<< ARI Watch
Who Is Carl Barney?
The Ayn Rand Institute is kept afloat by donations. Setting aside Leonard Peikoff, who gives ARI the value of the Ayn Rand ® trademark,  the largest donors are Carl Barney, John Allison, and the Koch brothers. Here we focus on Carl Barney.
Mr. Barney started donating to ARI in 1985, the very year it was founded.  By his own account, by 2016 he had contributed over 20 million dollars to the Institute.  He tells why:
“I’m not an altruist ... but I would like to have others experience the understanding and the benefits that I’ve had from philosophy.’ ”
From ARI’s “Voices of Reason” blog entry of June 16, 2015 “The Objectivist Venture Fund Helps Break New Ground”:
“An important new source of funding to help spread Objectivism was announced last year  in July. Through the Objectivist Venture Fund (OVF), Carl Barney, ARI board member, has committed up to one million dollars to support Objectivists with imagination and persistence who want to put these funds to good use in advancing Ayn Rand’s philosophy.”
Of course that is ARI’s idea of advancing Rand’s philosophy. Another recipient of Mr. Barney’s largesse has been Leonard Peikoff. From Mr. Peikoff’s website (still online though he has retired from podcasting):
“The marketing of my podcasts, including the new website, is financed by Carl Barney, Chairman and CEO of several institutions of higher learning, including Independence University. Thank you, Carl, for your generous support.
“ ~ Leonard Peikoff
Mr. Barney also heads the Prometheus Foundation which he started in 2014. That first year it gave ARI about $2.5 million. For what it’s worth, not much, Prometheus itself received about $82 thousand from Goldman-Sachs. 
Mr. Barney is a businessman who from 1985 to 2012 made a fortune running for-profit colleges. In 2012 the federal government instituted more stringent regulation of for-profit colleges that received, via students who did, aid from the federal government. That aid must not exceed 90% of the school’s revenue, for example.  The new regulations did not apply to nonprofits. Simultaneously, and according to Mr. Barney purely coincidentally, Mr. Barney took over a small nonprofit corporation called the Center for Excellence in Higher Education – founded by other people in 2007 – by giving and lending it amounts of money totaling 636 million dollars ($205 and $431 million respectively). After getting control of the Center he had it buy his colleges – the intangible business enterprises but not the real estate from which they operate. The colleges continue to operate more or less as they had before but now officially as nonprofits.
Mr. Barney is chairman and sole voting member of the Center for Excellence in Higher Education. Two non-voting members, Peter LePort and C. Bradley Thompson,  were added when CEHE’s incorporation was amended on September 16, 2015.
The heads of ARI and CEHE are on each other’s boards. Yaron Brook is a director of CEHE and Carl Barney is a director of ARI. Mr. Brook has been on CEHE’s board of directors since Mr. Barney took over CEHE in 2012.  Mr. Barney has been on ARI’s board of directors since 1995. [2 again]
CEHE now consists of three partly brick and mortar colleges – Stevens-Henager Colleges, CollegeAmerica, and California College San Diego. Each has a number of satellite locations, for a total of 20 locations (two more since 2015), consisting of single large buildings or parts of buildings called campuses. A substantial part of a course is online. Mr. Barney is also chairman and founder of Independence University which offers entirely online courses.  According to CEHE’s Form 990 its revenue (receipts) for 2014 was $194,019,539. Expenditures: $161,921,960. Assets: $569,929,222. 
Mr. Barney continues to profit from the colleges. One way is through leasing the buildings, which he still owns personally, to the colleges. His first year as a nonprofit, 2013, he collected $5.1 million in rent.  Another way, and this is conjecture since finance is not my forte, is by collecting interest on the money he loaned to CEHE, in effect collecting interest on money he loaned to himself, which might exist only on paper.
Who is Carl Barney and how did he acquire a fortune approaching the better part of a billion dollars by running for-profit, now putatively nonprofit, in large part online, colleges?
We tackle the two questions in order. What can we say about Carl Barney the man?
Carl Barney was originally from England. As a young man he traveled through Europe and India, ending up for a time in Australia. The mid 1960s finds him in Melbourne, where he stayed four years. After that, according to the New York Times article quoted at the beginning of this essay, [3 again] he
“... ended up in California – dabbling briefly, he admits with some embarrassment, in Scientology – seeking meaning here and there while engaging in the great American tradition of self-improvement.”
The reporter took Mr. Barney’s word at face value but it turns out Mr. Barney misrepresented the extent of his involvement in Scientology, that is, the Church of Scientology, the religious offshoot of Dianetics. (Its critics call it Co$. The dollar sign is not a typo.) 
It is in Melbourne, not the U.S., where he begins studying Scientology – in the mid 1960s. [28, section 6] He begins as a “Preclear.” By 1967 he has moved to New York City. He visits the Co$ headquarters at Saint Hill (Sussex, England) in 1967 and takes the “Special Briefing Course,” winning an “Honours Award” – see Scientology’s journal called The Auditor, issue #26. 
After that Mr. Barney rises rapidly in the Co$ hierarchy. He moves to California and later takes “an intensive 5 day, 13 hour day, training course in Standard Tech” according to The Auditor, issue #45 (February 1969). In the same issue Mr. Barney is listed as Clear #1637. To determine your clarity you get “Audited,” during which you grasp metal handles (cans in the early days of Co$) connected by wires to an “electropsychometer” – E-meter for short.
