Intelligence activities on behalf of Scientology were first carried out by the Hubbard Communications Office, the Scientology agency responsible for co-ordinating executive policy. It ran a small but ambitious intelligence system to monitor friends and enemies alike, and to harass perceived opponents. Its methods were outlined in the 10-page Manual Of Justice (marked "Confidential - for HCO personnel only" and still in use), written by Hubbard in 1959. The copyright on this publication expired in the 1980s, so it can freely be downloaded and reproduced.
In 1960-61, the HCO's intelligence section was supplemented by three new innovations: Special Zone Departments, to implement Hubbard's "Special Zone Plan" of infiltration, the Department of Government Affairs, into which the Special Zone Departments were merged after only two months, and which was in turn superceded in March 1961 by the Department of Official Affairs. The purpose of this rapidly-evolving Department was made absolutely plain: "we have here in actuality the equivalent of a Ministry of Propaganda and Security", as Hubbard put it in an HCO Policy Letter of 13 March 1961. Its goal was
to bring the government and hostile philosophies or societies into a state of complete compliance with the goals of Scientology. This is done by high level ability to control and in its absence by low level ability to overwhelm. Introvert such agencies. Control such agencies. Scientology is the only game on Earth where everybody wins. There is no overt [sin] in bringing good order.
But the need for something better became all too visible when, in 1965-66, L. Ron Hubbard was faced by threats from within (defectors setting up their own brands of Scientology) and from without (antagonistic governments and press). The publication in October 1965 of the report by the Australian state of Victoria's official board of inquiry into Scientology was a disaster for Scientology, but one which could hopefully be contained. It was not. On 7 February 1966, Lord Balniel asked the British Minister of Health, "whether he will initiate an inquiry into the scope and practice in this country of so-called Scientology, and the practice of psychology for fee or reward by persons who have no medical or psychological qualifications ... in view of the scathing criticism by an official board of inquiry in Australia into the so-called practice of Scientology, surely the right hon. Gentleman considers that it is in the public interest to hold a similar type of inquiry in this country?"
Hubbard was outraged and clearly very worried that the fire started in Melbourne would spread further (as it did, to Canada, New Zealand and South Africa as well as to Britain and two other Australian states). Ten days after Lord Balneil asked his question, Hubbard established a Public Investigation Section - that is, a section to investigate the public, not to publicly conduct investigations. Its stated purpose was "TO HELP LRH [Hubbard] INVESTIGATE PUBLIC MATTERS AND INDIVIDUALS WHICH SEEM TO IMPEDE HUMAN LIBERTY SO THAT SUCH MATTERS MAY BE EXPOSED AND TO FURNISH INTELLIGENCE REQUIRED IN GUIDING THE PROGRESS OF SCIENTOLOGY" [emphasis in original]. Hubbard outlined how this was to be achieved:
The determination of what a project is is simple - what agency or group is attacking Scientology? As Scientology stands for freedom, those who don't want freedom tend to attack it. The Section investigates the attacking group's individual members and sees that the results of the investigation get adequate legal action and publicity.But the Public Investigation Section met almost immediately with disaster: although one of its tasks was to catalogue "derogatory news stories appearing that week", it soon found itself the subject of press condemnation. Vic Filson, a non-Scientologist private investigator, was recruited to establish an investigation section to target psychiatrists and other enemies, starting with Lord Balniel. He lasted only a week and promptly sold his story to the low-brow tabloid The People.
After this false start, there was really only one thing for Hubbard to do: create his own private intelligence agency, staffed solely by Scientologists and organisationally separate from the Hubbard Communications Office. This he did on 1 March 1966, bestowing on his third wife Mary Sue the grandiose title of "The Guardian".