Settin’ the Record Straight

Rachel Denk is a productive member of the independent community, having contributed finances, meters, books, lectures on CD, lectures on cassette tape, an LRH framed photo, friendship and advice, and lots of data. She comments on this blog as Hallelujah and TheWidowDenk. It is her sincere hope that – through her contributions – others are made aware of the gross misapplication of Source by Miscavige and his minions, and find the initiative and wherewithal to do something about it.  She has shared with me the facts surrounding the church’s treatment of legendary Scientologist, L Ron Hubbard’s personal doctor, and her husband Dr Gene Denk.

Dr. Denk was head of the Shaw Health Center. His many years of service to Hubbard, Sea Org and staff members, and public Scientologists created a large, loyal patient base. Chiropractor Stephen D. Price was Dr Gene Denk’s partner and, supposedly, his friend.

After Hubbard died and Miscavige anointed himself king, Stephen Price apparently began to value another “friend” more highly than Dr. Denk. Stephen became a personal pet of Miscavige, visiting him every weekend at the Int base since the eighties to the present.  Stephen gave Miscavige chiropractic services and special, lengthy massages.  He also regularly went out to play golf and go to the movies with Miscavige, and when at the Freewinds they would go scuba diving and to lavish dinners with one another.  Miscavige had Price hang around the base all weekend long (almost every weekend, and many times extending into the work week) for years waiting for whenever Miscavige needed or wanted Stephen’s magic fingers or a recreation break from his fellow Sea Org members whom he considered to a one to be riff raff.  For the last two decades Price has regularly accompanied Miscavige on his trips around the world, along with Miscavige’s entourage of hairdresser, stewards, and chefs.  Whenever Price happened to mention a personal problem with any org, Miscavige would be on it like white on rice, as if Tom Cruise himself had squealed like a stuck pig.

Price, no doubt, received an earful from Miscavige about Dr Denk.  Miscavige nattered heavily about Dr Denk.  Seems Dr Denk missed all manner of withholds while serving L Ron Hubbard in his final years of life, while Miscavige was calculatingly positioning himself to use Hubbard’s name and fame to rocket himself into a position of unquestioned power and wealth.

Dr Denk passed away on November 5, 2004 after a 10 month painful bout with cancer. Less than a month before his death, Stephen Price caused a “To Whom It May Concern” letter about Dr Denk and his wife to be delivered to the Denk household where home care was nearing the end-of-life stage. Rachel intercepted the letter before it reached Dr Denk’s eyes as it certainly wasn’t going to assist his spiritual or physical care.

The document has been transcribed here for easier reading (a scan of the actual document can be viewed at the end of this post)

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

SHAW MANAGEMENT CORPORATION

5336 Fountain Ave. Los Angeles CA. 90029

10/10/2004

To Whom It May Concern:

Shaw Management Corp., DBA Shaw Health Center, (SMC) is a corporation for the purpose of managing the administrative aspects of health care services to the general public. Gene Denk and Stephen Price are 50/50 share holders in the corporation.

SMC was located and operated out of the property 5336-38 Fountain Ave. Gene Denk and Stephen Price, as individuals, own the property at 5336-38 Fountain Ave. SMC leased the property from Gene Denk and Stephen Price.

The structure of SMC was that all gross earnings of Stephen D. Price and Gene Denk, as well as the independent contractor health care providers were to be paid to SMC. From those Gross earning, ½ were to be used to pay overhead, equipment, administrative and other financial obligations of SMC. The other half of the gross earning was distributed back to the health care providers, including Stephen Price and Gene Denk.

Gene was absent from SMC for two years (1984-86). During this time he made no contributions to SMC, notwithstanding he was earning money as a health care provider elsewhere. During this time Gene did not contribute any income to SMC. Consequently, Gene contributed nothing toward the overhead, equipment, administrative and other financial obligations of SMC.

While Gene was gone, and contributing nothing to SMC, Stephen continued his practice full time contributing his gross income to SMC. Out of that Gross income (approximately $500,000.00) SMC kept approximately $250,000.00 of that gross income to pay overhead, equipment, administrative and other financial obligations of SMC.

Between Gene and Stephen, Stephen was the sole income contributor to SMC. For 2 years Stephen was solely responsible for the administration of SMC with no help from Gene, reasonably valued at $500.00 per week for 104 weeks = $52,000.00.

Stephen has reason to believe that Gene received over $350,000 for his work elsewhere. (This is only an estimate, as all the exact data has been withheld from Stephen throughout the cycle.) All of Stephen’s and SMC financial data was passed to Gene through Rachel throughout the cycle. When Gene returned he used the money he made elsewhere, that should have passed through the corp., to loan to the corp.

In 1986 when Gene returned to his practice at SMC he loaned $100,000.00, to SMC. The check did not come from Gene, it was written by a church related organization to SMC. This caused Shaw to pay taxes on it as income and allowed Gene to avoid paying personal income tax on it. Accordingly Gene got a personal tax benefit at the expense of SMC.

To bring all things equal Stephen will need all his contributions of ½ his Gross income back from the corp. and his full pay for administrative work. Plus ½ of the total taxes paid on the $100,000.00 and Gene would get his full 61,000.00 from the loan.

The Truth of the matter is:

All debts and financial obligations undertaken by SMC are the sole responsibility of SMC and must be paid solely from SMC assets, if any. The Property at 5336-8 Fountain Ave. is not an asset of SMC.

