Scientology Wins Appeal In Lawsuit Alleging Forced Labor and Forced Abortions

Categories: Scientology

The Headleys
California's federal Ninth Circuit Court of Appeals today posted its affirmation of a lower court's decision to dismiss a lawsuit against the Church of Scientology brought by two of its former employees, Marc and Claire Headley.

The Headleys had worked at Scientology's International Base near Hemet, California until they left it in 2005.

They sued in 2009, claiming that as Sea Org members making about $50 a week for 100-hour weeks of work and with the prospect of being hunted down if they dared to leave, that they had been victims of human trafficking violations. Claire also alleged that twice she had been forced to have abortions in order to keep up that level of work, and had been threatened that she would be separated from her husband and kicked out if she didn't terminate her pregnancies.

Judge Diarmuid O'Scannlain of the Ninth Circuit found, however, that the Headleys had many opportunities to leave their jobs and the Sea Org but did not do so, undercutting their claims that they were forced to work under terrible conditions.

I just called Marc Headley, who was unaware of the decision.

"Well, we did what we could do," he said. And he told me he has other things to focus on. "We have our third kid on the way."

The LA Times summarizes the decision well. From their story:

"In keeping with church disciplinary policy, the church censored the Headleys' mail, monitored their phone calls, and required them to obtain permission to access the Internet," Judge Diarmuid F. O'Scannlain, an appointee of former President Reagan, wrote for the court.

Marc and hundreds of others had to hand clean human excrement from an aeration pond in 2004, and Claire had to subsist on protein bars and water for six to eight months in 2002, O'Scannlain wrote. But the court said the evidence overwhelmingly showed that the Headleys voluntarily worked for the Sea Org "because they believed that it was the right thing to do" and "enjoyed it."

Although the couple faced the risk of being declared "suppressive persons" and possibly losing contact with family and friends if they left, that potential did not qualify as "serious harm" under the human trafficking law, the court concluded.

And Marty Rathbun's take:

The "church" will call this a landmark victory. Miscavige will certainly be tickled pink. After all, they have once again thrown L. Ron Hubbard and Scientology under the bus of public opinion. They have created a Circuit Court opinion that finds a lot of creepy behavior is motivated by belief in the Scientology religion.

Those who have been watching know that in the end it was Marc and Claire Headley who won the bigger victory. We know for a fact that the filing of the suit (and all the sweat, blood and tears Marc and Claire spilled in litigating it) resulted in cancellation of Scientology Inc's forced abortion policy. It also resulted in dozens of former Sea Org members receiving substantial compensation (pay offs to remain silent - but compensation to create new lives nonetheless).

And, who can tell us how many people were spared the more drastic versions of the following at the hands of Miscavige because the Headley's stepped up?

And some thoughts from our legal expert, Manhattan attorney Scott Pilutik:

It's not an unreasonable interpretation of the Trafficking statute, though it's unfortunate that the Circuit court upheld the abuse of discretion of argument regarding Dr. Levine's psychological coercion testimony, which was obviously key to supporting the argument under the statute. The statute requires some showing that they at least felt reasonably threatened. Without Levine's testimony explaining why it was reasonable for Marc and Claire to be unable to just up and leave, it was only their word against a cult deeply determined to defeat this case.

With regard to some comments I'm seeing opining whether this was brought under the "right" or "wrong" law, I'll mention that there is an inherent risk-reward component here. In baseball terms, if you swing for the fences you're more likely to hit a home run... but you're also more likely to strike out. If the Headleys' human trafficking case was successful, it would have had a massive impact on how Scientology treats its staff members going forward. I don't recall why the labor law claims didn't survive, so I'll leave that alone for now.

The decision also contained a minor victory inasmuch as it declined to rule on (and thus bolster) Scientology's ministerial exception claim, especially since it appeared to be leaning in favor of the District Court's interpretation. Within that dicta, however, I'm unpersuaded by the court's somehow equating "lifestyle constraints, assignment to manual labor, and strict discipline, [et al.]" to be religiously motivated, else anyone's acceptance of horrific working conditions be also construed as "religiously motivated." The work performed by Claire and Marc was of a sort that Scientology could have relatively easily replaced them with personnel having zero knowledge or interest in Scientology.

I'm going to post the entire decision by O'Scannlain here.


















