But today, the influence of Scientology at Allstate is no joking matter. Between 1988 and 1992, it turns out, the Good Hands company entrusted the training of workers coast to coast to a consultant teaching Scientology management principles.
Joe Harrington <email@example.com> wrote:
>Allstate had a real nightmare when they used a Scientology-based
>"consultant" organization. Perhaps someone can repost that story
>if they still have it. Please keep this newsgroup posted.
Here it is. Reprinted with permission.
DOW JONES NEWS 03-22-95
Allstate applied Scientology methods to train its management
by Rochelle Sharpe
Staff Reporter of The Wall Street Journal
Copyright 1995 Dow Jones & Co., Inc. All rights reserved.
Two years ago, an Allstate agent stood up at Sears's annual
meeting to ask what then seemed a bizarre question.
"To what extent," he inquired, "are the teachings of L. Ron
Hubbard's Church of Scientology present today in Allstate and in
Edward Brennan, chairman of Sears, Roebuck & Co., and Wayne
Hedien, then-chairman of Sears's Allstate Insurance Co. unit, both
appeared bewildered. Mr. Brennan said he had no knowledge of any
relationship at all. Mr. Hedien said he didn't even know any
Scientologists. "I'm a Roman Catholic myself," Mr. Brennan added.
Shareholders laughed, and the board moved on to apparently more
But today, the influence of Scientology at Allstate is no joking
matter. Between 1988 and 1992, it turns out, the Good Hands
company entrusted the training of workers coast to coast to a
consultant teaching Scientology management principles.
The consultant says more than 3,500 Allstate supervisors and
agents participated in the nearly 200 seminars conducted by his
firm, which was licensed by a Scientology institute to teach such
classes. The course materials -- which preached a rigorous, even
ruthless devotion to raising productivity -- were developed by Mr.
Hubbard, founder of the religion that some critics claim is a
One of the purposes of teaching Mr. Hubbard's management
program, a Scientology pamphlet states, is to instill "the ethics,
principles, codes and doctrines of the Scientology religion
throughout the business world."
Though the company recently banned and repudiated the courses,
their reverberations are still being felt -- and may even be
growing. Some employees continue to use Mr. Hubbard's techniques,
while other workers weave conspiracy theories about an alleged
Scientology plot to infiltrate the highest levels of the company.
Some agents believe they have been harassed and, despite repeated
denials, the insurance giant has been unable to put all the
speculation to rest. Recently, agents in Florida have launched a
drive to unionize the work force -- and they are using the
Scientology issue as a centerpiece of their attack on management.
Allstate employees who took the classes say an important,
although hardly exclusive, theme of the training was an
uncompromising commitment to the bottom line -- even if that meant
treating poor performers harshly. The course materials warned
managers never to be sympathetic to someone whose productivity
numbers, or "statistics," were down.
"We reward production and up statistics and penalize
nonproduction and down statistics. Always," the training booklet
said. "Don't get reasonable about down statistics. They are down
because they are down. If someone was on the post, they would be
up." The course underscored this point by advising that
"reasonableness is the great enemy in running an organization."
The program also taught psychological concepts such as the "tone
scale," which catalogs emotions and, Scientologists believe, can
be used to influence behavior. Illustrated with cartoon
characters, the scale contains 41 levels, ranging from death,
apathy and grief near the bottom to exhilaration, action and
"serenity of beingness" at the top. All of the levels are
numbered: Covert hostility is 1.1, boredom, 2.5.
Allstate managers learned to find a person's place on the scale
by analyzing the individual's favorite style of conversation. "If
you wish to lift the person's tone, you should talk at about half
a point above their general tone level," the course book advised.
A well-financed organization
While such ideas appealed to some employees, others were amused
or offended. David Richardson, who took the course in 1990,
remembers exchanging startled glances with a colleague and
muttering: "If they turn off all the lights and start singing John
Denver music, I'm walking out."
Allstate initially responded to questions from this newspaper
with a brief written statement: "There is absolutely no connection
between the Allstate Insurance Company and the Church of
Scientology." If any Scientology materials were included in
training sessions, it was "a blip on the screen . . . a very
inconsequential, one-shot situation," a spokesman said.
But later, Jeff Kaufman, a regional vice president who
participated in Allstate's decision to use the Scientology
consultant, acknowledged that the controversial courses were
taught to agents and managers nationwide. Mr. Kaufman described
the employment of the consultant as "an accident."
"I feel like our intentions were very honorable," Mr. Kaufman
says. But now, he adds, the matter "is biting at me personally."
He emphasizes that he didn't know at the time of the training that
Scientology principles were involved.
