right.
MR. CALDERBANK: -- about gold?
MR. KELLEY: Right.
MR. CALDERBANK: Is that when gold was going up?
MR. KELLEY: That was a very vague conversation, so that's why I was very vague yesterday. It was mentioned in passing in an office that I was in.
MR. CALDERBANK: Do you remember the name of the person that mentioned it?
MR. KELLEY: Mr. Shomer.
He talked about, perhaps, buying gold when it was on its way up?
MR. KELLEY: Right, because he made a small -- he makes personal money on it.
MR. CALDERBANK: He made personal money on it?
MR. KELLEY: Yes. Out of his own personal funds, he bought some silver or something and he sold it later at a much higher price.
Do you have any idea of whether or not the money that comes into the Church is used in this type of investment?
MR. KELLEY: I have no idea if it -- I.don't
MR. CALDERBANK: But it was talked about?
MR. KELLEY: It was discussed.
When you talked, also, about people as Mr. Hagen in Europe, you mentioned that
MR. KELLEY: Hegetschweiler.
MR. CALDERBANK: Hegetschweiler.
You talked about bonuses, percentages, you talked about commissions.
MR. KELLEY: Right.
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MR. CALDERBANK: There were certain specific commissions for services rendered?
MR. KELLEY: Right.
MR. CALDERBANK: And you always called them services, correct?
MR. KELLEY: Right.
MR. CALDERBANK: And there was specific money paid for specific services?
MR. KELLEY: Right.
MR. CALDERBANK: Specific hours?
MR. KELLEY: Right.
And --
MR. KELLEY: Sometimes specific auditors, too.
MR. CALDERBANK: -- money -- specific auditors, too?
MR. KELLEY: Sometimes.
MR. CALDERBANK: Fulfilling their task within the organization?
MR. KELLEY: Right.
MR. CALDERBANK: Did they receive commissions, also?
MR. KELLEY: Registrars usually -- I can't remember what the percentage was. Those people made decent money.*
.3- b 2
MR. CALDERBANK: Were any of these people registered with the state who were taking commissions?
MR. KELLEY: Not to my knowledge.
MR. CALDERBANK: When -- if there were potential problems, do you think anyone that would want to see the flow of money either coming in or going out of the Church, do you think that would, in your own personal opinion -- would that stop any person, his being able to participate in the activities of Scientology?
MR. KELLEY: Can you rephrase that and say it again?
MR. CALDERBANK: It's hard to rephrase.
MR. LeCHER: Well, say it again so he understands what he's going to say.
MR. CALDERBANK: If those invoices were made public that you saw going across your desk every day -
MR. KELLEY: Right.
.MR. CALDERBANK: -- and if the people that were giving the money in checks, the registrars*
MR. KELLEY: Right.
MR. CALDERBANK: -- if those were tallied and were availabie - which you did, you said four or five hundred
thousand dollars - if those were tallied and those were available or in a statement form, would that prevent
anybody that paid the money from obtaining the services?
MR. CALDERBANK: You don't think it would stop them from participating in what they paid for?
MR. KELLEY: No. Once they paid -- let me see if I get you right, if I understand.
MR. CALDERBANK: I'm asking if people that donated
MR. KELLEY: They always get that service. That's unless for some reason they didn't want to do that specific service; they could do another service.
MR. CALDERBANK: So, basically, the question is: Tracing that money won't stop people from getting the services?
MR. KELLEY: Right.
The moft-ey is -- the money is -- the accounting isn't too bad, it's usually fairly accurate.
MR. CALDERBANK: And it wouldn't stop them from enjoying what they find in Scientology?
MR. KELLEY: Right.
How would it -- wait a minute. How would it stop them, because it's just money that they've paid, right?
MR.'CALDERBANK: I wanted to ask you because you are the first witness that has the most intimate
MR. KELLEY: It's like -MR. CALDERBANK: -- knowledge about the money
MR. KELLEY: It's like buying -- like paying for a room in a hotel, you know. You get an invoice and, then, you go ahead and stay in the hotel.
MR. CALDERBANK: Why do you keep referring to it as services?
MR. KELLEY: That's what they're called.
MR. CALDERBANK: Was anyone ever given MR. KELLEY: It's a service
MR. KELLEY: -- as opposed to goods and services; it's a service.
MR. CALDERBANK: Have you ever seen anyone get a service for less than going price?
MR. KELLEY: No. That was not allowed.
MR. CALDERBANK: Was it ever
MR. KELLEY: It's a flat rate and that's what you paid.. You could get a five percent discount for going for paying
early.Five percent? I think it was five percent; it could have been ten.
MR. CALDERBANK: Okay. When you were talking about auditing, you said that people would be stopped half way through if they
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paid, like, say, twenty thousand; that's the number you used
MR. KELLEY: - Right.
MR. CALDERBANK: And did you say that they had been told -- or have you ever heard it as a policy that without further auditing they may become ill?