See also:
Scientology's president and the death of his son: our complete coverage
What Katie is saving Suri from: Scientology interrogation of kids
Scientology's new defections: Hubbard's granddaughter and Miscavige's dad
Scientology's disgrace: our open letter to Tom Cruise
Scientology crumbling: An entire mission defects as a group
Scientology leader David Miscavige's vanished wife: Where's Shelly?

Please check out our Facebook author page for updates and schedules.

Tony Ortega has been the editor in chief of the Village Voice since March, 2007. He started writing about Scientology in 1995. You can reach him by e-mail at, and if you ask nicely he'll put you on his mailing list for notifications of new stories. You can also catch his alerts at Twitter (@VoiceTonyO), at his Facebook author page, on Pinterest, a Tumblr, and even this new Google Plus doohickey.

New readers might want to check out our primer, "What is Scientology?" Another good overview is our series from last summer, "Top 25 People Crippling Scientology." At the top of every story, you'll see the "Scientology" category which, if you click on it, will bring up all of our most recent stories.

As for hot subjects we've covered here, you may have heard about Debbie Cook, the former church official who rebelled and was sued by Scientology. You might have also heard about the Super Power Building, Scientology's "Mecca," whose secrets were revealed here. We also reported how Scientology spied on its own most precious object, Tom Cruise. (We wrote Tom an open letter that he has yet to respond to.) Have you seen a Scientology ad on TV lately? We debunked some of the claims in that 2-minute commercial you might have seen while watching Glee or American Idol.

Other stories have looked at Scientology's policy of "disconnection" that is tearing families apart. You may also have heard something about the Sea Org experiences of the Paris sisters, Valeska and Melissa, and their friend Ramana Dienes-Browning. We've also featured Paulette Cooper, who wrote about Scientology back in the day, and Janet Reitman, Hugh Urban, and the team at the Tampa Bay Times, who write about it today. And there's plenty more coming.

My Voice Nation Help

Anyone still out there?


I have just published a more extensive write-up on the appeal court ruling at Infinite Complacency, built around an analysis by the lawyer who filed the original lawsuits, Barry Van Sickle.


It is much longer than I usually post and perhaps not the easiest read, but I thought it was worth exploring the issues in detail so as to take advantage of Van Sickle's informed opinions.


Jonny Jacobsen

Infinite Complacency

BurytheNuts 2 Like

Damn It Tony you are killin" me with the cryptic tweets.

And i am an IPA fan so that is a double whammy.


Quit drinkin beer and start bloggin!!!!!

U R Killin me man.

5lttlestones 4 Like

Which legal route seems to address the real issue at large here?


if we look at the 9thCircuit Court of Appeals decision that sided with Scientology then we must assume that pain and suffering have no merit when up against the cult. Essentially we are told by the 9th Circuit Court of Appeals ,Caveat Emptor !, which means Buyer Beware! in latin. if you buy into the cult then you should seek knowledge to inform yourself of its ways and then get yourself out of it. However, today i found this blog by Peter Reily on has posted this article by Peter J Reily, a contributor, who writes about tax issues of individuals , businesses and more as he states in his profile description. The article sites ,Scott Pilutik, a Legal Analyst for the Village Voice, here is the link to the article Peter J.Reily posted yesterday ;


Of course, cranky, old koot , Peter J.Reily is not fully convinced of Scott Pilutik's analysis but to me, Scott's analysis slices clean through the Achilles tendon of scientology, and could not have addressed the issue more eloquently.


this is a part of the article that captured my attention and what may be a plausible legal challenge that scientology can not win. 


"The best way to begin answering this is to first puncture a popular misconception. People often conflate recognition as a religion and recognition as a tax exempt § 501(c)(3) entity as being effectively the same thing. But the IRS does not make determinations of an entity’s religiosity. In fact, the IRS is constitutionally prohibited from even entertaining the question. Whether Scientology is or is not a religion is thus a red herring–a philosophical as opposed to legal question, far outside the scope of the tax exemption question.

The IRS instead considers whether the organization maintains a “religious purpose,” which the IRS attempts to divine by asking (1) whether the beliefs of the organization are “truly and sincerely held,” and (2) whether the practices associated with the organization’s beliefs are not “illegal or contrary to clearly defined public policy.” Crudely restated, a qualifying religious organization must not be a sham, and it must not be morally repugnant."


Peter J.Reily of is not convinced by Scott Pitlutik's legal analysis of the tax exempt status of scientology. 


