From: Keith Henson <hkhenson@netcom17.netcom.com>
Subject: Billion dollar question
Date: 2000/03/02
Message-ID: <89mnqf$6m0$2@slb1.atl.mindspring.net>
Organization: MindSpring Enterprises
User-Agent: tin/pre-1.4-19990517 ("Psychonaut") (UNIX) (SunOS/4.1.4 (sun4m))
Newsgroups: misc.legal
Comments would be welcome on this matter. The Justice Dept (which defends
these suits) has asked for a delay. There are other developments such as
the French government report which urges the dissolution of scientology in
France for extensive criminal activities, particularly fraud and the
illegal practice of medicine. (LA Times, page 4, Tue, Feb. 29)
Keith Henson
Case No. 99-17038 Page 2
2. What are the facts of your case?
In 1993 (under massive coercion and possibly blackmail) the IRS
disregarded a Supreme Court ruling (Hernandez --see footnote 1) and granted
tax deductible charitable contributions for Scientology auditing and training
services.
At the same time the IRS promised to use and later did use
government resources to send Scientology promotional tracts all over the
world. (IRS cover letter to the German government provided to the
district court as an exhibit)
This lay person believes the latter is a violation of the
Establishment clause of the Constitution and the former is a violation of
the highest law of the land.
In the underlying case, I tried to bring this matter to the
attention of the courts in the only way available, by suing the IRS under
the Flast doctrine, seeking to overturn an administrative decision which
flies in the face of a Supreme Court ruling on the law, and seeking an
injunction to prevent further expenditures of government funds by the IRS
to promote what claims to be a "religion". The case was dismissed on the
basis of standing in spite of a strong similarity to Flast.
----------------------------
1) In 1989 the Supreme Court of the United States ruled in Hernandez,
"Payments made to the Church's branch churches for auditing and
training services are not deductible charitable contributions under
[section] 170" of the Revenue Code.*
Recently (November 1999) the Charity Commission for England and
Wales came to the same conclusion. See http://www.charity-
commission.gov.uk/ or Exhibit A/)
"After reviewing the practices of auditing and training, considered by CoS
to be the central features of the practice of Scientology, the
Commissioners considered that these are in fact conducted in private and
not in public and that in their very nature are private rather than public
activities such that no legally recognised benefit could be said to be
conferred on the public. It could not be concluded that the benefits of the
practice of Scientology extended beyond the participants. Accordingly
public benefit was not established."
-------end footnote.
Case No. 99-17038 Page 3
3. What did you ask the district court to do?
Enforce the Constitution and uphold the Hernandez decision of the
Supreme Court.
4. State the claim or claims you raised in the district court.
That the IRS exceeded its authority in overruling a Supreme Court
decision and in spending Federal funds (in any amount) to promote Scientology
which it had labeled a "religion."
5. What issues are you raising on appeal?)
In Flast, the Supreme Court held that a taxpayer will be a proper
party to allege the unconstitutionality of exercises of congressional
power under the taxing and spending clause of Art. I, Section 8, of the
Constitution. Flast, 392 U.S. at 102. Second, the Supreme Court required
that the taxpayer "show that the challenged enactment exceeds specific
constitutional limitations upon the exercise of the taxing and spending
power." Id.
Both of the above complaints fit under taxing and spending power of
Congress. In dismissing, the district court stated:
"First, Plaintiff is not challenging congressional power, but rather
challenging an executive branch action, the IRS execution of a closing
agreement with the Church."
Taxing (and spending) authority flows from Congressional power
granted in Art. I, Section 8 of the Constitution, and is limited by the
Establishment Clause, among others. An executive-branch action abusing
that power does not insolate such actions from judicial review. In Bowen
vs Kendrick, 487 US 589, 108 S.Ct 2562, 101 L.Ed.2d 520 (1988) the Court
held that federal taxpayers have standing to raise an Establishment Clause
challenge to a congressional spending program -- the Adolescent Family
Life Act (AFLA)-- as applied by the Secretary of Health and Human
Services. See id. at 618-620, 108 S.Ct. at 2579- 80.
