Scientology Inc.

On your very first day as a new hire at e.Republic, you’re given a copy of Speaking From Experience, a management training book written by the late L. Ron Hubbard, who, during his busy lifetime, was a science fiction writer, philosopher, management guru, expert on education, and drug rehabilitation pioneer. Perhaps his most well-known accomplishment was being the founder of the controversial religion, Scientology.

The book—which is impressively endorsed on the back cover by former Notre Dame basketball coach Digger Phelps—proclaims itself “the boldest and most direct principles on management ever written.”

All new hires at e.Republic, a publishing company based in Folsom, California, are required to not only read the book, but also take a course based on its contents, which—notwithstanding the grandiose description above—reads much like the same kind of hokey training materials that millions of workers try to avoid daily, except Hubbard’s methods have the higher goal of “improving conditions in your business, your life and on Earth in general.”

That, of course, is a big goal. More practically, the book, which mentions in the foreward that Hubbard founded Scientology, serves as a hearty welcome to those who join e.Republic. Once employed, whether they also join “The Club” is a different matter entirely.

“The Club,” as some current and former employees call it, has at least one requirement—that you practice the religion of Scientology. To those who don’t want anything to do with the Hubbard training, to say nothing of the Scientology religion, the prevalence of all things Hubbard can be disconcerting. The vast majority of management at e.Republic are Scientologists.

“It fosters a level of paranoia because you feel like if you speak out against how much Hubbard stuff is in the training you think they’ll come after you,” says one worker who spoke on condition of anonymity. “They pressure every employee to take Hubbard-based training.”

And the use of Hubbard-based training materials is a controversial matter. Critics argue that the training and education techniques used by the consultants are simply Scientology’s attempt to get its ethics and beliefs established in business and governmental settings, where they may gain influence over policy matters that concern the Church of Scientology, like religious freedom in Europe and the use of psychiatric drugs.

The company executives deny they’re trying to spread Scientology. Dennis McKenna, who founded e.Republic in 1983, says the Hubbard-based training is completely optional and adds, “In 18 years we’ve never had a complaint.”

But perhaps that’s because some employees don’t feel like they can complain. Some of those within the company who are not Scientologists say that the executives at e.Republic are so close to Scientology that they don’t understand where the “training” ends and the religion begins. Which could become a problem when you consider the company’s business.

Over the past 18 years, e.Republic has essentially become the principal information source on governments’ adoption of technology. The company’s conferences draw everybody who’s anybody among the government “digerati.” Its magazines, notably its flagship, Government Technology, have become the industry bibles of the government techno-nerd set. For instance, if you want the latest news on whether governments will supply online access to court files, you’ll find it in Government Technology. Another e.Republic offshoot, the Center for Digital Government, provides research and consulting to state and local governments.

To the outside world, e.Republic is a trusted resource for government officials and business leaders alike. Inside, some employees feel as if they won’t get a fair shake if they’re not Scientologists.

“We felt like the success you had in your job depended on how you were perceived by the Scientologists in the company,” says Brian McDonough, former editor with Government Technology magazine. “So you really can’t say, ‘I just don’t believe in this crap.’”

It might be crap to the non-believers, but to millions of followers, Scientology is an applied religious philosophy, a collection of daily principles to live by and a lifestyle all wrapped up in one package. Hubbard founded Scientology after the success of his 1950 book Dianetics: The Modern Science of Mental Health and pushed his seemingly secular self-improvement writings into what he began to call a religion. A pieced-together quilt of outer-world science fiction concepts and eastern philosophy, the teachings of Scientology don’t appear in one book, like a bible.

But the basics are this: Every physical body has a “thetan,” or soul, that inhabits it. The thetans are reincarnated from one body to another. Any physical problems that the body encounters—from a common cold to a brain tumor—are the results of painful emotional experiences the thetan previously experienced. These experiences are called engrams. Scientology aims to get rid of a thetan’s engrams by confessional sessions called auditing, in which a believer will detail painful, traumatic events to a church member in order to reach the level of “clear,” and ultimately the level of “operating thetan.”

And that’s not all. The ultimate teachings of Scientology hold that an evil tyrant named Xenu collected all the world’s beings 75 million years ago. He then chained all the beings to volcanoes all around Earth, where he dropped hydrogen bombs on them. Next, Xenu captured the beings’ thetans and implanted them with sexual perversion and other afflictions to make the thetans forget what he had done. This causes the essential conflict in all humans for which Scientology is presumably the cure.