Anyone who reads Tony Ortega's in depth analysis and extensive research would know that that all we commenters bang on about , which is ; the cult of scientology is MORALLY REPUGNANT TO THE MAJORITY OF PEOPLE WHO HAVE FALLEN VICTIM TO ITS WANTON and HEINOUS ABUSES OF ITS "BLOWN" MEMBERS! 


Two, separate and sovereign nations, France and Germany found scientology to be a fraud. Would it not be obvious that with the empirical proof as set forth by France and Germany , would that not be enough to set a legal precedence that scientology is not worthy of tax exemption? 


What about the first criteria for tax exempt status which Pilutik outlines that is "whether the beliefs of the organization are truly and sincerely held" ? would it not explain why scientology so feverishly attempts to convert celebrities to aid them in the spreading of the cult's beliefs? 


Here we all are reading these posts by Tony and getting very emotionally moved by the on going and increasing tragedies committed by scientology's Fair Game practices, disconnection practices which so cruelly did not allow Karen de la Carriere to see the body of her deceased son prior to cremation , the forced abortions as were outlined in the Headley's case. Is it not just the most morally corrupt and morally repugnant transnational corporation of all time that pays no taxes?


scientology knows the game of exhausting and wearing down its opponents and critics with one legal battle after the other.


People, its an election year! have any of you thought of addressing this issue with either one of the candidates? I would love to hear Romney and President Obama address this issue about the cult of scientology.


Why are not the Law schools across the country not reviewing the constitutionality of the tax exempt status of the cult? U.C. Berkley , Georgetown, Harvard Law Review, Yale , Princeton, and all the rest WHY DONT YOU START MOVING YOUR ARSES AND HELP FIGURE OUT THE LEGAL CHALLENGE! COME ON ALLEN DERSHERWITZ! SOMEONE STAND UP! 




RIPAndrewWordes 2 Like

 @5lttlestones Thanks for your links.  It's astonishing to me that with all this coming out about what's going down right in their midst, the LA City Council has got its head firmly in the sand.  And the councilmen and women are very busy attending to other business this week. 

5lttlestones 1 Like

 @RIPAndrewWordes lets do some math ...ummmm how many scientologists constituents do we have in the L.A. district? too many to follow through with what is right and just! 

5lttlestones 1 Like

 @California it is sooooo true and the greatest part of Californians when they actually want to change something they make it happen. I am a little biased, being Californian could be why. Yet every where I go I am hearing the sentiment of total disgust against this cult. one point which came to mind was these Sea Org members who are working 100 hour weeks and making $50.00 a week in compensation...many of these folks who staff are also on food stamps and government assistance, so essentially the U.S. tax payers are PAYING FOR THE SCIENTOLOGISTS while Miscavige lives like a king. isnt that nice?


  John, there are far more ex-scientologists here, though in terms of money the Cult does have some influence.

California 3 Like

 @JohnPCapitalist Back in 2006/2007, determined neighbors in Leona Valley, with the support of some activists, were able to stop SCN from establishing a "Narconon" on a dangerous, windy, two-lane road.  Initially the 5-member Board of Supervisors for LA County (arguably the most powerful county BOS in the US), rolled over for a Planning Commission report permitting the change of the purpose of the almost-vacant Scientology land to a Narconon facility.  But with the support of the Michael Antonovich District 5 Supervisor and his excellent staff, plus hard work creating a 100+ page document refuting the Planning Commission claims of safety, plus an appearance before the BOS and hearing before the Planning Commission, the permission was revoked.  

This is just one example of how good people, well-organized and working together can get the government to do the correct thing.

Find your issue and work hard on it.


 @5lttlestones  @RIPAndrewWordes 3.8 million people in Los Angeles.  Perhaps 10,000 Scientologists on a good day if you stretch the numbers a bit.  They are not many votes but they are enough of a pain in the ass that they wield disproportionate power. But a well organized pressure campaign would cancel out whatever political clout they may have accumulated. 


It is just inertia of elected officials rather than numbers or bribes that allows the cult to continue to do its dirty deeds without more scrutiny.  When a whole lot of people demand that the government do something about the cult, something will happen.

Jgg2012 2 Like

  A good case to look at is Molko v. Holy Spirit (California Supreme Court) in which Moonies were found liable for fraudulently inducing people to join the church (of course, after joining, they "enjoyed it at the time")--this shows how to claim fraud vs. a cult in California.

victoriapandora 2 Like

On chapter 15 of Marcs book, "Blown for Good", it's a real page turner. I should have got it sooner!!