At least by 1971 he has worked his way up to Operator Thetan – OT for short – because we find him in Scientology’s elite “Sea Org.” And at least by June of that year he is on the crew of the Church of Scientology’s yacht Apollo, sailing the Atlantic and Mediterranean and debasing himself before the ship’s captain, L. Ron Hubbard. 
The website of the Church of Scientology tells the history of such assignments:
And indeed, in The Auditor, issue #64 (from 1970), Carl Barney is listed as being “on FEBC” – the Flag Executive Briefing Course. In other words he was on Hubbard’s Apollo flagship being groomed for an executive position or to become a better executive.
“In April 1970, Mr. Hubbard invited executives from all churches to attend his Flag Executive Briefing Course on the flagship Apollo. The end result placed true administrative experts in all local churches.”
In managing the Apollo Hubbard wrote innumerable memos called “Orders of the Day.” In 2011 hundreds of them, covering the period from late 1968 through 1971, were obtained by the Village Voice. The Village Voice then published a series of articles attacking Co$ and printed several of the memos. Here is one of them, from June 5, 1971 (TR stands for “Training Routine.” Scientologists have a lingo all their own and they love acronyms): 
TR COMPLETIONS REQUIRED
The following persons are ordered to complete the TR Course tonight by midnight: Jean Smith, Carl Barney, Jeff Hawkins, Marcus Lanciai, Terry Lee, Laurie Dean, Harriet Foster, Doris Hoyseth, Lars Gustavson, Edie Hoyseth, Kristen Puckett, Ken Banfield.
Those above not so completing will thereafter be transferred to Cramming and operate on a surcharge of $100 a day.
Yes, it is our Carl Barney. The Village Voice article in which this memo appeared doesn’t mention him though. The author didn’t realize what he had uncovered: a future Ayn Rand Institute board member in L. Ron Hubbard’s Sea Org.
A stint on the Apollo could be tough going. Here is an undated report from the original FACTNet website, which collected statements from former Scientologists:
“Carl Barney went psychotic on the Apollo and was guarded by three other people on the ship. Carl Barney had been made to sit for months doing ‘blinkless TRs.’ ” 
We can only guess what blinkless Training Routines are, or what OT level – there are grades within OT – Mr. Barney eventually attained. The idea is that you approach your own soul, or God, or something and become clearer than “Clear.”
At least by 1975 Mr. Barney is calling himself Rev. Barney. From The Auditor #110 (Judy is about 20 years old):
“JUDY BLUMENTHAL and MIKE SCHEER were married on March 16, 1975 by the Rev. Carl Barney.”
At this time Mr. / Rev. Barney controlled five Dianetics franchises or “Missions”: four in Pasadena, Burbank, Santa Barbara, and San Fernando Valley which together were called The Church of Scientology of Los Angeles, and one in San Diego. The corporate headquarters for all five was in Burbank and known as Scientology Coordinated Services, or SCS.
According to Howard Dickman, a former Scientologist, Mr. Barney owned Co$ missions as early as 1970.  From the scattered surviving documents it is known that for the April to June quarter of 1974 three of Mr. Barney missions received eight “Awards of Merit” based on recruiting and revenue. [16a]
Operation Clambake, a website that publishes exposés of Scientology, features a testimonial by Cheryl Sola, another former Scientologist, about her years in one of the Los Angeles missions.  Ms. Sola’s account begins near the end of 1977. She says SCS ran a loan company called Nationwide Acceptance Corporation, or NAC, which loaned money to anyone wishing to enroll in the Scientology courses given by Mr. Barney’s franchises. The fact that it was really SCS backing the loan was hidden from the customer. Thus SCS collected interest – on nothing. 
In 1979 Hubbard had Mr. Barney ousted from Co$ and declared SP or “Suppressive Person.” Quoting Ms. Sola (when she writes about “the four missions” she refers to the ones in Los Angeles; she could have included the one in San Diego and made the same statements):
“SCS Management Center is where the four missions had their centralized administration: accounting, printing, marketing, management, computer center, etc. ...
“Carl Barney was the missionholder – the franchise owner of the four missions. [List of people and their jobs.] ... I was the receptionist / typist. [More people and their jobs.] ... This was the ‘Management Center’ for Scientology Coordinated Services ...”
“Just prior to the DCSI auditing [in 1979], crazy things were happening at SCS. We were told that Carl Barney had been trying to operate independent of the mother church (Mission Office World Wide in England or colloquially known as ‘MOWW’) and one day MOWW put the four missions ... into receivership because allegedly Carl Barney had been ... doing unlawful things such as having the non-profit corporation pay for his Lincoln Town Car, a cabin at Big Bear, and his pension, using NAC as a money pool for loans, and such.”
It may have been a case of no honor among thieves, but we can’t know that the allegations were true. After all Hubbard may have been trying to make Mr. Barney look bad. But then even without these allegations how much worse can a man look ?
The following is from a “List of San Diego Scientology Missions, Churches (Orgs), Schools, Front Groups 1970-2015” by “Strelnikov,” whoever that is, in a blog post of September 2, 2015: 
“A Scientology Mission is a storefront to sell Hubbard books, along with being a low-level auditing and training center (people usually go from ‘life repair’ to preclear before moving on to the local Org). Usually Missions are the first Scientology outlets in an area, and San Diego followed that pattern.