While the particulars of the religion are enough to raise the eyebrow of even the most accepting soul, what makes Scientology so controversial in the eyes of some critics is not so much its teachings, but rather the all-encompassing pursuit of cash to keep the church going. A 1987 Time magazine story quoted court documents that said that one of the Church’s entities—the Church of Spiritual Technology—brought in about $500 million that year. To gain access to the secrets of Scientology, followers must pay thousands of dollars for each level of learning. At times, the quest for cash is enough to blur ethical lines.

Consider the case of David Feickert of Sacramento. In September 1991, 40-year-old Feickert, with the help of his grandfather, sued his Scientologist father, the Church of Scientology—Mission of Sacramento—and a church employee for fraud. Feickert, who in the opinion of a detective in the sexual and elder abuse bureau of the Sacramento County Sheriff’s Department could not live on his own, was allegedly scammed out of $170,000 he received in inheritance when his mother died. Feickert’s grandfather (who in court documents stated he felt David was retarded) accused the church employee of moving into the Feickert home and, with the help of David’s father, getting David to sign over his inheritance checks to the employee of the church. Feickert’s grandfather sued them all for $10 million. Two months later the parties settled the case for an undisclosed sum in a confidential agreement.

A decade before, a man named Martin Samuels ran the Sacramento Mission, the Davis Mission and three others. According to former church members and the book A Piece of Blue Sky: Scientology, Dianetics and L. Ron Hubbard Exposed, by Jon Atack, Samuels was among the most successful of the mission holders in the country. For the first week of September 1982, Samuels’ missions brought in about one-fourth of all income from U.S. Missions. e.Republic CEO Dennis McKenna was there, as the church spokesman in the local Sacramento Mission.

The building that houses the offices of e.Republic is not so unlike other corporate dwellings elsewhere in America. Located in a Folsom business park, it’s the kind of place you’d imagine that it’s comfortable to work in—you can always find parking in the company lot and you’re just a short walk to the main staples of the modern worker, Jamba Juice and Starbucks.

Inside, it’s no different. The air conditioning feels rather nice, the receptionist seems friendly and a couple of employees saunter by in shorts. e.Republic has corporate culture down pat.

The man who built all this, Dennis McKenna, is waiting in the conference room. McKenna is a tall, handsome, slender man who looks 38, but must be nearing 50, having started the company nearly 20 years ago. With him is Don Pearson, the executive vice president and group publisher of e.Republic magazines. Pearson looks slightly older than McKenna does, but at 53 he could easily pass for 45.

It’s hard to know what to expect in meeting McKenna. When originally contacted for this story, McKenna joked in an e-mail that we had it all wrong, that the company officials were actually into cosmetology, not Scientology, and yes, he’d be happy to talk. The next day, the humor was gone in a follow-up e-mail: “If your e-mail said you were interested in doing a piece because of people who practice Judaism, homosexuality or Mormonism it would be down right bizarre if not so disturbing. All of these groups and others have been and are even today labeled as controversial by the intolerant and unenlightened.”

And in the same week of the interview at e.Republic’s offices, the company retained the oldest, and arguably most powerful public relations/ad agency in Sacramento, Runyon Saltzman & Einhorn. Some of their other clients include the Sacramento Bee, the Golden State Warriors and Comcast Cable. Clearly, the issue of Scientology within e.Republic is a sensitive one.

McKenna, however, seems to take it all in stride. Questions about Scientology roll off his back. It’s the business that he’s interested in talking about.

“I’m really proud of the fact that we’re doing a good job, we’re employing folks, we’re surviving, we’re healthy. That to me is the story. I mean, my religion? Hello?” McKenna says.

While McKenna seems to go to great pains to say that his company’s prevalence of Scientologists is a non-story, some of his own employees are clearly spooked by the religion. But McKenna says that all employees are told in the interview process that the company uses Hubbard training methods, and besides, he adds, those training methods aren’t the same thing as the religion anyway.

“A lot of (Hubbard’s) work is very secular and a lot of it has to do with management. Where is the religion?” McKenna asks. “He also did found the religion of Scientology and there are religious writings, but one has to look at the information and make a choice about it. Clearly, if you look at the material that we use at e.Republic … it’s very secular writing.”