Many Allstate employees, though, did know the connection. For
one thing, the introduction to their course book declared the
materials "were researched and written entirely by" Mr. Hubbard,
who died in 1986. Some trainees recognized the name instantly;
others learned who he was from colleagues taking the course.
Mr. Hubbard is best known not as a management guru but as the
science-fiction writer who founded the Church of Scientology
International in 1954. Since its earliest days, the church has
been a target of anticult activists who say it exploits its
members and harasses opponents. Church members counter that their
organization has been systematically misrepresented, even
persecuted, by the media and government. Scientology, they say, is
"an applied religious philosophy" that helps people develop
spiritual awareness. Members seek perfection by exorcising bad
memories, or "engrams," from past lives through a counseling
process called "auditing."
Over the years, Scientology has been aggressive in its efforts
to attract new members -- including such celebrity adherents as
Lisa Marie Presley, Tom Cruise and John Travolta -- and to build
an efficient, well-financed organization. Along the way, members
credit Mr. Hubbard with developing a comprehensive management
system for church operations using Scientology principles.
The system came to Allstate through a circuitous route that
began in 1979, when church members formed a not-for-profit
religious group, the World Institute of Scientology Enterprises,
to market Mr. Hubbard's techniques to business. In its book, "What
Is Scientology?" the organization boasts that its courses have
been taught at a number of the nation's largest companies,
including General Motors Corp., Mobil Corp., Volkswagen AG -- and
Allstate. Except for Allstate, all these companies say they can't
find any evidence that their workers took such seminars.
Many Allstate employees would come to rue the Scientology
connection and to blame it on the company's top executives. Yet,
ironically, it was a group of agents, rather than anyone in top
management, who sought out Scientology management training in the
first place. The impetus was a companywide restructuring of
agents' jobs in the mid-1980s. Under the new system, agents had
more responsibility to run their own businesses, hire staff,
manage expenses and attract new clients.
The Hubbard management system
The change put enormous new pressure on employees, many of whom
had previously sold insurance in Sears stores and had no
entrepreneurial experience. (Sears, which once owned all of
Allstate, sold a 20% stake to the public in 1993 and plans to spin
off the rest of the company later this month.) The pressure
prompted a group of about 10 agents from the Sacramento area to
band together in late 1987 to search for ways to sharpen their
One member suggested at a monthly meeting in early 1988 that the
group consider hiring outside consultants to help in the effort.
Karen O'Hara, a relatively new agent based in the tiny town of
Galt, Calif., replied that she had a client who was a management
trainer, three people at the meeting recall. But they say Ms.
O'Hara didn't point out that she knew the trainer, Donald Pearson,
through a Scientology communications class she had taken. Ms.
O'Hara confirms she took such a class but won't comment further.
Soon Mr. Pearson, then 39 years old, was meeting with the group
to present his ideas. Before long, he was lecturing on
organizational development to more than 40 Allstate employees
gathered at the Sheraton Hotel in Sacramento. Agents say Mr.
Pearson didn't hide his religion or the origin of the training
program but stressed that the sessions had nothing to do with
"It was a management program, not a religious promotional
program. . . . They didn't buy Scientology, they bought courses,"
Mr. Pearson says now. "What's my religion got to do with whether
I'm a good consultant?" A Scientology spokeswoman adds that the
same principles that are religious within the church can be viewed
as secular when applied outside the church.
Mr. Pearson, though, was a top trainer for a firm called
International Executive Technology Inc., which was devoted to
teaching the Hubbard management system. Materials Mr. Pearson
distributed in his classes included Mr. Hubbard's copyright notice
at the bottom of many pages. And all of Mr. Hubbard's written
words, including his management pronouncements, are considered
religious scripture by the church, according to the Scientology
pamphlet, "The Corporations of Scientology."
One Scientology brochure predicts that as businesspeople use the
L. Ron Hubbard technology and "win with it, they will reach for
and apply LRH technology in other aspects of their lives and may
Mr. Pearson steered clear of these issues in his Sheraton talk,
agents say, and hewed to the subject of how insurance agents and
managers could do a better job of running their businesses. By all
accounts, he was a huge success; agents later described the tall,
sandy-haired speaker as confident, direct, down to earth and
authentic. The employees who heard him were so impressed that they
invited him to deliver the keynote address that fall at a meeting
of Northern California managers, held at a posh Lake Tahoe resort.
After that presentation, requests poured in from managers for
further assistance from Mr. Pearson.
