An editorial response from slatkinfraud.com

While ordinarily, we here at slatkinfraud.com do not comment on ongoing media coverage of the case, in this case, we feel the need to make an exception. In this story, there are puzzling inconsistencies in the printed reactions from some of the investors - and Scientologists - who have lost money in what could turn out be one of the largest Ponzi schemes in American history. Due to certain indications that the Church of Scientology may be attempting to 'stage manage' the affair behind the scenes for its own, somewhat inscrutable agenda, we feel that it would be beneficial to give readers some context to these remarks. A recent Santa Barbara News Press article recently explored the influence that Reed Slatkin's deep faith in Scientology and support for his church may have played in the financial wheeling and dealing that led to his stunning reversal of fortune. According to the article, which quotes extensively on Reed's spontaneous dissertation on his religious awakening before the Securities and Exchanges Commission in January, 2000, it was his desire to help fellow Scientologists that led to his increasingly intricate "investment club," rather than any avaricious purpose. For reaction from these fellow Scientologists, the reporter contacted several investors to determine if they bear any ill will towards their co-parishioner for his apparent betrayal of trust - and found just the opposite, from those investors who were willing to comment. Ms. Gillian Christie, a longtime Scientologist and the proprietor of a Santa Barbara-area public relations firm, suggests that she doesn't blame Reed for the current situation, and notes: "Nobody really knows, because he's not allowed to talk. But I have this policy of saying that if you point a finger at someone, what you get is a sore finger. Reed is not responsible for me. I am responsible for me." While this may be an admirable policy for dealing with life's unplanned ups and downs, it neglects to recognize one important difference: in this case, Reed was responsible for tens of millions of dollars that were entrusted to him by his friends and colleagues, many of them fellow Scientologists. In his own testimony before the SEC, Reed states that he, personally, made the decision to move the bulk of his friends' money overseas, to NAA Financial, without bothering to consult these investors, or even inform them of the move. However, earlier this year, investigations by sceptical investors uncovered the disturbing fact that no company using this name exists in either Switzerland, or Monaco, and there are no records of the existence of its purported principal, Michel Axiall, who Reed claimed to have met on several occasions while visiting the bank to conduct 'business'. This is not simply a case of an investment manager losing money through unwise or unfortunate stock transactions. This is money that was 'lost' after being put non-existent "bank accounts" at a financial institution that does not seem to exist - which makes Ms. Christie's comments that more difficult to comprehend. Ms. Christie goes on to state: "The work (Mr. Slatkin) did over the last year allowed me to give money to many local charities, including the zoo and Civic Light Opera" … "I know of others who did the same, and I know that (Mr. Slatkin) donated immense amounts. I would like to emphasize how much good came out of it. We don't consider ourselves victims." Ms. Christie is free, of course, to consider herself as anything that she wishes; however, many of Reed's investors, Scientologist and otherwise, have lost more than just 'mad money' that may have been used to fund a favorite charity. There are real victims here, such as Alice Wintz, paralysed in a car accident, who lost $1.5 million - her entire insurance settlement and her children's college fund -- after entrusting her money to Reed. There are hundreds of investors, Scientologist and otherwise, for whom this loss represents more than simply a few less cheques to deserving charities. For Ms. Christie to 'emphasize how much good' came out of the hundreds of millions of dollars that has apparently vanished into a Ponzi-shaped black hole somewhere in Switzerland - or possibly Monaco -- is insensitive at best. Another Scientologist investor quoted in the article is Keith Code, who runs a motorcycle clinic in Glendale, California, and invested at least $100 K with Reed during the heyday of the investment "club." Referring to other Scientologist investors who lost money, he observes: "A lot of people I know are not crushed by it." His wife, Judy, adds: "People in general tend to be pretty wacky on the subject of money, and people in Scientology seem not to be compelled to make a big drama out of it." What Mr. and Mrs. Code don't seem willing to acknowledge is that many investors, Scientologist and non-Scientologist alike, simply want to know what happened to turn what seemed like an investment dream into a financial loss of nightmarish proportions. There is nothing "wacky" about expecting a friend - and a fellow church member - to act responsibly when taking charge of other people's hard-earned money; in fact, Reed himself insisted throughout his testimony before the SEC that he took his responsibility to these people even more seriously than might a registered investment advisor because of his devotion to the church to which they all belonged. More disturbing is the implicit suggestion that somehow, 'good' Scientologists won't "make a big drama" over this apparent betrayal by a friend. This is not the first indication we have seen that the church is attempting to control the way its members respond to revelations about what became of their money; however, it appears that after failing to corral the hundreds of Scientologist victims under one legal representative, the CoS could be resorting to 'peer pressure' to silence concerns over Reed's behaviour from its own flock. Finally, there is this remark from Lee Holzinger, the head of Santa Barbara's local Church of Scientology: "Ethics play a significant role in Scientology. The thing is that Reed has not been a parishioner of our church, so questions about his involvement are not applicable here." To that, we at slatkinfraud.com would point out that Reed cannot have it both ways. During his appearance before the SEC - for the most part, our only direct source of information on his mindset and motivations during his fourteen years in the investment business, since he has made no public statements since the story of his bankruptcy broke in May - he repeatedly stressed the link between his devotion to Scientology, his desire to help fellow Scientologists and his decision to go into the money management business to better assist his 'friends' He also noted that in lieu of accepting fees for the service that he performed, he chose instead to encourage these same 'friends' use their new wealth to donate to various Scientology funds and programs. Like it or not, the Church of Scientology is very much a player in the larger context in which Reed's "club" found its home, and this denial is specious at best and disingenuous at worst. We would like to note that this is not a criticism of the article per se, which does an admirable job of demonstrating the importance of Reed's religious convictions in understanding the extent of his actions. However, we felt that it was important to set the record straight. (We'd say "So sue us," but certain parties in the Office of Special Affairs might take that as an invitation, so instead, we shall leave it at that.)