Pearson, of course, has the same view. Before he started at Government Technology, Pearson worked as a management consultant in the Sacramento area. One of his biggest clients was Allstate Insurance, where Pearson taught the Hubbard-conceived principles of managing by statistics. In the Hubbard-based training, a worker who had low statistics, or productivity, shouldn’t be excused for any reason and should be penalized accordingly. This unswerving commitment to the bottom line apparently emboldened some managers to take the training too far, resulting in management by intimidation. Pearson and his consultants also pushed other Hubbard books and tapes while consulting. When it became widely known throughout Allstate that Pearson was teaching Hubbard management techniques to its agents, Allstate banned and repudiated the courses. But by then it was too late. According to a 1995 Wall Street Journal article, more than 3,500 Allstate supervisors and agents participated in nearly 200 seminars conducted by Pearson’s firm. Some agents who worked under managers who took the training courses eventually filed religious-discrimination charges with the Equal Employment Opportunity Commission. Years later, Pearson defiantly stands by the work.

“We did good work … it’s very secular,” Pearson says now. “I have a lot of personal values, but when I’m working with a client, it’s the client’s needs that come first.”

McKenna has seen his share of controversy as well.

In the ‘70s, the church launched Operation Freakout on author Paulette Cooper, after the 1971 publication of her book, The Scandal of Scientology. The goal? To allegedly put Cooper in a prison or mental hospital by having her framed as a terrorist. Church members would make threatening calls to consulates posing as Cooper and attempted to get her fingerprints on a piece of paper and then mail it as a threatening letter to Secretary of State Henry Kissinger.

In 1979, court documents revealed the plot to get Cooper. But in a New York Times article that November, church spokesman Dennis McKenna intimated that Cooper was covertly working with the FBI and other federal agencies to harm the church. (McKenna was not accused of participating in Operation Freakout.)

Even while the longstanding ties between the Church of Scientology and McKenna and other e.Republic execs seem clear, McKenna warns it doesn’t mean that the company itself is pushing a Scientology agenda. To hear him tell it, he just enjoys the business of publishing.

“I wanted to start my own business because I wanted to create publications that reflected my outlook on life, my values, my interests,” McKenna says. “I think our publications speak for themselves in terms of their editorial content.”

Brian McDonough worked at Government Technology magazine for two years, starting in July 1998. He reported directly to the editor of the magazine, Wayne Hanson, who reported to Pearson, who reported to McKenna. McDonough held the distinction of being one of the most senior level non-Scientologists at the company. When he left, a former co-worker says in that regard, McDonough was e.Republic’s failed experiment. Once a rising star with e.Republic, McDonough says he quit when he was denied a promotion.

Like others in the company, McDonough had reservations about the prevalence of Scientology in the day-to-day workings of e.Republic. A problem, he says, was the division the religion created from within.

“There was a lot of gossip about Scientology. If a new person would come into the company we’d want to know if they were Scientologists too,” McDonough says. “You would have to worry about what you said about the company and Scientology to some people.”

But a more troubling sign to McDonough was the way that Scientology was creeping into the company’s editorial product.

“Around the time I left I began to see Scientology working its way into the editorial content in ways that were objectionable to me,” he says.

McDonough details one incident where a story he edited was pulled because of his superiors’ religious philosophy. The story was on a government-funded computer system promoted by the California Board of Pharmacy that would track psychiatric drugs like Ritalin, Demerol and Prozac. At that time, that information was documented on paper. The information would consequently be put on a network, where doctors could access it. For years, the Church of Scientology has criticized the psychiatric profession (which has been critical of Scientology from the outset), through the actual writings of L. Ron Hubbard and through a nonprofit organization called the Citizens Commission on Human Rights.

McDonough says the mere mention of the existence of the drugs induced management to pull the plug on the story. Assemblywoman Helen Thomson of Davis backed the program, which was an issue with e.Republic management because, according to McDonough, they didn’t like her education agenda because they perceived it as promoting the use of psychiatric drugs. According to McDonough, management even admitted the story was pulled because of Scientology.

It would come as no great shock. Corporation records show that Don Pearson opened a local chapter of the Citizen’s Commission in 1998, and Pearson also set up a political action committee called the Association of Citizens for Social Reform, designed to “play offense” in eliminating “public support for social, educational and mental health programs that are intrusive, force-based or damaging to individual awareness and competence.”

McKenna says the decision to kill the story was his alone. He says he made the move because a family member had been hooked on methadone for 10 years. “There were statements in the article from the California Medical Association that just didn’t square up with my reality [with the family member],” McKenna says. “To be honest it was a personal thing.”