“As far as we can tell the first Scientology Mission in San Diego was at 1052 10th Avenue, in a single-story building that has since been demolished ... This Mission was part of a series of Missions run by a man named Carl Barney in Los Angeles; the four LA Missions were allegedly incorporated as the “Church of Scientology of Los Angeles” and all five were called Scientology Coordinated Services. In order to keep ordinary people coming in ... Barney ran this odd usury scam involving a front corporation called the Nationwide Acceptance Company, which would defray costs through loans to the public members. Barney was found out by the ‘mother church’ in 1979 and was forced to sign over his Missions and declared a Suppressive Person (an antisocial person wrecking Scientology), and kicked out.”
The following is by “Dart Smohen,” the penname of a former Scientologist, writing on November 17, 2011. (Either he is a poor speller or British.)
“... people such as Alan Walter, Carl Barney, Dean Stokes and others had set up multiple missions that brought in the bulk of Scientology’s income. At one time, over one third of all the public at St Hill came from Alan’s centres. Once ASHO was set up, it was the same there.
“What happened? They were systematically got rid of and their missions stolen from them. They are no longer a part of that group.”
If the above testimonials are substantially correct then two points stand out. First, Mr. Barney was a Scientologist for over 12 years, and deep in the racket for nine of them. This wasn’t just a little blip in his life. He held a leadership position in Co$ and cheated countless people out of their money. He engaged in this fraud until— well, that brings us to the second point.
Mr. Barney did not leave the Scientology racket on principle, coming to realize it was wrong. He went too far with it and around the age of 38 got kicked out.
If true, these two points tell us a lot about Mr. Barney’s mental outlook and character: the man would be a psychopath. Today he says he feels “some embarrassment” about his Scientology past. There is no period of re-evaluation and purgatory in his biography, no atonement, no restitution to his victims. After getting thrown out of Co$ he kept an eye to the main chance and eventually went on to an even more lucrative enterprise, similarly run but with the added advantage that the government backs the loans.
In 2016 Carl Barney lied, and outrageously, to the New York Times reporter writing the article we quoted earlier. Mr. Barney led her to believe that he
“... ended up in California – dabbling briefly, he admits with some embarrassment, in Scientology – seeking meaning here and there while engaging in the great American tradition of self-improvement.”
From the mid 1960s to being kicked out in 1979 is 12 continuous years of dabbling briefly.
Of course working his way up to Sea Org and stints on the Co$ Apollo was no brief dabble, it took a lot of time and effort. Setting up and / or running five Co$ franchises likewise. And conning people out of their money may not be your idea of “engaging in the great American tradition of self-improvement” either.
He feels some embarrassment about it ! In a moment this empty shell of a man will lecture us on values – read on.
Mr. Barney seems to have retained plenty of money after his ouster from the Co$ business, enough to invest in real estate – at any rate the NYT article doesn’t say where he got the money to invest in it. Later, as we shall see, he is buying colleges.
Consider the date range he gave the NYT reporter for investing in real estate:
“By the 1970s, he participated in another American tradition: making money in real estate.”
If the history we unearthed earlier is correct, by 1970 he had gained entry into the Church of Scientology’s Sea Org and he owned and managed several Church missions. He was deep in the Co$ racket, making money in real estate perhaps but not exactly in the American tradition.
The NYT article then says that while he was a landlord he discovered Atlas Shrugged and was intrigued. I think I’m going to throw up. Then he attended Rand’s 1981 talk in New Orleans, her last public appearance before dying a few months later. Again quoting the NYT article (we silently correct a typo and omit our external quote marks):
He heard speaker after speaker declare, “She changed my life.”
... “This is what Rand taught me – identify that values that are important to you and practice the virtues to achieve that,” he said. It infused him with “a central purpose.”
That led him to pursue a business in education. [???] So when a friend told him about the existence of for-profit colleges, he was struck. “Wow,” he thought, “you could actually buy a college? That’s what I want to do.”
In time, he ended up buying and establishing several colleges including CollegeAmerica, Stevens-Henager and California College. He developed an online division, Independence University.
A bit glib don’t you think?
Long before Hubbard started the Church of Scientology he famously said “I’d like to start a religion – that’s where the money is.” After reading the Form 990s of ARI and CEHE, future Hubbards ought to consider the possibilities in education.
About Mr. Barney merging his for-profit business with CEHE to make it nonprofit (our external quote marks are back):
“It was thinking about the future of that business [his for-profit colleges] and his legacy [???] that Mr. Barney said led him to merge his colleges in 2012 with the Center for Excellence in Higher Education, a nonprofit that supports free-market ideas in higher education. The center bought all the schools for about $630 million.”
So it was just a coincidence that the government was beefing up the oversight of its guaranteed loans.
In case the reporter didn’t understand, here is CEHE’s website on the subject (Mr. Barney has trouble with commas):
“From 2007-2012, CEHE[,] a 501(c)(3) organization[,] operated as a public charity. ...
“In 2012, CEHE identified a unique opportunity. The sole stockholder, Carl B. Barney, of a group of colleges, including CollegeAmerica, Stevens-Henager College, and California College San Diego[,] wanted to become a nonprofit institution. He shared much of the same vision for improving higher education as the founders of CEHE. The colleges embody many of the principles CEHE sought to promote in its efforts to improve higher education. It was a perfect match. On December 31, 2012 the colleges were merged into CEHE, which was restructured as a 501(c)(3) educational organization.”
Such a good man, we are to think.  But why did Mr. Barney suddenly want his schools to be nonprofit after years of crowing about the virtue of for-profit schools? Nary a word there is in answer. As for his “legacy” (see previous quote), a for-profit corporation is just as immortal as a nonprofit.
