Perhaps the most controversial question raised on my ATG web site is the relationship of the company to the Church of Scientology. This is discussed in some detail below, but I would like to state here that I have no evidence that ATG is under the influence of the Church of Scientology the way TradeNet was. According to Mr. Collins, ATG was never a member of WISE (World Institute of Scientology Enterprises), and does not use Scientology "management tech". Based on the information Mr. Collins provided, I believe that no current members of ATG's board and none of ATG's current officers (Vice President or higher) are members of the cult. As of September 1998, three lower-level employees are known to be members, out of 55 employees total. Scientology does play a part in ATG's history, as you will see.
Mr. John Collins objects to being asked what his religious beliefs are; he has made it clear that he was answering my questions on this subject only to demonstrate that I was being given wrong information. He also asked me to include an exact quote from him, which I have agreed to do:
While it is true that I was not a member of the Church of Scientology, while at ATG I had no concern about a person's religious beliefs, their race, colour or sexual inclination. I do not agree with the enmity being shown towards members of the Scientology religion by Dr. Touretzky, however I equally recognise his right to hold his beliefs.The information below is mainly a reorganized presentation of the content of tbe initial interview and subsequent email exchanges. In other words, it reports Mr. Collins' point of view, with commentary and additions from me. I am not able to verify the accuracy of all of the statements made here, since I don't have access to all the persons and confidential documents at Mr. Collins' disposal. However, I have no reason to disbelieve Mr. Collins on any of the points covered, except with regard to the relationship between ATG and the Oregon Attorney General's office, which I will discuss below.
-- Dave Touretzky
Collins got ATG started on its new course by purchasing technologies from Bob Carroll. Carroll was a Scientologist, and his company, B.W.N. Group, had 7-8 employees, many of whom were Scientologists. ATG acquired all of Carroll's employees, and Carroll himself served as the company's first chairman. Hence, for a brief period, almost all of ATG's employees were Scientologists. But the relationship with Carroll lasted only a few months. When it was clear that it would not work out, Carroll resigned, leaving 7 of his employees behind. Several of them subsequently left the company, but a few remain.
Bob Carroll's brother Noel, who lives in London, was sponsoring the work of a physicist, Dr. Shui-Yin Lo, on a device called a BASER, short for "Boson Laser". Noel and Yin jointly owned a company, Apricot SA, which held patents on the BASER. As part of the deal where ATG acquired BWN's technologies, Collins was also asked to take over the BASER, which he agreed to do. Lo, who was not a Scientologist, joined ATG as its Director of Research and Development. Lo then invented IE crystals, which have become a key "technology" for the company. Collins describes Lo as "brilliant".
At one point in the early days of ATG, several employees tried to interest Collins in Scientology "management technology". But when Collins wasn't interested in pursuing that, the matter was dropped. According to him, ATG did not have a Scientology atmosphere to it; no one was pushing any particular belief system. Religion was regarded as a personal matter and not commonly discussed.
According to Collins, TradeNet had been distributing a Japanese laundry disk containing ceramic and metal components that supposedly altered the physical properties of water, making detergent unnecessary. When the Japanese manufacturer of the disk decided to pursue other distribution arrangements, TradeNet began manufacturing a competing product. They purchased a "structured water" solution from Rod Quinn and Michael Ainsley of Aqueous Labs, and paid a company in New York to put this into sealed plastic globes. The result was marketed in 1996 as the Laundry Solution. "Structured water" is pseudo-scientific nonsense. What Aqueous Labs was actually selling was ordinary water with blue dye. (Collins says Quinn was pulling this scam with 5-6 different companies, marketing competing laundry products, and that Quinn was eventually fined in Nevada.) Attorneys General in several states began investigating TradeNet for consumer fraud. Oregon had the balls analyzed by professor of chemistry Dennis Barnum at Portland State University, who found they contained just colored water.
ATG started talking to TradeNet in April 1997 about developing a new laundry product for them. At the time, the Oregon fraud investigation was already under way, but Collins says ATG was not aware of that, and would not have begun a relationship with TradeNet if they'd known about it. He adds that Oregon was only one of the states investigating TradeNet for fraud; eventually, so were Utah, Michigan, California, Florida, and Nevada.
