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Bhagwan’s Bottom Line I

Rajneesh’s far-flung empire is more material than spiritual.

Courtesy of Netflix

Bhagwan Shree Rajneesh, who often has extolled the virtues of capitalism, is clearly a man who practices what he preaches. His name does not appear on any known document of ownership of a single enterprise or piece of property anywhere in the world. But through top assistants like Sheela Silverman and her husband, John Shelfer, (whose names do appear on such documents), Rajneesh has developed a complex and lucrative international financial empire that belies his claim to be a purely spiritual leader oblivious to worldly affairs.

The heart of Rajneesh’s financial empire is the Rajneesh Foundation International (RFI), an Oregon nonprofit corporation. According to its charter, RFI is “organized exclusively for charitable purposes and particularly for the spreading of the religious teachings and messages of Bhagwan Shree Rajneesh.” RFI is the successor to the Rajneesh Foundation in Pune (Poona), India, the city in which Rajneesh’s community was located until he fled that country in June 1981 with Indian tax authorities on his heels.

The Rajneesh Foundation in India, whose tax-exempt status as a charitable institution had been revoked, was effectively disbanded when seven of its eleven officers resigned their positions just as they and Rajneesh were leaving for the United States. At the time of their departure, in the words of the highly respected Indian magazine India Today (June 15, 1981), the Rajneesh Foundation of India was “up to its neck in income-tax arrears, defalcations with the charities commissioner, a major insurance fraud, and a string of cases for criminal offenses which were still being investigated when they left.”

The new foundation in Oregon, i.e., RFI, receives the monies from most of the Rajneesh organization’s known sources of income in the United States: sales of Rajneesh books, audio and video tapes, films and paraphernalia; various therapy and meditation courses offered at Rajneeshpuram and other Rajneesh centers; profits from the annual World Festival held every summer at the ranch in Oregon; and donations from wealthy and nonwealthy followers. Although informed observers seriously doubt that these stated sources of income can, by themselves, fully account for the apparently unlimited nature of Rajneesh financial resources, they are quite sizable. It has been estimated that last summer’s Third Annual World Festival at Rajneeshpuram netted upward of $10 million for the city and its various business enterprises.

Most residents of Rajneeshpuram are members of the Rajneesh Neo-Sannyas International Commune (RNSIC), an Oregon “cooperative corporation” whose stated purpose is “to be a religious community whose life is, in every respect, guided by the religious teachings of Bhagwan Shree Rajneesh and whose members live a communal life with a common treasury.” The commune provides the workforce to run the ranch, build and maintain the city, and operate various Rajneesh businesses. Members of the commune not only work twelve hours a day, seven days a week, for no wages, but also actually have to pay a substantial fee for the privilege of being in the Bhagwan’s Buddhafield and performing this act of “worship.”

The fee for residing and working at Rajneeshpuram is said to range between $500 and $1,500 a month. Apparently, new recruits also pay an initial entrance fee that can range from $5,000 to $150,000, depending on the person’s financial resources and work skills. Any money a commune member has left after paying these fees may be spent in the various high-priced boutiques, shops, and restaurants in Rajneeshpuram.

Because it is a cooperative, the commune is tax-exempt. Under Oregon and federal tax laws, members of a co-op are taxed on benefits they receive from their membership, but no income tax is levied on the organization itself. The RNSIC is said to operate at a loss. Even if it made a profit, tax experts say, the income it would pay out would be apportioned to so many members that actual taxes would be very low relative to those that would be owed by a single profit-making entity.

The “profit-making” arm of the Rajneesh corporate empire is the Rajneesh Investment Corporation (RIC), a wholly owned subsidiary of RFI. The investment corporation holds title to Rancho Rajneesh and the entire city of Rajneeshpuram, as well as to Rajneesh properties in Rajneesh (formerly Antelope) and Portland, and in turn leases these properties to the commune. These same properties are fully mortgaged to Rajneesh Services International Limited (RSI) in London, a registered English corporation whose principal function appears to be to transfer money from one component of the Rajneesh international financial empire to another. The RIC also may have various specialized holdings in an assortment of subsidiary trusts, such as the Modern Car Trust, which manages the Bhagwan’s fleet of forty-plus “graced” Rolls-Royces.

Attorneys and accountants who have pondered the Rajneesh corporate octopus believe that the investment corporation, RIC, serves two different functions. First, they say, because it is a private corporation, RIC’s records are not open to public inspection, unlike those of its parent corporation, RFI, which is a public foundation. Thus, the investment corporation may enable the Rajneeshees to keep details of certain financial transactions confidential, particularly some reportedly large transfers of cash from RSI in London.

Second, by mortgaging all of its real property holdings to a corporation in England, RIC may have made these assets invulnerable to court judgments against them in America. The sealing off of other special assets such as the Rolls-Royces in RIC controlled trusts would insulate those assets from court judgments as well, legal experts say. One Portland attorney thinks that the Rajneeshees have built “a nearly impregnable wall of protection for their assets.”

These experts say that the legal function of the RFI, the center or head of this financial octopus, is obvious: by virtue of its being a nonprofit church, RFI does not have to pay taxes on its considerable income.

—Oregon Magazine, November 1984

This article was adapted from The Rajneesh Chronicles, published by Tin House Books.