The SMC corp. is no longer in business and is unable to:

1. Pay Stephen for the administrative duties performed
2. Return the $250,000 of Stephen’s own money contributed for 2 years.
3. Refund the taxes paid for the 100,000.00
4. Pay Gene back the balance of the loan to SMC.

SMC went out of business when Gene decided to form Optimum Wellness Medical Group and separate out chiropractic, massage and vitamins from Medical. Gene’s decision ended any chance we would have of collecting any monies from SMC.

Sincerely

Stephen D. Price

Secretary, Shaw Management Corp.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Twenty years after the fact, twenty years in which Stephen Price spent perhaps more time away from the office servicing David Miscavige than at the office, Stephen Price hounded Dr Denk on his death bed regarding money.   His basis of claim is that Dr Denk allegedly did not share his earnings from his service to L Ron Hubbard during the last 1 ½ years of his life.  1 ½  years in which Dr Denk had to leave his family, spend months at a time holed up in remote hotel rooms at the direction of Miscavige to be “on call”, cross state lines and start all over on a moment’s notice, and always be there to assist when Hubbard called on him.

Here is the punch line.  Rachel Denk, who helped handle Dr Denk’s finances and coordinated filing of his tax returns, never heard of the $350,000 that Price, twenty years after the fact, alleged existed.  Legal Director Author Services (ASI) Ryland Hawkins vouched for Price’s allegation claiming to have documentation of the payment.  (Note, I held the Legal Dir ASI post from its inception through a year beyond Hubbard’s death, and then subsequently worked for Miscavige for another seventeen years – and I can tell you such a representation/reg tag could not and would not happen absent being ordered by Miscavige directly.)

Shortly after challenging this nifty set up, Rachel Denk, who worked at ASI for many years on the Writers of the Future activity, was inexplicably and rapidly routed out of ASI, treated like a security threat.

Rachel never caved to this con.  After Gene’s death and after enduring an IAS reg assault to take out a home equity loan to donate to the IAS because “Miscavige has a really big situation,” Rachel was treated with increasing disrespect by the radical corporate Scientology corporations.

Recently, in order to clear the air on this saga, Rachel requested copies of the documentation that Hawkins claimed to possess about Dr Denk’s “secret” earnings.  Her written request has been ignored.

Rachel asked me to analyze the situation from my experience and substantial bullpen data on ASI and the Estate of L Ron Hubbard.   Having no access to records I can only speculate.  Overall, it sounds to me like a sick sociopathic game of David Miscavige; pimping Stephen Price to play David Miscavige to Gene’s L Ron Hubbard.  Enturbulating, lying, and cheating him to the grave.

Here is further opinion, with facts provided in order to support that view.

Pat Broeker, who coordinated Estate matters and finances during Hubbard’s last five years on the road and at the Creston ranch, and David Miscavige put the church’s tax exemption at serious risk in the eighties because they could not account for the millions of dollars of cash relayed by Miscavige to Broeker to keep Hubbard’s operation operating over the years.

After Hubbard’s death, while we were negotiating with the IRS for tax exemption of all church related entities, the IRS required a detailed accounting of Hubbard’s Estate as a starter.   Miscavige used the predicament in his inimitable Machiavellian way to scare Broeker away from asserting “church” leadership because of his alleged personal criminal liability surrounding 1.8 million dollars that Broeker had received but could not account for.  Miscavige assigned attorney Monique Yingling to supervise a several month project wherein Broeker was made to hole up at Creston and through “creative accounting” make the missing 1.8 million dollars magically re-appear.

I know that a tremendous amount of that “creative accounting” involved Broeker doctoring a pile of receipts he possessed to add defensible significances to them.  Beyond that I do not know how Broeker, Miscavige, Yingling and Norman F. Starkey (the nominal executor of the estate of L Ron Hubbard, working for de facto executor Miscavige) managed to pull it off. I do know for a fact they were 1.8 million short and somehow wound up after several months “accounting” for it.

Knowing all this, I offer a possible scenario, that — while speculation — is far more credible than Miscavige’s silence.  That is, the Miscavige team created a half dozen or so “big ticket” item expenses that were never in fact expended to cover the substantial shortfall.  They could have carefully monitored Denk’s and other possible imaginary recipients’ tax filings to create income that would never be noticed or questioned by the IRS, given the timing and status of Hubbard’s final returns and the final returns of the “recipients.”  Not undoable, given that Denk along with other potential recipients had their returns prepared by compliant, cooperating Scientologist tax preparers.

Caveat.  This is speculation and opinion.  But, I feel comfortable sharing my thoughts given these facts:

1. I witnessed Starkey and Miscavige joking on numerous occasions about the ongoing “creative accounting” project of Broeker.  They thought themselves so clever by killing two birds with one stone: a) keeping Broeker off church management lines, and b) defrauding the Internal Revenue Service. I know for a fact they had to create 1.8 million dollars of “expenses” during the lifetime of Hubbard retroactively  – which they did to the satisfaction of a skeptical Internal Revenue Service.
2. Rachel Denk – like the authorities investigating the death of Biggi Reichert, e.g. – was flat out stonewalled by Miscavige’s Author Services Inc (ASI) when seeking to investigate the mystery.
3. There should no longer be a mystery as a great deal of information has now been made known to set the record straight. There is no possible reason for Miscavige to hide the ball unless of course disclosure would reveal fraud of the order of magnitude I have surmised here.

In short, the entire matter reeks of the skullduggery, fraud, deceit, cover up, vengefulness, and just plain nastiness that are the trademarks of David Miscavige.

If he has a better explanation, I am all ears.