Now let’s get down to business. When someone, especially someone of Carl Barney’s low caliber, becomes super-rich quickly, one suspects the iron hand of government tilting the game board his way.
Mr. Barney made a fortune in education by taking advantage of a gross marketplace distortion caused by local and federal government. The distortion has two prongs: government regulation of many occupations, and government grants and guaranteed loans to students.
Much of government regulation is either unnecessary or too restrictive (protecting the status quo from competition rather than protecting the public),  but some of it is legitimate and in a free market most of the legitimate part would be replaced by private certification and common tort law. Regulation is a complicated subject and we shall set aside that prong. The real problem is the other one, Barney’s exploitation of government grants and loans to college students.
Barney’s defenders argue that the government has merely supplanted private banks, that a government loan is much like a private one. In fact the two are very different. (1) The government makes it possible for a non-creditworthy person to obtain a loan. (2) The government subsidizes much of the interest, in other words taxpayers pick up the tab, either directly or through inflation. (3) The government guarantees the loan, meaning taxpayers pay the bill if the person defaults on the loan (nevertheless he or she is saddled with the debt; you’ve read the horror stories).
Note that it is not Barney who gets the loan. Barney gets the money, the student gets the loan which he, not Barney, pays back.
Barney’s defenders also claim that the government has monopolized the student loan business. This is hard to understand. Certainly it hasn’t completely monopolized it, not by a long shot. A bank will loan money without asking what the money will be used for. Their primary consideration is getting it back with interest. They ask for either good credit, a co-signer, or collateral. Barney’s defenders think there is something special about education and that people who need theirs financed ought to get special favors, if not from a private bank then from the federal government.
Government subsidy to buyers of a commodity, article, good or service – just call it a commodity – increases the cost of that commodity, enriching the purveyors of it and impoverishing those not “connected.” This is elementary Economics and no more well illustrated than in the absurdly inflated cost of college today.
As we have seen, Mr. Barney’s schools are no longer for-profit, that coincident with more government restrictions on government aid to for-profit colleges via their students, [5 again] he merged his schools with a nonprofit called the Center for Excellence in Higher Education. The following is from the second New York Times article about this (we leave off our external quote marks): [10 again]
In 2012, Carl B. Barney sold several for-profit colleges ... to a small Denver-based nonprofit, the Center for Excellence in Higher Education, which ... consists of a single member: Mr. Barney, its chairman.When a man resorts to a library answer, a glib linguistic deduction in the face of common sense, you know he’s lying. The money he gets, and/or controls which is the same thing, may not officially be called profit, but he profits just the same.
Mr. Barney lent the nonprofit $431 million for the sale, and donated millions more ... He ... collected nearly $5.1 million in rent from the schools in 2013. ...
... [The Justice Department claims that] “the schools continue to operate more or less as they did prior to the merger.”
He derided the notion that he was making any money from the schools or the center ... “You cannot profit from a nonprofit,” Mr. Barney said.
The IRS approved CEHE as a charity, however in August 2016 the Department of Education refused to recognize it as a nonprofit for the purpose of receiving money from federal grants and loans to students. CEHE then filed a federal lawsuit against the Department of Education. 
Mr. Barney seems to want government money scot-free of government oversight. There would be nothing wrong with a profit whatever it is called if honestly earned. The real question is, did Mr. Barney acquire his profit honestly?
In asking that question we set aside the fact that government interference in the market gave Mr. Barney two advantages he would not have had otherwise. (1) The very existence of those many students who were not creditworthy and absent government grants and loans would not have been able to attend his colleges. (2) The inflated price his colleges could command due to those grants and loans. Most of Mr. Barney’s wealth came from the government. Between 2002 to 2013 alone his schools received .66 billion dollars from the federal government.  Setting aside this corporate welfare, did he run his colleges honestly?
Before we look into the operation of his colleges first a comment on news reporters: Their articles about for-profit schools, and turning for-profit schools into nonprofits, are frequently slanted against the school owners or (after converting to nonprofit) putative owners. When a Leftist – and most journalists are Leftists – sees the word “profit” he automatically goes into attack mode. Still, if you read their articles critically, looking for bare facts and quotes rather than evaluations, they can be informative.
The Leftist thinks “all businessmen are dishonest.” To reverse that attitude and say “all businessmen are honest” is just as much a knee-jerk reaction of the unthinking and unobservant. The fact is that some businessmen are second cousins to con men and crooks.
In July 2012 Debbi Potts, former director of the Cheyenne, Wyoming satellite campus of CollegeAmerica, and Linda Carter, another high-ranking employee, resigned due to activities of the school they thought were wrong. Potts sued CollegeAmerica / CEHE, claiming in her complaint that her supervisors asked her to lie in order to qualify the school for accreditation, and that the Center got hundreds of millions of dollars in federal money by claiming the school abides by a number of laws, regulations and contractual obligations when it didn’t.
Through his lawyers Carl Barney retaliated by filing a lawsuit of his own against Potts, accusing her of violating a contract she had signed shortly after having left CollegeAmerica. The contract was about negotiated back wages, bonuses and a severance agreement, but he inserted a provision that prohibited Potts (quoting the contract)
“from personally (or through the use of any third party) contacting any governmental or regulatory agency with the purpose of filing any complaint or grievance that shall bring harm to CollegeAmerica, Denver Inc. and any of its related companies.”