One high-ranking Northern California manager says he persuaded
executives at Allstate headquarters in Northbrook, Ill., to pay
for intensive seminars for his employees. For more than two months
in late 1988 and 1989, about 50 managers and agents in the region
spent two to three days each week in classes at Mr. Pearson's
Sacramento office, which was decorated with Mr. Hubbard's vivid
paintings of spaceships and moonscapes.
Tips on office organization
The seminars gave loads of tips on office organization and goal-
setting. Filled with Mr. Hubbard's special terms, the materials
discussed ways not to waste "attention units"; what "hats," or
duties, workers had; and how to construct an "org board," a chart
of the organization's functions. The classes also showed how
employees could be divided into three categories: "the willing,"
"the defiant negative" and "the wholly shiftless."
To help managers understand their own personalities, consultants
administered a 200-item questionnaire similar to the ones
Scientologists pass out on street corners. The Allstate employees
got back graphs that rated them on 10 counts, including stability,
certainty and composure. They also practiced staring at colleagues
and examining their facial features in an effort to like the co-
But the seminars focused mostly on management by statistics, a
concept that involved charting income and production on weekly
graphs. Employees who produced so-called up statistics weren't to
be questioned, no matter how they behaved. "Never even discipline
someone with an up statistic. Never accept an ethics report on one
-- just stamp it `Sorry, Up Statistic' and send it back," Mr.
Pearson's materials advised.
Workers with declining production had to be investigated
immediately, the course taught. "A person with low statistics not
only has no ethics protection but tends to be hounded," the
training manual said. It also quoted Mr. Hubbard's writings
blaming the Depression, the failure of communism and even the
decline of ancient Greece on people's willingness to reward or
excuse so-called down statistics. The Allstate classes included
Mr. Hubbard's statement that about 10% of the population was
"nuts" and that "2 1/2% are the chief nuts."
Rather than resist the course, many who took it appeared
grateful for the lessons and eager to apply them. "It was
invaluable," says Edmund Kramer, who took the classes when he was
a marketing sales manager in California. "I know some people are
afraid of it because they think it has religious connotations. But
once you touch it, you're going to carry something with you from
it forever. It's very powerful in its simplicity."
The first wave of managers to try the course, all from
California, appear to have focused primarily on how to chart their
business fortunes -- and to react quickly to any downward trend.
It is unclear whether any of the California managers followed Mr.
Hubbard's harsh rhetoric on poor performers. In any event, by the
end of the year, sales and profits were up significantly, managers
So many managers outside the region clamored for information
about the training program that Mr. Pearson and Allstate manager
Lindal Graf were invited to promote it in Southern California,
Tennessee and Kentucky. Mr. Pearson also spoke to 130 Allstate
managers from all over California who had gathered in the city of
Ontario for a conference. Six weeks later, in November 1988, he
had his debut at Allstate's corporate office, leading a seminar
for 30 sales managers from throughout the country.
Within months, corporate executives who had heard the favorable
reviews were seeking Mr. Pearson's participation in a series of
three-day sessions for managers nationwide.
Before they offered him that pivotal assignment, though, they
asked him to conduct a tryout session at corporate headquarters
for visiting managers. That is when executives first heard
complaints about Scientology, says Kenneth Rendeiro, a former
sales manager who was in charge of setting up the training
programs. Two California managers, scheduled to participate in the
sessions, refused to take part because, they explained, Mr.
Pearson was affiliated with Scientology.
Corporate executives then convened a series of meetings to discuss
whether it was a mistake to hire a Scientologist, and Mr. Pearson
reassured officials that his training program was separate and
distinct from the religion. As a result, William Henderson, then
vice president of sales, decided to give Mr. Pearson the job, Mr.
Rendeiro says. However, Mr. Henderson, now retired, denies any
involvement. He says the company is trying to blame it "on the old
guy who retired."
There's no dispute, however, that Mr. Pearson ended up traveling
around the country with two other trainers unaffiliated with
Scientology, giving seminars to managers in about half the
company's 28 regions. Mr. Pearson says these seminars, for which
Allstate paid him $4,500 per three-day session, were given from
1989 to 1992. The classes became so popular that many regional
managers invited Mr. Pearson back, at $5,000 a day, to do special
sessions geared toward agents.
Allstate's Mr. Kaufman says he had specifically forbidden
trainers from selling any books at the advanced-management
seminars. But once Mr. Pearson began teaching large numbers of
agents, questions arose about whether he was abiding by the rules.