The experience left McDonough feeling like the magazine wasn’t being honest about its intentions. “My feeling was that if they were going to filter things through Scientology philosophy, I thought they should at least be upfront about it,” he says. Ultimately, McDonough left after he didn’t get a promotion to the magazine’s top post. He says it was his understanding that editor Wayne Hanson would move to the Center for Digital Government and he would assume the top spot. After the story was pulled, however, things changed.

“Prior to the story I had the promotion, afterwards I didn’t,” McDonough says.

McKenna responds: “As an employer and editor-in-chief of this magazine, I would never make a promotion decision based on one story.”

While a search of Government Technology’s Web site turns up only one mention of Scientology—when the Church won a copyright case against a man who published some Scientology writings on the Net—the magazines are not above giving some press to long-time associates who push, in some form or another, L. Ron Hubbard’s teachings.

For three consecutive summers, from 1996 to 1998, Government Technology did very similar stories on the work of Ingrid Gudenas, president of Fremont, California-based Effective Training Solutions. Gudenas, who used to head the Northern California arm of the Scientology-backed Applied Scholastics, also is listed as a speaker at e.Republic’s conferences. For a mere $350, one can attend Gudenas’ and Pearson’s course on “Leadership, Communication & Training: Keys to Success at Internet Speed.”

The articles deal with Gudenas’ success with teaching “100 percent Proficiency Training,” which the articles note is based on the education methods of “best-selling American author and researcher L. Ron Hubbard.” In the other articles, Hubbard is listed as “best-selling American author and humanitarian,” and also as simply “best-selling American author.” Hubbard’s greatest achievement, the founding of a religion with millions of devotees, is carefully omitted.

Even the editorialists get into the act of pushing Scientology-backed positions. In Converge, another one of the company’s magazines, editor Bernard Percy and former publisher Sherese Graves wrote a series of editorials that spoke out on the “psychiatrization [sic] of education.” Nevermind that Converge is a magazine about technology and education, Graves wrote in one of the editorials, “Some educational issues, those touching on values and importances [sic], are more basic, a lot thornier and have far more future implications than the number of computers in our classrooms.”

Which, of course, may be true. Still, when editorialist Graves seems to imply that the Columbine shootings were attributable to the taking of psychiatric drugs, as she did in the magazine’s first issue of 2000, could it have benefited a reader to know that Graves is a Scientologist? McKenna says it’s not necessary.

“I don’t want to be held to an unfair standard on this. If the New York Times wrote an article supporting Bill Clinton or whatever, do they need to say, ‘I’m a member of the Democratic party?’” McKenna asks. “Or if there is an editorial piece by someone in some major daily about abortion, do they need to say, ‘The reason I feel this way is because I’m a Catholic?’”

It’s a fair point. But is that as it should be in a medium where credibility depends on the trust of a readership? McKenna says e.Republic is an open book.

“Everything we do is open,” he says. “ We’ve had many discussions with business associates about our religion. It’s not something we promote and it’s not something we hide.”

However, McDonough thinks the company isn’t open enough.

“The harm is that the company is pushing an agenda that it’s not admitting upfront, which is not being honest with the people who give them money, whether they are advertisers, readers or states that do consulting business with them,” he says.

In 1999, Richard Varn, the chief information officer (CIO) of Iowa, was put in charge of creating a state-run information technology department. Essentially a new state agency, the department would use “information technology to improve the lives of Iowans.” It was clearly an important initiative—the director of the agency, the CIO, would become a cabinet-level post.

For help, Varn turned to the Center for Digital Government, a division of e.Republic that was founded in 1999. Many consider e.Republic the leading information source on how state and local governments use and manage technology. In August 2001, Florida governor Jeb Bush graced the cover of Government Technology for an interview on Florida’s use of technology. Inside, there were stories on everything from technology in the Department of Motor Vehicles to Florida’s increased marketing to lure high-tech jobs.

“The company has been the backbone of understanding of what’s going on with technology and government since the mid-’80s,” Varn says. “It was the only thing out there that was a rallying point for people who were trying to keep up with what was going on.”

The Center, in exchange for a fee in the neighborhood of $50,000, authored a blueprint of how such a state agency would work. Varn and the rest of Iowa’s team made adjustments to the report, a legislative oversight committee approved the recommendations and the project was given a budget.