Flynnie 2 Like

 @victoriapandora Blown for Good was probably the first sci-related book I read about the cult, after having gotten most of my information from the interwebz (stumbled across a Tory video where she gave a talk about the abuses and from then on, I was hooked).  I thought BFG was well written -- and frightening -- and it led me to read more books on the subject.  I still have a few in my library to get to, but Marc Headley's book was the catalyst, for sure.  

Jgg2012 2 Like

  As to the statute of limitations, it is generally from the time you "knew or should have known" and the are California cases on point (search "Weatherly" for example) but varies from state to state.  Ask a lawyer.

markfisher57 5 Like

I would first like to say that the real winners are Marc and Claire Headley. They have moved on with their lives outside the destructive Scientology cult and have 2 wonderful young sons and a 3rd baby on the way. That is the way to really flourish and prosper!! As for the decision, the media when they ask what the Sea Org is and does and what it is about, can now read this decision. The court lays out the abuse and conditions as "standard operating procedure". I wonder how many people reading this decision before hand would still join the Sea Org, knowing they were forfeiting their Constitutional rights?


 @markfisher57 I couldn't agree more with Mark~! Marc and Claire have done fantastically since they've left the Sea Org, and even this...although it was a "loss" is on the books for their abuses as "SOP" as Mark Fisher says. Also...I know few people make money on a Class Action Suit, but what IF E V E R Y single Sea Org member who is out, figured out ONE thing they each experienced the same (As that's part of a Class Action suit, per my understandings--the people have to ALL have one thing in common). Make it something *other* than what's in this...and just go for it. Granted, it would be long, and drawn out. So? The Punitive Damages would be what would KILL them, in the end.  Just a thought....oh, and we'd need an attorney. I could be in on one for Medical abuse...and so could probably many others. For we on RFW---Libel. There are MANY areas still to uncover. Tick Tock, Davey boy, Tick tock.....:)  Tory/Magoo~ Your local, friendly SP!


Great piece on Tomkat. A lot of new stuff (to me) and the comments on whether TC is or isn't are pretty interesting.

TheProprietor moderator 8 Like

 @media_lush I thought that piece was pretty reprehensible. The author apparently has no experience with people who divorced church members and then fought for custody. Also, it's pretty easy to say that Katie left as a career move, knowing that she could never defend herself. Also, he pats himself on the back way too much for "reporting" that Tom is not gay -- which anyone who actually covers the man knows full well.

media_lush 1 Like

 @TheProprietor my comment there:


I'm not too impressed with this piece at all - the obvious bits people have pointed out here show how little the author bothered to check before commentating.   


but the thing that really got my ire was the final piece which seems as though it was written by a scientology shill.    "But Scientology, or rather its terrible reputation.....    .... "reputation?"..... I'm sorry, but there is enough stuff out there that using the word reputation is an insult to all those who have suffered at the hands of this cult. I'm not talking your standard gossip site fare I'm talking about actual court documents of abuse. These are incredibly easy for anybody to lookup.... just Google "judges comments + scientology" and you can be reading the cult crap and what JUDGES (not blog hacks) think of scientology.   


maybe the writer of this piece needs to go back to school to understand journalism basics.   


.... the only thing worth reading here was the comments by those convinced TC is gay based on close to first hand experience.

victoriapandora 1 Like

 @TheProprietor  @media_lush

 Don't let it burn you out Tony. You know you got the goods... SCNs want to save the planet, but the media is beyond saving. That's what makes you super-ultra special;) You're smarter than an e-meter, I do declare. Ohhh, no pun intended about that declare word;)

villagedianne 2 Like

 @TheProprietor  @media_lush

 Some of the stuff in the Vulture piece seemed to be a rehash of the People Mag article where it was claimed that COS was not an overriding cause of the split, and that Katie left because she did not like the way here life and career were going.  And that  Katie was displeased that she was not as successful as Kidman.  The article seemed to come from Tom's PR machine.

media_lush 1 Like

 @TheProprietor when I said "great" I should have qualified that a bit in the sense it was more about apparent 'new gossipy info'... the Kidman phone call etc.... I will be going back to make a fe comments later.... the first hand account comments regarding TC were amazing though.


One thing I think is pretty interesting is that I can't find the first court case regarding Tom Cruise's sexuality anywhere on Google. [If it's not on Google did it ever really happen?].