Afterwards despite that clause (which was illegitimate) Ms. Potts reported several alleged violations of accreditation standards to the agency that accredits CollegeAmerica, the Accrediting Commission of Career Schools and Colleges (though nominally private it is the Department of Education’s accreditor). Her purpose was not “to bring harm to CollegeAmerica,” it was to point out what she thought were violations. See “Whistleblower sues CollegeAmerica claiming wide-scale fraud” and the federal complaint “Potts vs. Center for Excellence in Higher Education, Inc.” 
It is very like the Scientologist mentality to use the law in this aggressive manner. Whether or not Mr. Barney loses his lawsuit against Ms. Potts the aggression is intimidating.
You can read about a Colorado state attorney’s lawsuit against CEHE in the article “Colorado Sues CollegeAmerica for Systematic Deception.”  When you’ve finished reading this essay you can read the complaint here.
In January 2013 Katie Brooks and Nannette Wride, former recruiters at Stevens-Henager’s Orem campus, filed suit against CEHE under provisions of the federal False Claims Act. See “USA ex rel., Katie Brooks and Nannette Wride vs. Carl Barney et al.” [23 again] When you’ve finished reading this essay you can read the meat of the complaint here.
It might be that what motivates the Department of Education and others to ferret out wrongdoing at CEHE is an anti-business mindset, or in the case of Brooks and Wride a pecuniary interest, but their motivation doesn’t make wrongdoing disappear. Forget the Department of Education and forget the reason Mr. Barney went nonprofit; if the complaints of Brooks and Wride indicating systemic corruption are true then Barney is either an extremely incompetent overseer or rather less than honest.
At OCON 2016, as part of the session of July 7 called “Objectivism as a Source of Superior Performance in Business” Mr. Barney gave a talk he titled “The Objectivist Ethics Applied to Life and Business.” Here is ARI’s advertisement for the talk, written by Mr. Barney:
“Philosophy is fundamental to all of our activities, personal and business. When we discover and apply a new philosophy, our activities change; we begin making our lives anew. Ayn Rand wrote, ‘As man is a being of self-made wealth, so he is a being of self-made soul’. We make our own character; we make our own life. This presentation shows how I applied Objectivist ethics to creating my life anew and a prosperous business.”
Hallelujah, born again, a not very penitent sinner steps up to the stage. It’s sickening to hear Rand’s words uttered in this – I will use the word – context.
“Follow the money” as the saying goes. The IRS forcefully extracts money from taxpayers, the Treasury gives guaranteed loans to Mr. Barney’s students to pay his prices – grossly inflated because of those very loans – and Mr. Barney donates millions to ARI. And if the testimonials quoted earlier are true, he started this business, at least in part, with money gotten from the Church of Scientology racket, which he left only because they kicked him out.
If the testimonials are true then his college business was built on a foundation of fraud. And if the plaintiffs of the lawsuits against Mr. Barney are correct then his colleges are in substantial part cargo cult colleges, going through the motions without the substance. 
Critics of ARI have noted a vague analogy between it and the Church of Scientology. The ARI leadership’s moralizing condemnation and excommunication in the Reisman and McCaskey affairs  is reminiscent of Scientology’s designating people “Suppressive Persons” – and in both organizations you are required to take the truth of the denunciation on trust, to question is forbidden. Then there is the cult of personality: Rand for ARI (see its website), L. Ron Hubbard for Scientology; and though Rand did not write cant, ARI turns what she wrote into cant. Another similarity: Some of what ARI says is true and valuable taken by itself, just as Scientology’s crusade (in Mr. Barney’s time) against certain abominable practices of the psychiatric profession was true and valuable taken by itself, but considering their other activities you would never support either organization.
Now we find a literal connection to Scientology in the biography of Carl Barney, ARI’s largest donor and a director on their board. A former leader of the Church of Scientology (and someone whose current business practices are the subject of several lawsuits) is helping prop up and guide the intellectual fraud known as the Ayn Rand Institute. 
1 “Ayn Rand” appears with the registered trademark symbol after it in the copyright notice at the bottom of each webpage of the Ayn Rand Institute. However, the U.S. Patent and Trademark Office ( www.uspto.gov ) has no record of a registration. Possibly it is registered in a foreign country.
2 According to the talk “The Ayn Rand Institute’s First Thirty Years” Yaron Brook gave at OCON 2015. A slide shown during the 1985 section of the talk, the year ARI was founded, read
ARI receives first ever contribution fromLater Mr. Brook said Mr. Barney “has been a board member for 20 years now.”
Carl Barney: $5,000Today, ARI board member and still the
3 “An Ayn Rand Acolyte Selling Students a Self-Made Dream”
by Patricia Cohen, The New York Times, May 7, 2016.
We have amended the punctuation as given in the article, But => but. Since this was aural speech either one is an accurate transcription.
4 Here is the Prometheus Foundation’s first, and latest available, Form 990 (we explain what that is in a moment):
It gave the Ayn Rand Institute $2,440,500 directly and The Undercurrent (controlled by ARI) $40,000 for a total of $2,480,500 to ARI in 2014. The Form 990s for 2015 and 2016 are not online yet.
The U.S. Treasury Department, IRS division, requires nonprofit corporations to submit Form 990 not long after the end of each fiscal year. It’s usually called Form 990 but its title is “Return of Organization Exempt From Income Tax.” In other words, the tax return for an organization that is exempt from the corporate income tax. It is public and several websites that monitor charities make them available online.