MR. KELLEY: That happened. That was a common technique.
MR. CALDERBANK: That was a common technique, telling someone they would get ill?
MR. KELLEY: If -- it was -- -.Lf they were in the middle of an auditing action. Let's say you paid for, let's say, twenty-five hours to complete such and such a rundown, and you got to the end of that twenty-five hours and you.still hadn't finished, that was the common technique: "You're going to get sick if you don't finish this," you know. So, you have to buy --
MR. CALDERBANK: if you don't finish it, you have to buy
MR. KELLEY: You have to buy another intensive; you have to buy another twelve and-a-half hours.
MR. CALDERBANK: What about the waivers that you signed? They were actual -- they told you that they would stand up in a court of law and they were acceptable?
MR. KELLEY: No, I was never told that. But, boy, they sure looked -- they looked legal. I mean, "Whereas" -- you know, they had legal terminology.
MR. CALDERBANK: Did that make you feel that if you left you could be sued for the money on the freeloader's debt or whatever?
MR. KELLEY: Nobody reads them. They didn't.
one of the things that you sign -- when you do a course, you sign a promissory note and an invoice; that's staff members. You never read that stuff because you're usually in a hurry to go start the course.
MR. CALDERBANK: Did you think it was legal at the time you did it?
MR. KELLEY: I didn't know. It looked it. it looked pretty legal.
Then, the last area: Since you saw the invoices, did you see any invoices for textbooks, say Calculus, Biology
MR. KELLEY: Never.
MR. CALDERBANK: No textbooks?
MR. KELLEY: Never. Once in a while a dictionary. They sold dictionaries in the bookstore.
MR. CALDERBANK: So you never saw, say, regular.
schoolbooks for children ever purchased from the Church fund?
MR. KELLEY: That -- again, that's money going out.
MR. CALDERBANK: Yes. But the company would bill you with an invoice, wouldn't they?
MR. KELLEY: Yes. But that was still -- that was money going out. I wouldn't see that.
MR. CALDERBANK: And you never saw money spent for fire extinguishers, extinguisher
MR. KELLEY: I know that -- I know that that sort of -- I know -- I think they're legal on that sort of thing. I know the Clearwater building is because the lights have gone out a few times, those little lights they have over the entranceways. Those go on
MR. CALDERBANK: Did you ever see money leave the Church to perform any of those functions?
MR. KELLEY: I never saw money leave the Church.
That"s a different -- see, the place I spent most of my
time was in the other part of the -- which is the income,
the Director of Income.
MR. KELLEY: And the place the money went out from was the disbursement end. It was just -- it was in another building, another office.
MR. CALDERBANK: And my last question is: You mentioned that you had gotten food poisoning.
MR. KELLEY: Right. .
MR. CALDERBANK: A few times?
MR. KELLEY: Two or three.
MR. CALDERBANK: Two or three?
MR. KELLEY: Right.
MR. CALDERBANK: Where had you eaten that food?
MR. KELLEY: In the -- in a room in the Clearwater building and in the Fort Harrison building.
MR. CALDERBANK: Was that -MR. KELLEY: That was fairly -- that happened -
MR. CALDERBANK: -- common?
MR. KELLEY: Yes. When somebody would get it, usually, a few people got it. And you went to sick bay and
they_gave you some vitamins and you went to bed. That's usually what I did. I just would sleep. I'd be all right in a
day or two.
.MR. CALDERBANK: No further questions.
MR. LeCHER: Mr. Berfield.
MR. BERFIELD: Mr. Mayor, if you will recall, I started this off yesterday, but I did have a couple of questions that I didn't get a chance to ask. Mr. Kelley, there seems to be a thread running
through here of vagueness in names. Is that because of a part -
MR. KELLEY: No. It's an unwillingness to give .names. I can give you names, addresses.
MR. BERFIELD: You mean, if we ask for the names and the addresses, they are available to us?
MR. KELLEY: Certainly. I can give you names.
MR. BERFIELD: Okay. The other situation is that you keep referring to in Mr. Calderbank's questioning here - the money going out.
MR. KELLEY: Right.
MR. BERFIELD: And this being somewhat of a para it seems to have a military organization to it, if there was a need to know and you went across and asked where this money went, what would happen to you?
MR. KELLEY: They'd probably tell you to -- they'd probably s ay to leave them alone because it wasn't -it was what they call unnecessary noise. You don't need to know.
MR. BERFIELD: So, it goes back to military: Just what you need to know is -
MR. KELLEY: Right, basically.
MR. BERFIELD: Just one last question here: You
referred to this RPF auditing room as awesome.
What was so much more awesome about it than any of the other auditing rooms?
MR. KELLEY: Well, a regular auditing room is just
one -- it's just you in the room. And the RPF -- there's
another unit that used to do their auditing in the same
room. It's just a big -- big room with about four or
five tables in it, and that's where you do your auditing.