For Varn, it was no big deal that the Center for Digital Government and its corporate parent, e.Republic, are run by Scientologists. But then again, he didn’t even know. When told, he sounded a little thrown.

“Well, certainly in their business there was no evidence of it,” Varn says. “Do you have confirmation of that?”

Now that e.Republic is taking its business one step closer to working with governments—before with its magazines and conferences it was simply providing a forum, whereas now it’s helping to form departments and policy—it opens another can of worms for some who may not be comfortable with the Church’s previous dealings with government.

“Some people would see any contact between Scientologists and government as an organized attempt to extend its influence,” says Stephen Kent, professor of sociology at the University of Alberta. “People should be asking to what extent is the contracting company encouraging the use of Scientology technology in its consulting business.”

Kent, who specializes in new and alternative religions and cults, has appeared as an expert witness for plaintiffs that have sued Scientology organizations. In response, Scientologists have picketed his office at the University of Alberta. Kent says there are writings by Hubbard, notably “The Special Zone Plan,” that call on his followers to attempt to implement Scientology in their own spheres of influence.

And of course, Scientology has had its share of direct run-ins with government. In the 1970s, Scientology spies gained access to federal agencies by planting administrative workers, like secretaries and assistants, in the Department of Justice and the IRS who collected documents the Church had been trying to gain access to using Freedom of Information Act lawsuits. Ultimately, the government caught on and in a mass raid of Scientology locations across the U.S., found evidence of a massive plot called “Snow White” that called for operations against enemies in and out of government. Eventually, 11 Scientologists went to jail, including Hubbard’s wife, Mary Sue.

While “Snow White” is ancient history, some foreign governments aren’t taking any chances. In Germany, where Scientology isn’t even recognized as a religion, some government officials went so far as to call for a prohibition of the sale of Microsoft Windows 2000 because a firm owned by a Scientologist, Executive Software, wrote the disk defragmenter program for the software (a defragmenter rewrites all files on a disk or hard drive so that all parts of each file are stored on adjacent sectors rather than spread throughout). According to Professor Kent, German officials feared that the company could have placed a secret code in the program that would have allowed the organization to enter the software while it was defragmenting and read the disk’s or hard drive’s contents.

The Center for Digital Government isn’t working on that kind of scale. The firm employs less than 20 people in its Folsom offices. And it doesn’t provide technology-savvy programmers, McKenna says. Instead, the Center simply uses its contacts with state governments to come up with the best organizational structure for whichever government it’s working with. Furthermore, McKenna adds, consulting isn’t even the Center’s main business … research is.

And sure enough, the report the company prepared for Iowa and Richard Varn is fairly innocuous. Nothing in the report seems very tied to Scientology, according to an ex-member of the Church who looked at the document. Still, the closeness of Scientologists to government officials raises sensitive questions about the proximity of government to religion, and when addressed to McKenna concerning Scientology, he responds the same way every time. For him, it’s almost discrimination to even ask the question. There was, however, one time he almost broke face and got angry. It was toward the end of the interview, when talking about the typical kind of press coverage the religion receives.

“It’s a little disappointing to me … you know, here we go again,” McKenna starts. At that, his cooler side kicks in.

“Hopefully, before I die, I can be who I am, and I can do my job, and believe what I believe and have the freedom to do that just like hundreds of other publishers and magazines owners in this country,” McKenna says.

McKenna’s protestations aside, that’s essentially what he’s doing. McKenna says that he’s never been asked by a journalist about the prevalence of Scientology within the ranks. The Sacramento News & Review is the first to bring it up, he says. And the company is healthy. Despite the recent economic downturn and poor advertising market, e.Republic, McKenna says, has only had to lay off five people out of about 130. Aside from the occasional low blow by a competitor, Scientology hasn’t been a negative factor for e.Republic.

“I’ve had situations where a competitor has tried to use my religion to stop my business. And spread facts, and stories about, you know, ‘You’re advertising with these people, they’re Scientologists … do you know that?’” McKenna says.

Certainly, Richard Varn didn’t. And while he professes a kind of ignorance of the religion as a whole, he says e.Republic’s orientation toward Scientology won’t stop him from working with the company.

“As long as you do the work, we don’t discriminate,” Varn says. “It’s not like I’m going to boycott Tom Cruise movies because he’s a Scientologist.”

But, he adds: “I’m not a real big fan of Scientology … at all. I was raised a Catholic myself.”