I would be delighted if any UK visitors can back this up but there was a case involving The Face magazine in the early 90's where a claim was made similar to the Travolta masseur/sauna thing (If memory serves they actually named the guy). The Face didn't back down but the massive costs (obviously drummed up by the scion goons behind the scenes) eventually forced them to back down. It got to the stage that they were going to have to go into foreclosure if they were forced to pay his legal fees. Cruise rather magnanimously just accepted an apology and issued a public statement along the lines that he he would 'sue anyone anywhere in the world, no matter how it cost if his sexuality was brought into question'. 


Two things I thought about this - the first was why doesn't this appear on Google. The second is why doesn't anybody try and track this guy down..... but then again this was 20 years ago.


Anybody else remember this story?



AussieCase 3 Like

In the $cn organizations, a staff member signs documentation indicating that it is all agreed to willingly. In addition people are prompted to write success stories of how things are "going well" and fulfilling a higher purpose, and they are taught to keep their concerns and doubts quiet. Ultimately this leads to a lot of documentary evidence indicating willingness, and a desire to go along with the $cn organizations. 



pickanotherid 1 Like

Too bad they ended up in the 9th Circuit, which seems to side with the Cof$ more often than not from what I've seen over the years.

PatTheBunny 3 Like

There is so much to be addressed, here we go...


1. Marc and Claire bringing the lawsuit, good for you. I'm sorry to hear that the judge ruled in favor of co$.


2. You are expecting number three, Claire? Yay! Congratulations to the whole family.


3. Your family will remain in my prayers.


4. Scott, many thanks for the additional insight on the judge's ruling.


5. last and certainly not least, the venerable Tony Ortega who facilitates the conversation about the despicable subject of $cn and his commitment to "telling it like it is." Much appreciation to one and all.


victoriapandora 3 Like

Just downliaded Marcs book; "Blown for Good." Wow, Marc lived right across the street from the Manor when I lived there. He was around when the shot the "48 Hours" elevator scene there. What a mess that was, we had to take the stairs (I lived on the forth floor) for weeks. It turned out to be a two second scene in the movie. Something else you get used to after living in Hollywood for a while. I am thinking Marc lived on Venice Beach at the same time I did also. Small world. At any rate let's hope this latest news boosts his book sales!

Sherbet 7 Like

Just like battered spouses who continue to go back to the batterer, people on the outside of the situation just can't understand it, but obviously, for thousands of people, it's a real compulsion.  That's how I explain scn to myself, that for some unfathomable reason, possibly explained by brainwashing or Stockholm Syndrome or fear tactics, people in scn want to stay there.  I can't understand it, not everyone can understand it, but it's there.  And the main issue for me is that the reign of terror, based on the "make it up as I go along" theories of a lying madman, has to stop.  Beatings have to stop.  Manual labor and starvation punishments have to stop.  Lies and secrecy and BS have to stop.  Money sucking has to stop.  Coverups and retaliation tactics have to stop.  The truth has to prevail, and learning and getting the truth out there is our mission, whether or not we were inside, and whether or not we can understand it.  There are too many exes telling the same stories for them not to be just tales of the "bitter apostate."  I've learned here how scn isn't some harmless, nutty little religion.   I don't have to get inside the head of every ex, indie, or insider, and I don't have to learn every legal nuance to the Headley's case or any others.  All I have to know is that scn is dangerous, and I tell everyone to read the truth here at VV.  That's all I can do. 

Daisy 3 Like

 @Sherbet Robert Vaughn Young (who is absolute must-reading to those who really want to understand this cult) wrote on the likeness between getting stuck and free from a cult and domestic violence:

AussieCase 1 Like

 @Daisy I also had tried to leave, and I was "talked" back in. Perhaps it is like a relationship that you would like to end, one that you are accustomed too, and where you risk being talked back in if you so much as pick up the phone too soon.In this case, I believe the lingo of the B.S. "tech that always" works, the simplified way of looking at the world, all provide a comfort, a feeling of understanding, and even belonging.  The lingo is perhaps like pet names in a relationship that conjure up feelings, memories, and ideas. Once we hear the words again, we know how to respond.


I have gone years without thinking of $cn, and reading over this site, and some others, in the last few days, I noticed the lingo, along with some memories, are being stirred. 


Sherbet is right, $cn is dangerous.


5lttlestones 1 Like

 @AuzzieCase  @Daisy well that is understandable, look how the cult manipulated your mind to follow orders like sheep! that is bound to have a lasting impression on a person. there is nothing those nut bags can do to you anymore so i hope you are able to over come those feelings and bad memories. :-) 


 @Daisy Wow.  Powerful stuff.  Thanks for sending that.  If there's anyone here who hasn't read this, please do it now.