The fact that "funding authorized by Congress has flowed through
and been administrated by the Secretary" does not make for "any less of a
challenge to [the] congressional taxing and spending power . . ." 620,
2580. Moreover, this case seems to say that taxpayer standing is easy to
get in
Case No. 99-17038 Page 3 (continued A)
Establishment Clause cases, and that the only time this is not the case is
where challenged government action is made pursuant to authority the
Constitution grants to the Executive Branch.
"In subsequent case, most notably Tilton, we have not questioned the
standing of taxpayer plaintiffs to raise Establishment Clause challenges
even when their claims raised questions about the administratively made
grants" 619, 2580."
Lamont vs Woods 948 F.2d 825 essentially follows Bowen and Flast,
that effectuation of a Congressional Act by an Executive Agency does not
prevent taxpayer actions within the scope of Flast. This is, I believe,
controlling law in the Ninth Circuit.
Indeed, Flast vs Cohen was itself a case against an
executive-branch agent, the Secretary of HEW (Cohen), to prevent spending
tax money on textbooks for religious schools.
Flast, Lamont, Bowen, and this one are all cases where
congressional authority to tax or spend was delegated to executive
agencies. The distinction in this case is that the Supreme Court has
already ruled in Hernandez that Section 170 of the Revenue code does not
permit what the IRS granted Scientology. Nonetheless, I am still
challenging the constitutionality of Section 170 of the Revenue Code as
applied to Scientology by the IRS.
The district court went on to say:
"Second, Plaintiff has failed to show, and cannot show that the IRS'
conduct exceeded constitutional limitations. Plaintiff has alleged that
the IRS' conduct violated the Establishment Clause of the Constitution."
The spending of tax funds to distribute promotional material
worldwide for Scientology seems a particularly clear violation of the
Establishment Clause. The amount of money involved was not large, perhaps
only a few thousand dollars; but principle, rather than some threshold of
expenditures, is the legal point, and worthy of injunctive relief.
Otherwise the IRS would be subject to other "religious" organizations
suing or threatening to sue unless the IRS distributed their promotional
materials.
Case No. 99-17038 Page 3 (continued B)
The district court continued:
"However, Plaintiff's constitutional challenge is without merit in
light of the Supreme Court's holding in Hernandez V. Commissioner, 490 US
680 (1989)."
It is beyond my comprehension how the district court could make
such a holding in the face of the clear interpretation of the Section 170
of the Revenue Code to the contrary in Hernandez. If the Supreme Court
had said that the IRS could do whatever it wanted in such cases, then a
reversal of the IRS's previous position could escape legal challenge.
But the Supreme Court did not give the IRS any leeway when it
interperted the law with the unequivocal words:
"Payments made to the Church's branch churches for auditing and
training services are not deductible charitable contributions under
[section] 170" of the Revenue Code.
When the Supreme Court interpreted Section 170 in Hernandez, it
closed off the IRS's administrative freedom to say "payments are
deductible charitable contributions under Section 170 of the Revenue
Code." The IRS knew they were stepping over the line because they went to
great lengths to keep the agreement with Scientology secret.
Case No. 99-17038 Page 4
6. Did you present all these issue to the district court?
Yes, and a number of supporting matters about the secret agreement
as well. Also about matters of funding abuses of the legal system with
tax deductible funds and hiring agents to subvert the legal process.
These filings are part of the designated record.
7. What law supports these issues on appeal?
Flast vs Cohen 392 U.S. 83, 88 S.Ct. 1942 (1968)
Bowen vs Kendrick 487 U.S. 589 108 S.Ct 2562, (1988)
Hernandez vs Commissioner 490 U.S. 680 (1989)
Lamont vs Woods 948 F.2d 825 US Court of Appeals
snip
Respectfully submitted,
Dated January 11, 2000 ____________________
H. Keith Henson
P.O. Box 60012
Palo Alto, CA 94306
650-325-7533