The Aftermath
A Former Enemy Becomes an Ally

Five days before the official announcement, Mr. Miscavige went before the Scientology gathering in Los Angeles and declared victory. In a two-hour speech, according to the account in International Scientology News, Mr. Miscavige described years of attacks against Mr. Hubbard and Scientology by the Government.

''No other group in the history of this country has ever been subject to the assault I have briefed you on tonight,'' he said, calling it ''the war to end all wars.''

As part of the settlement, Mr. Miscavige said, the I.R.S. had agreed to distribute a fact sheet describing Scientology and Mr. Hubbard. ''It is very complete and very accurate,'' Mr. Miscavige said. ''Now, how do I know? We wrote it! And the I.R.S. will be sending it out to every government in the world.''

Mr. Feffer, Ms. Yingling and Thomas C. Spring, another of the church's tax lawyers, appeared in formal attire on stage that night and received Waterford crystal trophies in recognition of their efforts.

Mr. Miscavige called the agreement a peace treaty that would mark the biggest expansion in Scientology history.

The church immediately began citing the I.R.S. decision in its efforts to win acceptance from other governments and silence critics. But the biggest public relations benefit may have come from the American Government itself.

Four months after the exemptions were granted, the State Department released its influential human rights report for 1993, a litany of the countries that abuse their citizens. For the first time, the report contained a paragraph noting that Scientologists had complained of harassment and discrimination in Germany. The matter was mentioned briefly in the 1994 and 1995 reports, too.

Throughout those years, the dispute between Scientologists and the German Government escalated. In an intense publicity campaign that included advertisements in this newspaper, the church said that businesses owned by Scientologists had been boycotted and that its members had been excluded from political parties and denied access to public schools. The church asserted that the German actions paralleled the early Nazi persecution of Jews.

The German Government responded that Scientology was not a church worthy of tax exemption, but a commercial enterprise -- the very position the I.R.S. had maintained in its 25-year war against the church. German officials said equating the treatment of Scientologists with that of Jews under the Nazi regime was a distortion and an insult to victims of the Holocaust, a view supported by some Jewish leaders in Germany.
The dispute turned into a diplomatic ruckus in January when the State Department released its 1996 human rights report, with an expanded section on Scientology that said German scrutiny of the religion had increased. Artists had been prevented from performing because of their membership in the church and the youth wing of the governing Christian Democratic Union had urged a boycott of the film ''Mission: Impossible'' because its star, Tom Cruise, is a prominent Scientologist, the State Department said.

German officials were angered by the criticism, and Foreign Minister Klaus Kinkel raised the matter with Secretary of State Madeleine K. Albright when she was in Bonn on Feb. 18. Ms. Albright told him that the issue was a subject for bilateral discussions, but she said she found claims by Scientologists that they are the victims of Nazi-style persecution ''distasteful.''

Nicholas Burns, the State Department spokesman, said that, despite the belief that Scientologists had gone too far in drawing comparisons to persecution of Jews, the department had felt compelled to expand on the church's troubles with the Germans in its latest human rights report.

''The Germans are quite adamant, based on their own history, that these are the kinds of groups that ought to be outlawed,'' Mr. Burns said. ''However, for our purposes, we classify Scientology as a religion because they were granted tax-exempt status by the American Government.''

Correction: March 11, 1997, Tuesday
An article on Sunday about the Church of Scientology referred incorrectly in some editions to the settlement of a libel case brought by a Scientologist against Time magazine and Richard Behar, an investigative reporter. The settlement entailed the publication of a clarifying statement in Time, not a corrective paragraph.