Employee Accuses Real Estate Firm Of Turning on Scientology E-Meter

Several months after she went to work at a Manhattan real estate firm, Karen Schwartz says her boss, developer Lawrence

Several months after she went to work at a Manhattan real estate firm, Karen Schwartz says her boss, developer Lawrence Feldman, ordered her to take an unusual series of night classes. Ms. Schwartz says he informed her they were simply “business courses.” But when she arrived at the classroom, Ms. Schwartz couldn’t have been more astonished.

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According to a complaint Ms. Schwartz has filed with the Federal Equal Employment Opportunity Commission, she was subjected to something close to an indoctrination into the Church of Scientology. She says she was hooked up to an “E-meter,” a device that used electrodes to measure her thoughts. From another room, she could hear people clucking like chickens in what she later learned was an exercise called “bull-baiting.”

Ms. Schwartz, who describes herself as a practicing Catholic, was upset-to say the least. In her complaint, she said that “the substantive content of the Scientology classes I was required to attend … [was] contrary and anathema to my Christian faith.” But, according to the E.E.O.C. complaint, when she complained at a staff meeting, Mr. Feldman took her to breakfast and advised her that perhaps she “didn’t really mean what [she] had said” and suggested that she “correct” her point of view.

Ms. Schwartz couldn’t bring herself to do that. According to the E.E.O.C. complaint, Ms. Schwartz, 38, says that she was fired last year as regional property manager for Mr. Feldman because she “refused to continue to take Scientology courses.”

Lawyers for Mr. Feldman dismissed Ms. Schwartz’s complaint as “meritless.”

The controversy comes at an important moment in Mr. Feldman’s career. He is known in real estate circles as an owner of B-grade Manhattan office buildings. In other words, he’s no Douglas Durst or Mortimer Zuckerman. But with the city’s property market flourishing, Mr. Feldman has bigger plans for his fledgling empire, which includes office buildings in Florida and Arizona. In fact, he hopes to ride the coattails of Mr. Zuckerman and other

real estate investment trust barons by going public.

But just as Mr. Feldman is preparing a $290 million stock offering for one of his companies, Tower Equities, along comes Ms. Schwartz, who is preparing to file a Federal lawsuit charging her former employer with religious discrimination. According to Ms. Schwartz’s E.E.O.C. complaint, Mr. Feldman attempted to use the teachings of Scientology to run his company. Ms. Schwartz said he fired those who resisted.

“Larry Feldman really believes in Scientology,” Ms. Schwartz told The Observer . “He feels that he could have an amazing empire by making people Scientologists. He wanted it embedded in their brains-not just to take courses, but to know it, learn it, use it.”

Old Father Hubbard

Mr. Feldman makes no bones about his devotion to the church, whose worshipers include actors Tom Cruise and John Travolta and jazz pianist Chick Corea. Nor did he deny-in a faxed response to The Observer ‘s questions-that he had “engaged a management consulting firm whose methods were developed by L. Ron Hubbard [the founder of Scientology],” although he insisted “these methods are purely secular and business-related.” He also asserted that “no one, including [Ms. Schwartz], was ever forced or coerced into taking a Scientology religious course.”

But Mr. Feldman denied strenuously that he has sought to convert nonbelievers, especially those on his staff: “Yes, I am a member of the Church of Scientology, as are millions of other people worldwide. I would not, and did not, attempt to force my religious beliefs on anyone inside or outside of my office. In fact, of the 68 people that I employ in my various companies, only three are Scientologists, including myself.”

So why was Ms. Schwartz fired? According to Mr. Feldman, she was dismissed because she was “grossly insubordinate” to one of her superiors. He said her complaint is “completely baseless and has only one purpose, which is monetary gain.” In the E.E.O.C. complaint, she said she is seeking in excess of $1 million in compensatory and punitive damages.

The Rev. John Carmichael, vice president of the Church of Scientology of New York, said he’s not familiar with the details of the case. But he said church-approved business courses shouldn’t be confused with indoctrination sessions: “Anyone who claims that a person taking a management course using L. Ron Hubbard’s materials [therefore] has taken a religious course from the Church of Scientology is either purposely distorting the facts, or chooses to remain ignorant of those facts,” he told The Observer .

Mary Wright, Ms. Schwartz’s lawyer, disagreed. “Feldman’s lawyers are going to argue that the courses are not religious in nature,” she said. “But the fact is everything Karen learned came out of The Scientology Handbook , the bible of the Church of Scientology.”

Ms. Schwartz went to work directly under Mr. Feldman in 1989, a time when Mr. Feldman’s business was having problems. Mr. Feldman, 43, graduated with a business administration degree from Windham College in 1974 and went to work for Feldman Equities, the family real estate business founded by his grandfather, Hyman, in 1902.