I mean, youd be auditing here and someone else would be next to you auditing on a totally different thing.
That gets into a strange -- they used to get into a strange phenomenon at times.
MR. BERFIELD: Well, about the RPF auditing room, you had specifically said that there was some thing awesome about.that. What's awesome?
MR. KELLEY: Well, comparatively, because in a regular auditing room, that's where you're doing your counseling. And it's between you and your auditor. That doesn't -- I don't need to go into that. But that's a real-quiet place and it's real private.
And the RPF auditing room is so noisy, you know. There was a lot of people in there. It was also cluttered and that sort of thing
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When I first came on staff, I was in the Flag Readiness Room, and in that operation we did the same thing. We
audited in this big room. And t hat -- that's all. It's just real cluttered and large.
MR. BERFIELD: I have no further questions.
MR. LeCHER: All right.
MRS. GARVEY: In auditing, were you told that the E-Meter was scientifically based or not?
MR. KELLEY: Scientifically based? Yes.
MRS. GARVEY: That they were scientifically based?
MR. KELLEY: Right, that it was a scientific instrument that would run a small matter of charges through your body
that measures electronically -- or electrically.
MR. LeCHER: I just have one -- two quickies.
What is.-IMO? Then we're going to go
MR. LeCHER: It's evidenced with
MR. LeCHER: -- "See your executives, the IMO."
MR. LeCHER: Is that -- I make it IMO.
MR. LeCHER: It's the International Management
MR. KELLEY: If it is, it's come on since I left.
MR. LeCHER: It's 1981.
One other question: You talked about giving money for a room as a -- more or less of a donation or as for services. You also said that for anything that they sold there. You also mentioned getting a five percent discount.
Do you think it's possible to get a five percent discount on a donation?
MR. KELLEY: Oh, yeah. See, there's an advance payment discount
MR. LeCHER: No, no. If I buy something and I pay cash, I might get five percent. But how can you get five percent off a donation? It doesn't seem -
MR. KELLEY: Oh, how can you get the five percent itself? I don't understand what you
MR. LeCHER: Well.
MR. KELLEY: That would be a discount.
MR. CALDERBANK: He doesn't understand.
MR. KELLEY: Say, the services were originally $15,000.-00, the discount would be twelve thousand five hundredwhatever.
MR. SHOEMAKER: Did you ever hear the word
MR. KELLEY: Oh, sure. That's what they were considered, donations.
MR. LeCHER: My question is: How could you give a discount on a donation? I can see you giving me a discount on MR. KELLEY: Oh, I see what -
MR. LeCHER: -- a purchase because you pay cash, but you can't give a discount on a don ation.
MR. KELLEY: I see. Good point.
They were called -- they were called donations. There was also a five percent discount.
MR. LeCHER: Okay. Was your brother's name in an auditing folder? You mentioned your brother was upset with your -
MR. KELLEY: He was more likely in my Ethics folder.
MR. LeCHER: So, that's how they tracked down your brother or -
MR. KELLEY: Quite possibly. They may have possibly wire tapped; he was calling around the country trying to find out something about Scientology. Because no one else knew I was there but -
MR. LeCHER: Do you know anything about wire taps?
MR. KELLEY: I know that they have been used with other people.
MR. LeCHER: With members or enemies?
MR. KELLEY: Enemies, always enemies. That's not that's not personal knowledge while I was in Clearwater. It's knowledge I ascertained after I got out.
MR. LeCHER: All right. Then, it's not firsthand that you actually saw
MR. LeCHER: We have to try to go through five witnesses today, ladies and gentlemen. And we have no more
questions, at least, I have none. I have plenty to ask you, but I think we better get moving. I want to thank you for
coming. Do you--want to say anything in conclusion?
MR. KELLEY: No, I don't. I think I've pretty much said what I wanted to say.
MR. LeCHER: Thank you very much for coming.
Now, we -- you have another witness?
MR. FLYNN: I do, Mayor. And I'd just like to make Rosie Pace, please - a little point of information, if I could, -for the benefit of, perhaps, the city and
the Commission.
As a consultant, I have endeavored to present a cross-section of different witnesses on different levels of the organization, and -- of which Mr. Kelley represents one particular level as Mr. Walters represented a particular level: a policy level, as opposed to Mr. Kelley, for instance, being on the level that he was on as he described it.
And it might be something that should be kept in mind as different witnesses may have participated in very compartmentalized activities, such as Guardian's Office activities as opposed to Treasury Division activities in terms of very isolated jobs. And you might find that different witnesses look at the organization in terms of their experiences on the level that they were operating on.
The next witness is an individual named Rosie Pace and,'while she's coming in, I'll quickly introduce a few documents.
MR. LeCHER: All right. Rosie Pace is the next witness; is that correct? It's not -
MR. FLYNN: No. We'll go with Rosie Pace now.
MR. LeCHER: Do you want to lower this
MR. FLYNN: If I could, please.