At the end of its fiscal year a nonprofit / charity has five months to submit Form 990 and they can get a six month extension. Then there is a few months delay before the IRS makes the form available to the public.
5 The new requirements were principally (1) At least 10% of the schools revenue must come from sources other than federal student aid (such as government backed loans and Pell Grants). (2) More degree programs must show that a certain minimum percentage of graduates succeed in finding work (“the gainful employment regulation”), and ditto for paying off government backed loans.
6 “Articles of Amendment to the Articles of Incorporation (Nonprofit)”
“Center for Excellence in Higher Education, Inc.”
Bradley Thompson is a professor at Clemson University. Peter LePort is chairman of the board of LePort Schools and a bariatric surgeon. After looking up what such a surgeon does I lost my appetite and haven’t eaten since, LOL.
7 In each man’s capacity as board member of the other corporation each works a nominal two hours per week with no compensation. These facts are from their corporations’ respective Form 990.
Here are CEHE’s Form 990s from GuideStar (FoundationCenter doesn’t have them, which is unfortunate because their versions are automatically OCR searchable whereas GuideStar’s are not). Its fiscal year is the same as the calendar year, January 1 to December 31:
Arcane detail: ARI’s fiscal year differs from the calendar year. It straddles two years, going from October 1 to September 30. Accountants usually refer to a given fiscal year as “fiscal year ending” then whatever the ending year.
The Form 990 for charities with such out of sync fiscal years can be confusing because the beginning year is printed in large type at the upper right of the form. But, to repeat, accountants refer to it using the ending year, as do charity monitoring websites.
8 The websites of the four schools are very similar: www.Independence.edu , www.StevensHenager.edu , www.CollegeAmerica.edu , www.cc-sd.edu . CEHE’s website is www.cehe.edu .
9 In searching for financial data you might see the last two words of CEHE mashed together, like this: “Center for Excellence in Highereducation” (e.g. CharityNavigator, GuideStar, CitizenAudit, NonProfitFacts). However CEHE’s Form 990 shows the correct name.
10 “Some Owners of Private Colleges Turn a Tidy Profit by Going Nonprofit”
by Patricia Cohen, The New York Times March 2, 2015
11 Lafayette Ronald Hubbard (1911 – 1986) promoted his view of Man in the book Dianetics: The Modern Science of Mental Health published in 1950. He writes about people and their minds as if they were machines. In 1952 he founded the “Church of Scientology.” In the post war years “science” was a very popular word and both book and religion capitalized on it.
These excerpts from The Oregonian newspaper are a good place to begin learning about Co$:
Then “Operation Clambake”:
“The Truth About Scientology” and “Scientology Lies”:
Robert Kaufman’s book Inside Scientology is online:
The managers who were cheated out of their ill-gotten gains by even more unscrupulous managers higher up deserve no sympathy whatever. The real victims are the students – or whatever they’re called, parishioners – who did not rise to management.
The official website of this “church”:
12 This and the other Auditor references we cite are courtesy of Virginia McClaughry:
13 Apollo was the flagship of the Sea Org, there were other ships and there were Sea Org personnel on land. According to Hubbard the Sea Org was “just another Scientology organization with the difference that it handles extremely advanced work and materials, and its personnel are OTs. Its mission is to bring Clears through the upper levels safely and certainly and with speed, and it also has the mission of getting in Ethics.” (“Ron’s Journal 67” or “RJ67,” taped on September 20, 1967.) Of course that is Hubbard’s idea of Ethics.
14 “It’s a Scientology Book Avalanche! RUN FOR COVER!”
by Tony Ortega, The Village Voice, June 8, 2012.
15 “Scientology & Suicide”
FACTNet (original version from 1998)
At the end it lists reported “psychotic episodes.” The full entry for Mr. Barney reads:
“Carl Barney went psychotic on the Apollo and was guarded by three other people on the ship. Carl Barney had been made to sit for months doing ‘blinkless TRs.’
One of the periodic extremes Hubbard took no responsibility for. I heard that at one point he was strapped to his chair.”
16 Near the end of 1972 Howard Dickman signed a five year contract to work for Co$; after putting in the five years he left. His account, published on the Scientolipedia website, for the most part has good things to say about Co$.
The entire Scientolipedia website tends to favor Co$. Even if an individual author has left Co$ he says many positive things about his experience.
The following is from a second article by Mr. Dickman, titled “The early days of Scientology in San Diego, California” which included research beyond his personal experience:
www.scientolipedia.org/info/The_early_days_of_Scientology_in_San_Diego,_CaliforniaThat article contains a map with the caption “List of Carl Barney’s SCS Scientology Missions in 1970”:
“[Dennis and Enid Vien] started the very successful Scientology Mission at 4633 College Ave, San Diego, where Enid was the Tech and Qual person and Dennis was in the Public Division. Their mission was acquired by Carl Barney sometime in 1970.”
“In late 1971, Carl Barney’s SCS Mission moved to a new location at 1052 10th Avenue, San Diego. I was introduced to Scientology at Carl Barney’s SCS Scientology San Diego Mission on August 7, 1972.”
Carl Barney is mentioned in one other place on Scientolipedia. The account of Dick Coanda refers to “Carl Barney’s Scientology Coordinated Services mission on 10th Street.”
Maureen Turner, a victim of Scientology, refers to the
“Santa Barbara Mission of the early 70’s.