ATG had already developed its own laundry product by adding IE crystals to an enzyme-based laundry detergent. The crystals supposedly enhance detergent effectiveness by lowering the surface tension of the laundry water. (See the work by Professor Mary Lidstrom of the University of Washington in on IE crystal effects on enzymes, reported in the IE Symposium proceedings from December 1997. Lidstrom's results were minimal, and possibly due to experimental error or contaminants in the samples, but the fact that ATG was funding her experiments does demonstrate the company's interest in this area.)
As part of their work, ATG examined 15 different laundry ball/disk/ring products. They found that none of them worked except the Japanese one that TradeNet had been marketing. That product was a disk with an open mesh that water could flow through. The disks weigh less than an ounce, so they cannot be cleaning clothes by mechanical agitation. Some of the larger, heavier laundry disk products, although marketed with bogus scientific claims, do manage to perform slightly better than plain water as a result of the agitation effect; throwing a sneaker in with the laundry load will produce the same result. They do not perform well enough to substitute for detergent.
ATG soon became aware of the fraud charges against TradeNet. In an interview in the Oregon Statesman Journal published on May 10, 1997, Collins denounced the Laundry Solution as "an absolute scam". He also announced in that interview that ATG was developing a replacement laundry ball for TradeNet that would be used in conjunction with an enzyme-based detergent. The article reported Collins promising that the new product wouldn't be released without scientific peer review. But in a fax sent to me on October 22, 1998, Collins explained that what he meant by this was peer review of the basic IE crystal research ATG was doing. He felt the publication of papers describing IE crystals, such as Lo's two articles in Modern Physics Letters that appeared in 1996, constituted adequate review for ATG to proceed with TradeNet.
TradeNet also became a marketer of The Force, ATG's automobile combustion enhancement product that was also based on IE crystals. They purchased inventory and promotional materials from ATG and started distributing The Force in July. In addition, TradeNet invested $100,000 in ATG so that the company could purchase state of the art equiment needed for conducting ASTM (American Society for Testing and Materials) tests of laundry products. Erwin Annau wanted something in return for this investment, so he was issued shares of ATG stock. Collins says it was only about 30,000 shares, not a significant stake.
After Collins was quoted in the Statesman Journal, the Oregon Attorney General's office contacted ATG. This was in late May/early June 1997. Both Collins and ATG's legal counsel, John Dab, had informal telephone conversations with assistant attorney general Robert Roth. They explained to Roth that the Laundry Globe product TradeNet was selling was not ATG's, but the company was developing a replacement for it. They also mentioned that their own tests of the Laundry Globe showed there were no "structures" induced in the laundry water, no infrared radiation or electric charge, and that the globe did not reduce the surface tension of water. The tone of these conversations was friendly; ATG stated it would be happy to supply information on the new product it was creating should Oregon request it in the future.
By July ATG was ready with the replacement laundry product, called the Super Globe. It was a plastic globe in two halves. One half was open, allowing laundry water to flow through it as in the Japanese product. It contained a mixture of components, including beads, copper, and brass; the makeup was based on ATG's analysis of the Japanese disk. The other half of the globe was sealed, and contained IE water. Collins says TradeNet wanted a globe-type product, so they gave them a globe, but ATG insisted that it be marketed only in conjunction with the IE-based detergent, described somewhat misleadingly as a "booster" solution.
Even if IE crystals do exist, and can reduce the surface tension of water, it makes no sense to think that they will work their magic when encased inside a plastic globe where they can have no contact with the laundry water. ATG was relying on the IE crystals added to the detergent to do that. In response to a query from Collins, another person at ATG explained that "the IE crystals inside the globe were there at TradeNet's request to sustain the heritage of their product."
Nonetheless, Collins claims ATG's tests showed the crystals inside the globe did have an effect on laundry water. He also says that independent labs confirmed that the Super Globe reduced the surface tension of water. Personally, I do not believe that the solution sealed inside the globe could have such an effect. Neither does Andrew Blackwood of Structure Probe, or any of the other scientists who've looked at the Super Globe. It is possible that some chemical interaction with the metal or ceramic materials in the open half of the globe did result in a slight reduction of surface tension, which would explain the independent lab results, but I would want to see the actual laboratory data and the exact composition of these materials before accepting even this claim. I believe that ATG put the IE crystals into the globe because TradeNet wanted a new brand of magic water to feed their marketing hype, now that Aqueous Labs' "structured water" had been revealed as a fraud.