Thank you.  Going to that link right now.

MrsVonTrapp 1 Like

I do not understand what abstract concepts such as "being happy" or "liking or not liking something" have to do with this case. In a court of law, it should be factual evidence that matters, not people's abstract ideas. I was under the impression that the Headleys had enough evidence on their side to prove that the CoS violated their rights, broke the law, etc. For example, the evidence of the police officer who had to intervene (to prevent OSA Ops from running his motorbike off the road and possibly killing him) on Mark's behalf when he escaped. Whether or not someone likes something sometimes should have no bearing on whether the other party broke the law or not. CoS lawyers wanted to influence the Judges to think about this case a certain way- and they succeeded. That is why this outcome, in my opinion. It is the same exact thing Scientology does to all of its victims- it gets them to think about things a certain way. Now maybe all those never in who seem incapable of ever grasping WHY someone buys into Scientology will see that their wiley techniques even work on Judges in Courts of Law.


If a victim is mugged, beaten and robbed and the perp caught, would the police drop charges because the victim states "I want to press charges even though I enjoyed some of this experience"? Go figure.  

jhamby 6 Like

I've been reading _Counterfeit Dreams_ by Jefferson Hawkins on my Nexus 7 and finding it fascinating. Between Jeff's story and this one, both about sincere and talented people giving their best to an organization that treats them miserably, which is itself so dysfunctional that nothing productive can get accomplished, I thought I'd share a bit of my story and the parallels between a dysfunctional tech company and... whatever Scientology is.


The short version is that in 2005 I started working at a company called Danger, which designed the OS and hardware of the "hiptop" proto-smartphone, most well known in the U.S. as the T-Mobile Sidekick. As a privately-held company, we were set to go public in early 2008, and had just released the first set of required SEC documents (NASDAQ: DNGR), but we never got the chance because we were swooped up and acquired by Microsoft instead (for $500 million).


I only lasted a year into the acquisition. They put us to work on a secret project called Pink, which ended up as one of Microsoft's most notorious flops of all time, the Kin phone. It only sold around 5000 units (not a typo!) and shipped with so many bugs that Verizon pulled it from the market after only 40-some days and the launch of the international version was canceled. Oh, and somewhere along the way, they managed to completely destroy the Sidekick databases where all the user data was stored (this being one of the earliest phones with everything backed up to "the cloud", this was extra bad if the phone crashed, because it would wipe everything and try to download a new copy from the server). Fortunately, after heroic forensic efforts at great expense, plus a huge payment to T-Mobile for completely breaking their SLA (service-level agreement) with the weeks of downtime, the database was eventually reconstructed and very little user data was lost.


Fortunately, two-plus years at Google has removed the awfulness of those times past, but as a sensitive artistic type, the thing that grated on me the most was knowing, at a deep intuitive level, that the direction they were going was bound to go off a cliff. It's pretty obvious at this point, both in the technical and financial worlds, that MSFT is slowly losing their relevance and not agile enough to catch up to where iOS and Android are now, much less where they will be in one year or two years.


But there's this ideological barrier at the very top (Steve Ballmer) and his Lieutenants where they say everything has to be based on Windows and you need to have lots of meetings and powerpoint presentations and middle managers running around, and all the stuff described in the "Microsoft's Lost Decade" story in the current Vanity Fair.


Bringing things back to Scientology, they have a lot in common with Microsoft in the sense that everything seems to make a lot of sense at the micro level, but less and less sense the farther out you zoom. Microsoft has tens of thousands of extremely talented software engineers, and yet they're doomed because the guys at the top live in a fantasy world where they think that people actually *like* Windows, instead of being forced to use it because it runs the software they need to use, or the games they like to play, or corporate IT standardized on it, etc. But nobody pumps their fist in the air screaming *I Love Windows* except for Steve Ballmer, and of course the yes-men and yes-women he's surrounded by.


So David Miscavige and Steve Ballmer seem to be suffering from very similar types of problems: neither one has a good view of the situation because they're so immersed in their respective bubbles. And the more that people at the lower levels try to correct things, the more frustrated they get because the politics essentially make any meaningful change impossible.


I guess the biggest difference is that Microsoft's big picture still makes some sense at Steve Ballmer's level. They are writing software that more-or-less does what they say it does. It's just that they have competition now in a lot of spaces where they used to be the uncontested monopoly (I'm typing this on last year's model of Samsung Chromebook, for example, and I love my MacBook Pros).