Owned then by Carl Barney.”
MwG posted “My Story” to the newsgroup alt.religion.scientology on May 21, 2001, now hosted by Google Groups:
He begins, “I joined Scientology at the Valley Mission in North Hollywood in 1973-4. Being in my mid twenties I was looking for purpose in life.” At first he was delighted with the instruction and took out a loan of $6,000 to pay for auditing. “I had nothing to lose as I was told my money would be refunded if unhappy with any services.” His brother joined him. In the excerpts of his post that follow punctuation and spelling errors have been silently corrected, and some paragraphs have been split or combined for clarity.
“The missions were known by some as franchises. This was part of a 5 mission chain in Southern California owned by a fellow named Carl Barney. He made a fortune. During this time I went to Santa Barbara with about 10 other guys and built the Santa Barbara [Mission] ... We renovated an old hotel for the project. I received no pay but was happy to be in Ron’s good graces for my efforts.”If true it was the first in command who was responsible.
“I attested to [that is, was determined to be] a well and ‘happy human being’ with completion of Dianetic auditing. I was actually depressed about the results. I continued into the grades when one day my brother and I were talking and decided that the auditing results were unsatisfactory for both of us. We asked for a refund and were denied. We sued and won – they folded before the court trial.“I purchased a copy of Kaufman’s Inside Scientology. It was the very first book to expose OT3 and the clearing material. I was so shocked and [angry] I took the book to Tom Snyder’s producer Bruce Mckay as they were doing a 3 part show on the cult for syndicated late night TV. They used the book’s contents extensively. Tom specifically asked the 2 black and white collared ‘reverends’ [at the Mission]: ‘Why are members of your church forbidden to read this book?’“I was subsequently followed and a car was parked out [in] front of my apartment on and off for about 2-3 months with a goon staring at my window. ... I recognized him as Carl Barney’s 2nd in command, a robotic OT type. I purchased a 38 revolver because I was unsure of their intentions. Scientology [that is, Valley Mission] denied any involvement of course. ...”
“... They literally, stole every single copy of Inside Scientology in the Los Angeles county library system.”
16a “Executive Directive: The Award of Merit” August 11, 1974
17 “The Cheryl S[ola] Story: Carl Barney and the SCS Missions”
The existence of NAC is corroborated by three replies to a blog post by Mike Rinder of December 3, 2014. From the first reply by “mreppen”:
From the second by “jonsty”:
“I recall in 78/79 Carl Barney founder of the ‘SCS Missions’ in Southern California set up a Credit Union for his Scientology Missions. (Valley, Pasadena, and perhaps Santa Barbara?).
“It made a killing.”
So that he was then in debt to the mission, through NAC, principle and interest. The third reply is by “Deirdre”:
“We had similar financing back in the SCS mission days in Southern California run by Carl Barney. There was a created financial outfit called Nationwide. I remember the reg[istrar] telling me, in the mid 70’s, that I “could” qualify for a loan. Me? I had no job, no assets, no credit. I provided the Nationwide ‘loan office’ with my stereo worth $25 as collateral. Voila! I had $5000 that was given directly to the mission.”
“... I was caught up in the same SCS scheme, which Cheryl Sola writes about in detail here: [link to Operation Clambake article above]”
18 SCS was lending money to itself, that is, doing nothing at all, yet collecting interest on the (nonexistent) money. Furthermore, since the service SCS rendered cost it very little, if a borrower defaulted it lost very little.
According to another testimonial, which we quote later in the text, the rate of interest was usurious. Note to Yaron Brook, who worries about these things (see Anti-Capitalism and Anti-Semitism on this website), these people appear to be Gentiles, LOL.
19 “List of San Diego Scientology Missions, Churches (Orgs), Schools, Front Groups 1970-2015”
Blog of “Strelnikov” September 2, 2015
By the way, while Carl Barney was running his missions in Los Angeles and San Diego, David Miscavige, second in command to Hubbard, was running the ones in San Francisco. Today Miscavige runs all of Co$.
20 Another sample of Mr. Barney’s writing, quoted in the article “The Massively Underappreciated Virtue of Egoism in Business” by Michael Hurd (October 4, 2015):
“As to compensating employees: Justice in business, as you know, is crucial – one of its highest virtues and values. I joyfully practice justice in my company. My executives and staff do so many great things every day for the company and indirectly for me, and I’m so appreciative of it that I’m as generous as I can be with them. For instance, I buy all my staff and executives thoughtful Christmas gifts along with a ‘handwritten’ letter of appreciation and thanks – this is a joyous practice of justice.”
21 Or incompetent or corrupt, but this is not the place for a disquisition on the subject of government regulation versus common law.
22 “College Group Sues U.S., Saying It’s Target of Political Agenda”
by Patricia Cohen, The New York Times August 30, 2016
23 “USA ex rel., Katie Brooks and Nannette Wride vs. Stevens-Henager College, California College San Diego, CollegeAmerica Denver, CollegeAmerica Arizona, Center For Excellence In Higher Education, and Carl Barney”
24 “Whistleblower sues CollegeAmerica claiming wide-scale fraud”
by Kirk Mitchell, The Denver Post July 13, 2016
“Potts vs. Center for Excellence in Higher Education, Inc.”
“The Covert For-Profit”
by Robert Shireman
In 2011 CEHE spent 16% of its revenue on instruction.
