You may have run across a very confusing story about Scientology, Will and Jada Smith, and a “refund” that spun out across tabloid news websites yesterday.

Like lemmings, many sites simply repeated what started with a RadarOnline story claiming that tax records showed Will and Jada had received a $1.2 million refund from a “church-affiliated” school which shut down in 2013.

Well, we’re pretty sure that Radar’s story is just flat-out wrong, even though it was copied like gospel by dozens of other sites.

“Radar is so massively incorrect,” Jeffrey Augustine told us after we consulted with a reputable certified public accountant who examined the tax records for us. Like us, Augustine has a fascination with financial paperwork, especially when it involves Scientology, and he helped us dive into the records of the New Village Leadership Academy.

We know what you might be thinking. After the tabloid media has already gone off the deep end, isn’t trying to set the record straight pointless?

Well, we’re going to do it anyway because we’re masochists like that.


It was the Underground Bunker that actually broke the news, in 2013, that the New Village Leadership Academy was shutting down. We then published the only interview with the school’s first principal, Jacqueline Olivier, who told us she was working on a book about her experiences.

Between what Olivier told us, as well as one of the school’s directors, and through tax records, we pieced together what had happened. In 2007, the Smiths hired Olivier to help them turn what was a homeschooling operation into an actual bricks-and-mortar private school. For a year, Olivier helped the Smiths plan their operation, which opened in the fall of 2008. To get the school going and pay the first three years’ rent on a previously closed high school campus in Calabasas, the Smiths, through their “WJS Trust,” loaned the project $1.235 million.

That seed money would be combined with what the school could bring in through tuition and fundraising to, the Smiths hoped, make it self-sufficient after those initial three years. In the meantime, as Olivier explained, Will and Jada were adamant that L. Ron Hubbard’s “Study Technology” be used as the guiding principle at the school. When that resulted in protests when the school opened that fall, Olivier assured the public that NVLA was non-denominational and not a “Scientology school.”

But in our interview, she admitted she was playing down for reporters how much the Smiths wanted Hubbard’s ideas to be used in the school. And when Olivier chafed against that strict protocol, the Smiths fired her only a year after the school opened.

Olivier told us that the Scientology influence in the school was heavy: Teachers and parents were encouraged by the Smiths to take courses at a nearby Scientology org, and their children, Jaden and Willow, were doing actual Scientology courses on campus with special Scientology teachers. Olivier herself had to take courses at Scientology’s Hollywood Celebrity Centre. After she complained and was fired, a woman by the name of Piano Foster took over as principal, and remained its principal until the school closed on June 28, 2013.

By then, the Smiths had little involvement with the school, and their children were no longer attending classes there. After the initial three years that they had financed, the Smiths distanced themselves from the project, and the school struggled to raise enough money to keep going.

The school’s 2012 tax return showed that it was operating in the red, with expenses outpacing revenues by more than $20,000. By June 2013, it was clear the school couldn’t go on. The tax return for that year, 2013, describes how the school was shutting down and doing its best to leave no debts. It claimed credit, for example, for leaving the owner of the Calabasas school facility, the Las Virgenes Unified School District, with improvements at the campus and a new security system worth more than $700,000.

Since the school was opened in 2008, its tax records had carried the initial $1,235,000 loan from the Smiths’ WJS Trust as a liability, a “payable to current and former officers.” But Olivier tells us that it was clear, when she was getting the school going in 2008, that the Smiths never expected to see a dime of that money back.

“There’s no way,” she told us by telephone yesterday. “There was no expectation that the school would pay that back.”

And while the $1,235,000 liability is zeroed out in the 2013 tax return, there’s a nearly indecipherable note that goes with it: “The total of contribution was included $1,169,628 as forgiveness loan from The WJS Trust.”

RadarOnline interpreted that note to mean that New Village Leadership Academy, despite being broke and closing down, somehow came up with $1.2 million to pay the Smiths for the seed money that had gotten the school going some five years earlier.

We read it to mean the opposite — that the Smiths walked away with almost nothing from that contribution, which they now considered to be a “forgiveness loan.”