In contrast, Scientology, at a big picture level, is completely batshit insane.

PoisonIvy 3 Like

 @jhamby Brilliant analogy!  Watch the doc (and read the book) "The Smartest Guys in the Room" about Enron.  Same principle!  Enron's corporate culture was much like a cult, where the carrot was money and the stick was not being perceived as one of the best and the brightest, or being unable to see how brilliant the company was.  Those particular hot buttons worked for the employees there, even when many of them had that same gut feeling that they were living in a dream world.  Of course, they could quit at any time.  But theoretically, they were supposed to be working at the most innovative company on earth.  There was cognitive dissonance there.  "How can I be so unhappy?  What's wrong with me?"  The human mind can create prison bars where not exist in reality.

C_Shell 1 Like

 @PoisonIvy You made me shudder at the memories. As I read the book, I had to 1) put it down and take a walk or 2) pour another glass of wine, just to get through it. I sat across the negotiating table from those very a**holes at Enron during the days covered by the book and will never forget how miserable and demoralized we all were. Later, as I watched the Enron guys come apart at the seams, go to jail or die (in Ken Lay's case), I could barely feel the moral justification of having survived without feeling like a shadow had passed over my grave. They were that evil.

PoisonIvy 1 Like

 @C_Shell Wow.  Sounds like it was a profoundly disturbing experience for you.  Hard to imagine.  I remember reading about how they gloated over the California blackouts - I lived in LA then and it made my blood boil.  I blamed it all on Gray Davis. Old people were going to the hospital w/out AC in the heat and these guys were just counting their millions.

JohnPCapitalist 6 Like

 @jhamby Congratulations on your escape from Microsoft; glad that being at Google/Android has made you happier. When we in Global Capitalism HQ saw the Danger acquisition, some at other firms thought this could be the spark for a viable mobile strategy, but those were few and far between.  We figured it would sink into the swamp like all the other deals they've done under Ballmer.  I enjoyed reading the details you related, which confirmed our thesis utterly.  


Yes, Ballmer and the top management are out of touch with reality -- they've been surrounded by "yes men" for decades, like most big companies.  They constantly do surveys to "prove" they're making customers happy, but the surveys are self-deceiving as the underlings look for  ways to prove to top management that they're getting the job done. 


What grips Microsoft is not insanity but just the inertia of their success.  I remember getting in a huge argument with Ballmer circa 1995 (he wasn't CEO yet) saying that within a decade he would be just as hidebound as IBM was at the time.  Of course, he denied it, but the thing that really pissed him off was that I told him there wasn't a damned thing he could do about it.  I was right, not because I was freaking brilliant, but because it is just so inevitable -- the more dominant your market position, the more a victim of success and the more set in your ways you become (think: Sears, McDonalds, etc).  And successful companies are inevitably blinded to their real competition emerging. 


We in Global Capitalism HQ used to go to Microsoft's investor day, but don't bother any longer.  The last few years, I have seen more people reading the paper or checking their e-mail when Ballmer addresses the investors than were actually listening to him.  The air of boredom is palpable.  Nobody goes to discover what will actually bust Microsoft out of the trading range it's been stuck in for a decade; they're only listening for that one stupid thing that Ballmer might say about doing another disastrous acquisition like the Yahoo! deal that would get them to sell the stock.  We don't devote a lot of resources to analyzing their strategy any more; I've got junior people following the news on them.  The only people that care about Microsoft are the traders, trying to make a short-term buck as it floats in the trading range it's been stuck in for years. 


I'd tweak your conclusion just slightly.  Microsoft has competition, and what's important about the competition is that it obeys different laws of physics.  The fact is that Microsoft is losing share in all its markets, and (except for business apps) the products taking share are all open source. Distributed collaboration removes a lot of the politics and allows better decisions faster.  That's exactly why the Anons were so deadly effective in their 2008 protests and beyond; they had no central command structure to make decisions about where to protest.  They coordinated over the internet and were able to put the epic days of protests together almost instantly; the cult, even if it knew they were coming, had no time to react. 


The combination of scale and speed enabled by the Internet (wielded by passionate, committed activists, of course) will continue to devastate the cult just as open source software has brought Microsoft to a vulnerable standstill and has put them permanently on the defensive.

media_lush 1 Like

 @JohnPCapitalist as a mac fanboy since The Classic days I would have to question your conclusion:


"just as open source software has brought Microsoft to a vulnerable standstill" - without getting bogged down into the technicalities I would have to say it was the giant called Apple (since the 2nd return of Jobs) which knocked MS for six and the subsequent introduction of iOS on the iPhone and later iPad - both which are, as is the standard OS, probably the epitome of closed-source software.


