Nightmare on the Net

Wollersheim has a different story. "They got me in an office, and Kelley said, 'I want you to guarantee you're going to pay every single bill we incur,'" he recalls. "I said I had obligations to the organization and would have to review every bill; I would not give him carte blanche. Four days later, all of a sudden this conflict of interest comes up and they have to resign from the case. They knew about this alleged conflict from month three."

The conflict, alleged or actual, almost certainly has to do with the role of FACTNet co-founder Bob Penny in the litigation. From the outset, Penny and Wollersheim have offered contradictory explanations about how certain Scientology materials ended up on FACTNet's hard drives. Wollersheim has suggested that Scientology "agents" might have uploaded the documents in an effort to plant evidence (a notion that RTC attorney Todd Blakely has branded "absurd" in light of the church's campaign to protect its copyrights) or that Penny, whose memory has been affected by his battle with multiple sclerosis, may have loaded them by mistake. Penny has said he doesn't know how the documents got there.

"There are hundreds of pages of claimed infringements that Bob Penny swears he didn't put on the database, and he's the only one who did the database," Wollersheim says. "All I have is the memory of a guy with MS. I either have to think Bob is telling the truth or he can't remember."

Around the same time that Faegre & Benson withdrew its representation, Lerma and Wollersheim informed Penny that he was being removed from FACTNet's board of directors. He wasn't the first such casualty; one director in England had been driven into bankruptcy by church-related litigation, and another in South Africa had been persuaded by Scientology officials to sign a "confession" of misdeeds and bow out of the conflict. But Penny's removal from the board didn't remove his liability in the lawsuit.

Six months ago, noting that the stress of the litigation appeared to be taking its toll on Penny's condition, Judge Kane directed both sides to find a way to excuse him from the case. "It's indecent of people to keep you involved," he told Penny. But at this writing, the attorneys are still wrangling over stipulations that would take Penny out of the crossfire; RTC's attorneys say they don't want Wollersheim to be able to shift blame to an "empty chair," but Wollersheim contends that the church is trying to foment dissension between him and Penny's supporters for their own gain.

"Bob is my friend," Wollersheim says. "He should have been out of this case right away. His memory was functionally gone for testifying quite a while ago; I read one of his depositions, and I was ashamed of myself, that I didn't demand that Bob be released. It took the judge to demand it. But Bob wanted to be involved. What I'm trying to do is protect Bob Penny and his heirs so that when this is all over and Scientology and their attorneys have to pay millions for the bullshit they've done, Bob and his kids will benefit."

Contacted at his home, Penny says he's "pretty much unconscious" and hands the phone to a friend, who confirms that Penny wants out of the case and has nothing to do with FACTNet's current activities. The friend also vouches for the accuracy of an article that appeared in the online newsletter Biased Journalism, which stated that Penny disagreed with Lerma and Wollersheim about legal strategy and supported Faegre & Benson's handling of the case.

"Scientology's intelligence operatives try to make a great deal out of situations that don't exist," Wollersheim says. "They know they can't go into court with us, so they're trying to create dissension so people won't donate to us. A lot of this stuff that's come out, it's either completely false or it's a small situation made to look like a big one. Working in a nonprofit under constant security threat, the board of directors are going to get into regular conflicts. But we've always worked them out."

Lerma points out that FACTNet has assembled a diverse group of advisory boardmembers--including entertainer Steve Allen and noted psychologist and cult critic Margaret Singer--and he says the organization is actively recruiting new directors.

"You know anyone who wants to be on the board?" he asks.

FACTNet's new "dream team" of lawyers is headed by Graham Berry, a New Zealand-born, Los Angeles-based attorney who has worked with Wollersheim on other litigation against the Church of Scientology. Church attorneys fought his appearance as defense counsel in the case, contending that Berry, one of the attorneys who'd defended Steve Fishman, was the culprit who had placed Hubbard's secret writings in an open court file and thus was a "necessary witness" in the FACTNet suit. Berry denied this, and Judge Kane ruled he could represent FACTNet.