He and his family attracted considerable attention by breaking ground in 1987 for Tower 45, a 40-story office building at 120 West 45th Street. There is little question that Mr. Feldman was attempting to make a splash in Manhattan with Tower 45. The building boasted a soaring atrium decorated with 20-foot cedars, and Mr. Feldman marketed it by sending live tree saplings to brokers.

His timing was problematic. As the real estate market collapsed at the decade’s end, Mr. Feldman’s firm found that it could fill Tower 45 only by offering to buy out some of its prior leases and, in some circumstances, by giving away two years’ rent. In the midst of this, the building’s beloved cedar trees began to die.

(Mr. Feldman, incidentally, told The Observer that Tower 45 is now fully leased and is a success.)

Go Along, Get Along

Ms. Schwartz describes her former offices as a bleak place filled with jittery employees fearful of losing their jobs. She said Mr. Feldman’s requirement that all employees (except for the security guards and day porters) take Scientology courses only added to the tension. “There was constant stress, with people at each other’s throats,” Ms. Schwartz said in an interview. “People were under pressure to take courses when they were already overloaded with work.”

According to Ms. Schwartz’s E.E.O.C. complaint, Mr. Feldman informed his staff he intended to use his religion as a basis for his company’s management, and those who didn’t go along wouldn’t be “team players.”

She said those who did go along went to great lengths to please Mr. Feldman. In particular, she said, they went out of their way to use graphs to chart all of their activities-even paper filing-as they had been taught in a Hubbard-inspired course entitled “Management by Statistics.” “The people who wanted to impress Larry would put their graphs over their desks,” Ms. Schwartz said in an interview. “Larry would say, ‘Oh, look at that graph,’ and everybody would have to give a little ‘golf clap’ of appreciation.”

Mr. Feldman said the management course “in no way involves any religious issue whatsoever.”

There was also pressure from their instructors, Ms. Schwartz recalled. When she skipped a class, she said she received repeated calls from her instructor to schedule makeup sessions.

According to Ms. Schwartz’s E.E.O.C. complaint, Mr. Feldman’s advocacy didn’t stop with mandatory night classes. In 1993, she alleges, Mr. Feldman scheduled mandatory five-hour Scientology seminars at the office. In some seminars, Mr. Schwartz said, she was forced to read church literature and demonstrate what she had learned by using clay figures and other props: “People would be rolling their eyes while they were doing this, and the teacher would go, ‘Ooh, very good,'” she said.

Mr. Feldman’s alleged activities provoked a strong response from Diana Featherstone, a former vice president of administration for Mr. Feldman. In an affidavit filed with Ms. Schwartz’s complaint, Ms. Featherstone said she told Mr. Feldman that the church’s management training was “very religious and cultlike in nature.” She says she was disturbed enough to resist an order to write a memorandum saying that the courses were mandatory.

According to Ms. Featherstone, Mr. Feldman went into a rage and wrote the memo himself. Ms. Featherstone said she began looking for another job, only to be fired when another employee discovered her résumé in the computer system. According to Ms. Featherstone, the employee was an enthusiastic promoter of the mandatory Scientology classes and soon after became vice president for administration.

“That’s a lie,” Mr. Feldman said of Ms. Featherstone’s replacement. “She’s not a Scientologist. She’s a devout Catholic.”

“I believe that I was terminated because I did not believe in Scientology nor would support Feldman’s promotion of Scientology in the workplace,” Ms. Featherstone said in her affidavit.

Mr. Feldman dismissed Ms. Featherstone’s accusations, saying, “It was well known at the time that Featherstone had a close, personal relationship with Karen Schwartz.”

What’s more, he said, Ms. Schwartz received a promotion and a raise in 1995 after she had refused to participate in Scientology classes-more proof, he said, that her charges are lies.

Ms. Schwartz, for her part, noted that while she was on maternity leave, she learned that her name had been taken off Feldman Equities’ organizational chart, which was developed by Scientology consultants to illustrate how individuals fit into the firm’s corporate structure.

That seemed like a bad sign to Ms. Schwartz. She said her suspicions were confirmed when she was fired soon after she returned to work. According to Mr. Feldman, Ms. Schwartz demanded a full-time salary for only two days of work.

Ms. Schwartz said in her complaint that she asked for a three-day week at the same rate of pay, the same deal that two other women, she said, had received from the company.

Ms. Schwartz said she was offered a severance package if she agreed not to sue Mr. Feldman’s company. She refused.

Employee Accuses Real Estate Firm Of Turning on Scientology E-Meter