25 “Colorado Sues CollegeAmerica for Systematic Deception”
by David Halperin, Republic Report February 17, 2015
“CollegeAmerica and affiliated schools accused of deceiving students about value of degrees”
by Pamela Manson, The Salt Lake Tribune March 30, 2015
“State of Colorado, ex rel. John W. Suthers, Attorney General, and Julie Mead, Administrator, Uniform Consumer Credit Code vs. Center for Excellence in Higher Education, Inc. a not-for-profit company; CollegeAmerica Arizona, Inc., divisions thereof, d/b/a CollegeAmerica; Stevens-Henager College, Inc., a division thereof, d/b/a Stevens Henager College; College America Services, Inc., a division thereof; The Carl Barney Living Trust; Carl Barney, Chairman; and Eric Juhlin, Chief Executive Officer”
26 The same could be said of most any college today but not to the same degree.
27 In general outline the Reisman and McCaskey affairs could have come right out of Co$. See ARI vs. George Reisman and The Ayn Rand Institute vs. John McCaskey on this website.
28 That the Ayn Rand Institute is an intellectual fraud is the sub-theme of every article on ARI Watch but what is the evidence for identifying the “ARI Barney” with the “Co$ Barney?”
The evidence goes beyond the fact that they have the same name and belong to the same generation. It is the total of that and the following:1. Both are from England.2. Both stayed in Melbourne (Australia) for a time.3. Both ended up in California.4. Both were Scientologists in California.5. Leaked Co$ records show but one Carl Barney.The Church of Scientology loves to keep records and these days the lists of “Service Completions” of yesteryear have been leaked and are available online. See
There is only one Carl Barny. This is probable evidence rather than definitive because that list may not be entirely complete or accurate.6. The ARI Barney had been a Scientologist in Melbourne.That last is telling. If the witness we cite in a moment is correct, then the ARI Barney lied to the NYT reporter Patricia Cohen, who wrote (see footnote 3 above):
He ended up in California all right – but arrived as a seasoned Scientologist, not some naive seeker of truth.
“As a teenager, he traveled to Australia ... He toured India, and later ended up in California – dabbling briefly ... in Scientology – seeking meaning here and there ...”
I found evidence for this as follows. I placed links to photos of the ARI Barney, and to a video of him, on the Ex Scientologist Message Board and asked if anyone recognized the man as the Co$ Barney. One response was from “RogerB,” who had been active as a Scientologist in Melbourne and London. He recognized the ARI Barney as the Carl Barney he had known in Melbourne in the 1960s, writing (his ellipsis in the middle, one typo silently corrected):
The identification alone is not news, the ARI Barney himself says he was in Australia before coming to the U.S. What is news is that the Australian Barney was a Scientologist. RogerB later saw him in London at a Co$ lecture. This was probably during his visit to England (where the Co$ headquarters is located) after Barney had moved to New York.
“... seeing the video, the guy introduced as Carl at 49:41 doing the pitch about ‘seed money’ is definitely the Carl I knew in the CofS . . . notice the particular body language and angular carrying of his head and the automatic straining of his neck muscles!!!! This is Carl B all over.”
A hagiographic biography of Barney by Stephen B. Friedheim – it reads like a CEHE press release – is more specific than the NYT article about Barney’s whereabouts in Australia. It says Barney eventually arrived in Melbourne and stayed there four years – hence #2 above.
“Carl Barney: An Englishman Living the American Dream”
Mr. Barney has a fondness for acronyms, see page 3 of the above. By itself this is neither here nor there but illuminated by his Scientology past one imagines a pint size L. Ron Hubbard.
Acronymitis aside there are too many coincidences to ignore. Even at this point it would be difficult not to conclude that the Co$ Barney is the ARI Barney.
7. There is photographic evidence.
Here are five photos of the ARI Barney in one jpg file:
The first two photos were taken in 2016, cropped from the NYT article referenced in footnote 3 above. The third is from the website of LePort Schools. The fourth is from the website of the Objectivist Venture Fund. And the last, taken c. 1985, is from a video of ARI’s OCON 2015, near the beginning. Here is the video starting not at the beginning but at 49:38 where Yaron Brook ends his introduction of the ARI Barney:
The c. 1985 photo appears at 4:24.
A photo of the Co$ Barney and a fellow Scientologist appears in the Co$ journal The Auditor, issue #45 of February 1969, page 10. The caption reads “Franchise centre staff members, Carl Barney and Sandi Mehr, study Standard Technology.” A copy appears in this blog post by Virginia McClaughry:
To see that this Co$ Barney and the ARI Barney are one and the same, place their pictures side by side:The left is cropped from The Auditor, the right from the OCON video at 51:36 with color removed. In the left photo he is seated leaning on a table, in the right standing, which accounts for the different set of the head. Same nose, same forehead, same everything except of course the hair.
The ARI Barney admitted to “dabbling” in Co$ at the time of The Auditor photo nonetheless that photo provides new information. Without it, today he could claim that there are two Barneys, one of whom ran the Missions (the Co$ Barney in the left photo a year or so later and beyond) and the other, him (the ARI Barney in the right photo), who just dabbled in 1969. But obviously they are the same man, the “dabbler” became an executive in the Co$ cult-racket.
In 1969 he is only a Co$ staff member and apparently has yet to become a franchise owner. For our own amusement we still seek a photograph from the time when he ran the San Diego and Los Angeles missions, but an additional photograph is unnecessary to prove that the ARI Barney and the Co$ Barney are the same individual.
Response to Barney Revelations »