We called and emailed Jeff Gillman, the preparer of the tax document with Gelfand Rennert & Feldman, to ask him if he could clear up that confusing line from the form. His assistant confirmed that he’d read our email, but he didn’t get back to us.

With the help of Jeffrey Augustine, we asked a CPA to look over the documents with us. Jeff said the CPA spotted the problem with Radar’s analysis in about five minutes.

“The loan was not ‘refunded’,” the CPA told us. “$1,196,628 was forgiven as a contribution to the school so the school’s tax-exempt organization books could be zeroed-out and closed.”

Jeffrey added that the most the Smiths might have received toward their loan was about $65,000 that was left in cash at the end of the final school year.

Meanwhile, Radar not only claimed that the Smiths got a $1.2 million refund that never happened, but that the couple had obtained the money because they have left Scientology. And other sites copying the story have said that the “refund” came from Scientology itself! Wow.

Leaving aside the incorrect “refund” story, we have reported in the past that the Smiths distanced themselves from Scientology, and it resulted in a big story in the Daily Beast back in March.

We’ve pointed out numerous times that although Will Smith enforced “Study Tech” intensely at New Village Leadership Academy, a close lifelong friend assured us that he was just a “dabbler” who was fascinated by all religions but didn’t belong to any of them. Other sources told us that Jada was the one who was hooked on the e-meter and auditing. But recently, an excellent celebrity source assured us that the Smiths were out of Scientology altogether, which is what we told the Daily Beast.

Jacqueline Olivier begs to differ, however, and she says she has new information in her upcoming book that will change our mind about the Smiths and their involvement in the church.

We told her we’d like to dig into her book as soon as we get back to New York, and we look forward to seeing that new material. Hey, we have an open mind to new information — but we do check things out. It’s important!

Also, our thanks to Jeff Augustine for helping us check out a developing story from eight time zones away!

DOCUMENTS

2013 tax return for New Village Leadership Academy



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Chris Shelton takes down Scientology, part 2

If it’s Thursday, it must be Shelton…







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Bonus photos from our tipsters

The bromance between Grant Cardone and Bob Duggan continues…







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BOOK NOTES



We didn’t get a chance to include photos in our book, so we’ve posted them at a dedicated page. Reader Sookie put together a complete index and we’re hosting it here on the website. Copies of the paperback version of ‘The Unbreakable Miss Lovely’ are on sale at Amazon. The Kindle edition is also available, and shipping instantly.

Tony Ortega’s upcoming appearances (and check out the interactive map to our ongoing tour)…



August 24: Boston, Boston Skeptics in the Pub, 7 pm (with Gregg Housh)

Sept 15: Barrett the Honors College, Arizona State University, ASU in Downtown Phoenix campus

Sept 23: Cleveland, Parma Heights Library, 7pm sponsored by Center for Inquiry – Northeast Ohio

Sept 24: Minneapolis

Sept 27: Portland

Sept 28: Seattle, Razzi’s Pizzeria, 7 pm, with Seattle Skeptics and Seattle Atheists

Sept 29: Vancouver, BC, Seven Dining Lounge, 7 pm

Oct 23: Sydney, Giant Dwarf Theatre (with Sen. Nick Xenophon)

Oct 26: Melbourne

Oct 28: Adelaide (with Sen. Nick Xenophon)

Oct 30: Perth

Past dates: Santa Barbara (5/16), Hollywood (5/17), Orange County (5/17), San Diego (5/20), San Francisco (5/22), New York (6/11), Chicago (6/20), Toronto (6/22), Clearwater (6/28), Washington DC (7/12), Hartford (7/14), Denver (7/17), Dallas (7/20), Houston (7/22), San Antonio (7/24), Austin (7/25), Paris (7/29), London (8/4)



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Posted by Tony Ortega on August 6, 2015 at 07:00

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Learn about Scientology with our numerous series with experts…

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Jason Beghe | Tom DeVocht | Sara Goldberg | Paul Haggis | Mark “Marty” Rathbun | Mike Rinder | Spanky Taylor | Hana Whitfield