As outlined above the way things were done were arse backwards but I can't but help that the real damage started to happen after my favourite Ballmer quote:


"There's no chance that the iPhone is going to get any significant market share. No chance."


I've had dozens of Mac vs PC flame wars over the years - pretty much since the introduction of commentating software and I always used to end with the question along the lines of "so, tell me if you're so pro PC and someone gave you $1k would you choose to buy Microsoft or Apple stock right now (given they were the only 2 choices). I'd love coming back after a couple of months and show how the 2 stocks were doing.


 @C_Shell What about corporate environments where they make you use Microsoft Internet Explorer 6? Like my last job? (And the job before that too.) And they wouldn't let me install an up-to-date, reliable browser either. The idiots.

C_Shell 1 Like

 @JohnPCapitalist Thank you for this!


Because I operated in the corporate environment for the bulk of my career, I was a Microsoft user -- cursing and fuming all the way. As soon as I made my break for freedom (career-wise), and this was when MS Vista was coming out, I switched to Apple and told my husband we should buy AAPL (it was trading in the mid-$80s). He chose not to take my advice as it wasn't based on charts or graphs, but female intuition. I get to be smug now, but we still did not make the killing in AAPL that we WOULD HAVE MADE.


Anyway. Over the years I have seen and experienced first-hand the corporate bullying that others here have analogized to Scientology, even having a supervisor in my early days fling a Washington DC phone book at my head from close range, but I would never seriously equate those horrific (to me) experiences to what I've read here and elsewhere recently as the normal BAU in the Cult. Truly in a category of its own.

JohnPCapitalist 3 Like

We in Global Capitalism HQ are fanboys of only one thing: stocks that go the direction we're betting (long or short).  We have made scads of money on both AAPL and MSFT, mostly AAPL (until last night's bad quarter) recently.  Personally, I was an Apple Certified Developer in February 1984, a month after the box premiered. So I'm hardly a Microsoft fanboy or Apple hater.


Apple never really made a dent in Microsoft and the PC market; yesterday's numbers put them at a shade under 5% of global PC shipments for Q2.  And they're a non-factor in Internet services, corporate enterprise computing (Microsoft's big moneymaker at the moment) and in office suite software. 


Apple has beaten Microsoft solidly in phones, partly because of Apple's brilliance in consumer electronics, and partly because of Microsoft's ability to shoot itself in the foot.  Microsoft was into phones very early, but built its products on the premise that people wanted phones to look and act like really tiny PC's.  The market quickly rejected that idea, though there were not any really effective competing products that were not PC-like (Palm, BlackBerry).  (BTW, BlackBerry fans, their architecture is of a dedicated e-mail device rather than a general-purpose app platform, as their current inevitable descent into irrelevance and/or bankruptcy has proven).  Microsoft created the opportunity, but blew it through their own blindness, and Apple did a great job of exploiting the opportunity that Microsoft left wide open for them. 


However, I said at the time that the iPhone came out (January '07) that an open source competitor would equal or exceed Apple share in the device market within 3 years.  That was before Android was formed.  It turned out to be correct (but off by about 6 months, an error I can live with) because of the economics of open source; Android is bigger than iOS today, though Apple's individual models are bigger sellers than any individual Android model. 


Right now, I'd put money into Apple and not into Microsoft. Not because I'm a fanboy of either, but because Apple stock has more appreciation potential than Microsoft at the moment.  Note that this comment is not investment advice; usual disclaimers apply. 


 @JohnPCapitalist I attended some corporate meetings at General Motors, the old GM before the wipe-out-and-restart, and mostly remember how much time was spent listening to extraordinarily long and pointless stories from this guy whom apparently it was necessary to humor.  I don't remember anything ever getting decided or implemented.  It seems to happen to every large organization somehow or another.

media_lush 5 Like

@jhamby I remember posting in Gizmodo at the time that the 'Kin' was one of the most unfortunate choice of names ever. In the UK the word "kin" is often the mst drastic truncation of the word 'fucking' Fucking phone Often becomes 'effin phone Which can often become 'kin phone It's a less offensive version but is immediately understandable to the other person as the 'eff' is left out.

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