"He snuck in about a half-hour on the promotional literature,"
says John Softye, a New York agent who took Mr. Pearson's Agent
Prosperity Seminar in 1989. "He said: `You buy these books and you
can see how to benefit yourself and improve your thinking.'" The
seminar materials also advertised a series of books available from
Mr. Pearson and his company: Mr. Hubbard's "Science of Survival"
for $50, his "How to Live Though an Executive" for $31.25, and a
three-pack of his "Money and Success" tapes for $145.
By this time, several other consultants who worked with Mr.
Pearson were also training Allstate agents in Scientology
management practices. At least one of the consultants pitched
another book to agents: "Dianetics," Mr. Hubbard's seminal book on
Scientology. Mr. Pearson says he told the consultant to stop the
practice, since Allstate had banned the sale of religious
materials at the seminars. Mr. Softye claims, though, that Mr.
Pearson also sold copies of "Dianetics" at his seminar, an
allegation that Mr. Pearson denies.
In this phase of the training program, reports from the field
began to grow less favorable. In Arizona, for example, workers say
they noticed a disturbing change in a key supervisor's management
style after their Hubbard training in July 1990.
After taking the classes, territorial-sales manager Jeffrey
Swanty talked constantly about management by statistics, says
David Richardson, the former Allstate manager who attended the
course with him. To apply the ideas, Mr. Richardson says, Mr.
Swanty developed a system under which the worst-performing agent
and the worst-performing manager in his territory would be
required to reach a series of daily, weekly and monthly goals.
Frequently, Mr. Richardson says, the goals were unreachable,
requiring that business be doubled or tripled within a short
"It allowed management by intimidation. It was vindictive -- a
way to try to remove people," Mr. Richardson says. "We would
harass agents" by calling them constantly and visiting them
repeatedly. (Mr. Richardson had his own run-ins with Mr. Swanty
and was reprimanded at least once.)
One incident that employees still talk about involved William
Wesler, a 35-year-old Phoenix manager, who was suffering from
lymphatic cancer in 1990. Everyone in the office knew about Mr.
Wesler's condition and his efforts to reduce stress as part of his
treatment, Mr. Richardson says. Nonetheless, a month after taking
the Hubbard training course in July, Mr. Swanty placed Mr. Wesler
on a rigorous program to improve his performance.
The Hubbard course materials
During the following 120 days, Mr. Wesler was supposed to double
his district's sales, hire at least one female and one minority
agent, attend public-speaking classes and enroll in a college
course on interpersonal skills, his August 1990 job evaluation
states. He also had to meet with Mr. Swanty every other week to
receive an evaluation of his progress.
"It was a workload for three people," says Mr. Wesler's widow,
Sherry Scott. She says her husband completed most of the work but
quit in October 1990. He died in May 1992. "When I saw Jeff Swanty
at the funeral, I turned and walked away," says Greg Peterson, who
had worked for Mr. Wesler and says he watched Mr. Swanty's
behavior change after the management classes. "I feel his actions
worsened Bill Wesler's health," he adds.
Mr. Swanty acknowledges that he was impressed with the Hubbard
course materials but says he didn't implement much of the program
because he feared it would create too much paperwork. He says he
didn't know at the time that Mr. Hubbard was connected to
Scientology. He knew Mr. Wesler was ill, Mr. Swanty adds, but
denies he treated him unfairly in light of his declining
"We treat people with dignity," says Edward Moran, an in-house
Allstate lawyer who also denies that Mr. Swanty was unfair. He
says Mr. Wesler was having serious problems with managing and
communicating with agents for some time before he received his
negative evaluation in August 1990. In addition, Mr. Moran says,
Mr. Swanty began drafting the evaluation in June, before he took
the Hubbard lessons. However, the performance review is dated Aug.
Across the country, a number of agents were making complaints
similar to those voiced in Arizona. Lawsuits and Equal Employment
Opportunity Commission complaints were proliferating; more than
two dozen have alleged fraud, harassment or discrimination by
Allstate, often in connection with wrongful-discharge cases. One
manager joked about forcing so many to quit that they would have
to bring in "body bags" to cart them away, while others described
agents with low productivity as below the "scum line," workers
said in pretrial statements related to these lawsuits.
The company says the number of suits isn't unusual for a firm
its size. The allegations reflect the failure of some agents to
prosper under the more entrepreneurial system Allstate set up in
the mid-1980s, it adds. The agents are falsely blaming Scientology
and company officials for their own shortcomings, Allstate says.
"Bless their hearts, they wish it were still 1965," says Michael
Simpson, Allstate's recently retired vice president of sales.
The company would never condone harassment, Mr. Simpson says,
though he adds the firm couldn't be aware of the actions of every
single worker. "Allstate has always been extremely ethical and
right-treating of its employees," he says.
