Accountability: Where Does Your Money Go?

A friend of mine, let’s call him Joe, was at Flag one day and was approached by one of the reges and asked to contribute more money to the Superpower Building.  Joe was already a Cornerstone Member, meaning he had contributed over $35,000 to the building.

“I thought you had all the money for the building,” Joe commented. “Why do you need more?”

“Well,” explained the reg, “Some of that money was used for the Oak Cove Building.”

“What do you mean?” said Joe, outraged. “I paid for the Superpower Building, not the Oak Cove Building.”

The reg tried to explain how the funds all went into a general building fund, and it was used for any of the Flag buildings and so on. But Joe was having none of it. He refused to contribute further. Now he’s quit the Church in protest of this and other outpoints.

Collecting money for one thing and then spending it on another could be called many things. Fraud is one of them.

The Church provides no transparency or accountability for the monies donated by public. But let’s look at a few of the facts we do have access to:

A poster at ESMB keeps track of the Cornerstone Newsletter, published several times a year, which provides complete lists of everyone who has donated $35,000 or more to the Superpower Building. It also lists their contributor status, which is ranked according to how much they have contributed, from Cornerstone Member ($35,000) to Legion of OT Meritorious ($7,500,000). By multiplying the number of contributors in each status by the minimum amount required for that status, we get a low-ball figure for the amount collected so far. Low-ball because it is the minimum amount, and does not account for those contributing more in that category or those contributing under $35,000. His total, as of two years ago, August 2007, was $ 142,760,000.

Now let’s contrast that with the Church’s statement to the St. Petersburg Times in a March, 2009 article.

“Wright [Bob Wright, a Scientology staffer overseeing construction] said the building has cost about $40 million so far, and the church expects to spend $50 million finishing its elaborate interior. He leafed through 800 sheets of construction drawings for it. ‘It’s been planned to within an inch of its life,’ he said.”

Do you see a discrepancy here? The Church, by its own newsletter figures, has regged over $140 million for the project, which is projected to cost $90 million. According to my figures, that’s $50 million unaccounted for. Fifty million dollars.

Where did that $50 million go? Well, part of it, according to Joe’s reg, went to the Oak Cove renovations. Part of it, we know from that same St. Pete Times article, went for over $245,000 in city fines levied for not bringing the empty shell up to code.

But let’s do a few other comparisons. According to this website, the average cost per square foot for office building construction in Florida is $135.00. This is for Miami, and they don’t list Tampa, but one can’t imagine Tampa costing more than Miami. But $90 million for 380,000 square feet, according to my calculations, is $236.00 per square foot. According to the same website, the most expensive office construction costs in the U.S. are in New York City, where it’s $200.00 a square foot. So why is this building so expensive? Waste? Mistakes? Changes? There’s no way to know, as there is no transparency, no accountability.

Now factor in the probability that the bulk of the interior construction will be done by RPF labor – people who are paid pennies an hour, live in mass dormitories, and eat communally. One would have to ask why the internal construction would cost that much. Scientologists should know how much labor is being done by RPF, not only because of cost, but as an ethical point. We object when WalMart or Nike use sweatshop labor, why not when Scientology does?

And what about executive compensation? David Miscavige reportedly pays himself a six-figure salary, despite having his housing, food, transportation, clothing and other expenses covered by the Church. And despite other Sea Org Members being paid about $50 a week. Where is that accounting?

How about some financial accountability from the Church of Scientology? Is that an unreasonable demand?

No, as a matter of fact, it isn’t. Other Churches and charities have faced similar issues, and have adopted standards of financial accountability and transparency.

This 2002 article in the New York Times notes that “20 percent of American congregations lose money to people entrusted with church finances,” and lists a number of instances of churches which faced issues of financial accountability. Executives from a number of churches were found guilty of ripping off hundreds of thousands of dollars, even millions, from donations received from congregations for various church projects. In one case, extensively investigated by the Kansas City Star, church leaders had solicited funds from members for building projects which were never done, or which languished in an incomplete stage for years. Sound familiar?

Another article here, about another church, notes:

“The New Apostolic Church is one of very few remaining organisations that cloud its financial affairs in secrecy. Not even members of the church are allowed access to financial statements. No provision is made in the constitution of the New Apostolic Church International or, as far as we know, in any of the constitutions of the various Apostle Districts for financial reporting to members.  Members experience a great deal of pressure to contribute ten percent of their gross income to the church. Yet the leaders of the church do not report to members on how their contributions are spent. This is an ideal situation for mismanagement of funds.”

Scientology is one of those “few remaining” organizations that provides no financial accounting of donations.

To guard against such financial abuses, several organizations have adopted standards of financial accountability. A compendium of standards, codes and best practices is here. Two of the best known are the standards of the Evangelical Council for Financial Accountability. Another is the Standards for Charitable Accountability of the Better Business Bureau.

Some of the key points are these:

Governance and Oversight: Having an active church board is stressed. At least some of the members of this board should be lay people, not organization staff. The BBB recommends that no more than one board member be directly compensated by the organization. The ECFA recommends a church board of at least five people, none of whom are staff, or related to staff. All agree that there should be lay oversight of church expenditures. The board authorizes a full yearly audit of the church’s finances and transactions.

Measuring Effectiveness: The board conducts a regular review, yearly or bi-yearly, of the organization’s performance and effectiveness and determines future actions required to achieve its mission. This board, by the way, also conducts a yearly review of the CEO’s or leader’s performance.

Finances: Complete annual financial statements, prepared in accordance with generally accepted accounting principles, are to be prepared and published. Included in the financial statements is a breakdown of expenses (e.g., salaries, travel, postage, etc.) that shows what portion of these expenses was allocated to program, fund raising, and administrative activities.

Is this too much for Scientologists to ask of their Church?

Maybe there’s nothing wrong, you say. Maybe the Church is being fully responsible and ethical in its use of public donations.

Maybe.

But full transparency and accountability would show that too, wouldn’t it?

Added Note: for more information on this, see the recent post on Marty Rathbun’s blog.