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parties and that my participation would not be in conflict with the
Church or any professional responsibilities that I might have had as
a result of my relationship to the Work as a lawy.er and as an advisor
to Mr. Arsmtrong.
At that time, it was also clearly foreseeable that at the termination
of the lease the provisions of the tax law would result in a definite
tax loss for me. The Church agreed to indemnify me from such loss if,
in fact, it were to occur. In July 1977, the lease was terminated,
but well in advance of the termination date provided for in the lease
agreement. Accordingly, I am now in the process of calculating the
actual economic loss that
I
have suffered as a resul� of the trans
action that began in 1967.
In the fall of 1969, Mr. Armstrong decided to terminate the services
of his advertising agency, M. B. Scott, Inc., and he determined that
it would be in the best interest of the Work that the time-buying
function be transferred to an agency that would be more under the con
trol of the Work. Mr. Armstrong and Mr. Portune werer>oth aware of
my vast background and experience in the advertising field as a result
of my contact over the years with Mr. Scott and other advertising
agencies, as well as my broad overview of the entire communcations
field as a result of my law practice. Hence I was asked to form an
Advertising Agency and to limit its activities to representation of
the Work.
From the late fall of 1969 until March 1975 when I was baptized, I
was the president of Worldwide Advertising Inc., although several years
prior to that time I had delegated away most of the day-by-day operations.
During the years 1969 through 1975, copies of the Worldwide Advertising
income tax returns were made available to Mr. Portune and my remunnera
tion to Worldwide Advertising was, of course, included as an important
item on those tax returns.
In 1975, upon my baptism, and of course after becoming a director and
an officer of the church and the college, it was necessary for me to
divest myself of any and all interest in Worldwide Advertising.
Prior to 1971, I never lived in a faculty or college home. Although
Mr. Armstrong and others thought it would be better for me to live in
the Pasadena area, my wife was unwilling to make the move from Beverly
Hills and hence we did not. In 1971, however, it became clear to Mr.
Armstrong, to Mr. Portune and to me that there would be benefits of a
substantial nature to the Work if I were to be able to undertake the
responsibility of seeing to the needs of the very important overseas
visitors that were coming to California at Mr. Armstrong's invitation,
and also to maintain a residence that would lend itself to the type of
formal and large scale receptions also necessary to fulfill the various
responsibilities of the Work as a result of its ever-increasing
activities throughout the World.
Accordingly, a more appropriate home was found in Beverly Hills that
was, in Mr. Armstrong's opinion, the perfect residence for such
activities. We did not feel, however, that it would be possible for
me to live in such a residence on a tax-free basis as did our ministers
and faculty members. Hence, we agreed that I would purchase the home.