Yet given the philosophy espoused in the Hubbard training
program, many agents became convinced, rightly or wrongly, that
the hardball tactics they saw many managers adopting were inspired
by the Scientologists' training methods. Many knew that the church
has been accused repeatedly of spying on and harassing its
Under its "Fair Game Law," written by Mr. Hubbard in 1967, an
enemy of Scientology is "fair game" and can "be deprived of
property or injured by any means by any Scientologist, without any
discipline of the Scientologist. May be tricked, sued or lied to
or destroyed." The church says Mr. Hubbard rescinded this law in
1968, although critics contend that only the term, not the
concept, was discontinued.
Many agents were concerned
By 1990, many agents were concerned enough to confront their
supervisors about the use of the Hubbard materials. In some
instances, employees protested the implementation of management-by-
statistics programs in Allstate offices. In South Florida, a
Catholic agent balked at participating in a program linked to
another religion. His opposition caused such a furor that the
Hubbard-inspired program was curtailed, agents say.
In 1992, without acknowledging any past problems, the company
scaled back its reliance on Mr. Hubbard's teachings. By 1993, Mr.
Pearson had stopped giving any seminars at the company. But fear
of Scientology persisted at Allstate, and the brief Scientology
discussion at Sears's 1993 annual meeting did little to ease
agents' concerns about the Scientology link.
One reason was that agents were still finding elements of Mr.
Pearson's training program in Allstate management seminars. That
fall, for example, some agents participating in a new training
program, the Agency Development Process, noticed two pages, titled
"Statistics Graphs, How to Figure the Scale," that were identical
to those found in the Scientology material. The references to L.
Ron Hubbard had been deleted.
Allstate's new companywide Better Prospecting Seminar also had
some similarities to Mr. Hubbard's program, focusing on
statistical analyses of performance and describing employees'
various tasks using the Scientology term "hats." The new program
offended some agents, who say they felt they were being taught to
deceive and confuse their customers.
In May 1994, New York agent Mr. Softye, who describes himself as
a devout Catholic, refused to take a test that preceded
participation in the Agency Development Process, which he believed
was related to Scientology training. He initially received a "job-
in-jeopardy" reprimand, though it was rescinded when he complained
to corporate headquarters that the test conflicted with his
religious values. The incident fueled agents' drive to uncover
their company's apparent links to Scientology.
The National Neighborhood Office Agents Club, NNOAC, a group of
Allstate agents who are critical of management, began printing
special reports outlining what it knew about the Scientology
connection. In addition, the group sent Hubbard training materials
that had been used at Allstate to each member of the board of
directors. Someone also mailed an anonymous letter to the
company's investment bankers at Lehman Brothers Inc. claiming a
Scientology connection. These actions finally grabbed the
attention of top management.
Allstate senior vice president Robert Gary flew three NNOAC
agents to Atlanta last August and met with them in a tiny Delta
Air Lines conference room at the airport. Mr. Gary says he
acknowledged the company's involvement with the Hubbard management
training. He told the agents the seminars were "initially embarked
on in innocence," but he agreed they were a mistake. The senior
vice president promised the company would write to employees
admitting the error and would order that all the Scientology
material be deleted from Allstate's training books.
Complete review of the process
Later that month, Allstate President Jerry Choate wrote the three
agents a letter disavowing the Hubbard management materials. "The
inclusion of these materials was unfortunate because the ideas and
views expressed in them were clearly inconsistent with Allstate's
values," Mr. Choate wrote. "The people who were responsible for
screening the consultant's training materials failed to recognize
that they were inappropriate and remove them."
He promised a complete review of the process that led to the
hiring of Mr. Pearson. He also said the Hubbard materials hadn't
been distributed for several years and that, in March 1994, he had
ordered instructors to stop using any of the old texts, even if
they weren't objectionable.
But last October, an incident in Florida showed that speculation
among Allstate agents about the influence of Scientology on the
company is far from dead. On Halloween, 16 agents from Orlando
were called into a brief meeting, where territorial-sales manager
Daryl Starke reprimanded agents for failing to sell enough life
insurance. "This is serious business, folks; wake up!" one agent
quoted Mr. Starke as saying. He told workers that unless they
produced six life-insurance policies within 90 days, their jobs
would be in jeopardy, three employees at the meeting say.
Within a few weeks, many of these workers happened to hear about
the Scientology issue for the first time. They suspected that Mr.
Starke had taken the Hubbard course, as Allstate now says he had.
One agent was so disturbed that he talked to his priest about the
matter. In recent months, he and another agent filed religious-
discrimination claims with the EEOC. Allstate denies the charges.
The cases are pending.