To enable TradeNet to make the Super Globe, ATG told them where to obtain the beads, copper, and brass, and found a company in Orange County, California to do the assembly for them. ATG supplied the IE water. In July 1997, TradeNet began marketing the Super Globe, surrounded by lots of hype about IE crystals, direct quotes from Shui-Yin Lo, and even a picture of Lo in his laboratory.
But even as the Super Globe made its debut, things were already going sour with TradeNet. The company was behind on payments to ATG for shipments of The Force and associated marketing materials, including videos, hats, promotional literature, and banners. Collins visited TradeNet in July or August to get a firsthand look at the operation; he was not happy with what he found. In August various letters were sent demanding payment of past-due amounts, but no funds were forthcoming. These letters were written by Michael Kobrin, a Scientologist who had joined the company a few years earlier when ATG acquired Final Frontier from B.W.N. Group and renamed it ATG Media.
The other thing Collins says he didn't know about TradeNet when he began dealings with them in March or April of 1997 was that the company was run by Scientologists. However, by August he was well aware of that fact. On August 14, when TradeNet was seriously behind in its bills, Collins sent a letter to Lynn Irons written in Scientology-speak, referring to such things as "applying the ethics gradient with other Church members", and "flowing power" to TradeNet's owners. David Gann, ATG's Director of Marketing and himself a Scientologist. had been highly critical of TradeNet and its management; he felt that they were misleading their distributors and engaging in unethical behavior. With this letter, Collins was announcing that he had taken Gann out of the loop. He had picked up the language over the years from his Scientology employees. At his request, David Gann checked the letter over to make sure he got the phraseology right. When asked why he would want to employ such language in his correspondence, Collins said it was because he wanted to be sure the TradeNet folks understood him properly.
Two days later, on August 16, 1997, TradeNet president Bill Cooper held a board meeting attended by Erwin Annau, Alberto and Lily Guerrero, Jennifer Kemp, and consultants Lynn Irons and Brian Andrus. At this meeting, Cooper quoted Collins as chastising him because "100,000 people out there know you're Scientologists." In speaking with me, Collins described Cooper as "a used car salesman", and said that in quoting him to the TradeNet board, Cooper had omitted the crucial sentence that followed: "You are supposed to be more ethical than this.".
Collins didn't know the background of the people he was dealing with. He said Erwin Annau "came across as a crook", but he was not aware that Annau had fled to the US to avoid legal problems in Austria. And when Brian Andrus had come to see Collins as a representative of Bill Cooper, Collins had no idea that Andrus was a former member of Scientology's intelligence and dirty tricks squad, the Guardians Office. Or that Andrus had once been named an unindicted co-conspirator in United States v. Mary Sue Hubbard et al., a case in which nine Scientologists, including L. Ron Hubbard's wife, went to jail for crimes against the government. Collins thought that Lynn Irons was simply a TradeNet employee and Brian Andrus a business consultant. He did not know that Irons was a consultant affiliated with WISE (the World Institute of Scientology Enterprises.) But he could tell that something was wrong; he said Andrus "didn't come across as credible". And that Lynn Irons was lying to him when he met him. It was Collins' assessment of TradeNet that "there was very little truthful about the operation."
TradeNet sold the Super Globe for only 3-4 weeks. At a joint TradeNet/ATG press conference in Utah in August, 1997, where ATG was represented by its chief operating officer Harold Rapp, TradeNet president Bill Cooper tried to defend the original Laundry Solution globe. Rapp publicly rebuked them for it, telling the press that ATG's own tests showed the Laundry Solution didn't work. During that event, Rapp found out from several attendees that TradeNet was selling the Super Globe in Utah without the detergent "booster" that ATG had said was a mandatory component. TradeNet had previously assured ATG they would not do this. Rapp says he informed the attendees that the booster was required, and that the product would not be effective without it. The press conference was the last straw for ATG. A source close to the company says their relationship with TradeNet "was effectively severed at this event", when Rapp refused to support Cooper's position and publicly sided with the attorney general's office against TradeNet.
Subsequent to this meeting, ATG began supplying written information to Oregon and other state attorney general's offices about the tests they'd conducted on TradeNet's Laundry Globe. ATG also cut off TradeNet's supply of IE water due to their duplicity.
Collins claims that ATG was sandbagged by the Attorney General's office. He said assistant attorney general Robert Roth's approach to ATG was initially friendly, and they had a cordial relationship. When Oregon raised questions about IE crystals, ATG had a verbal understanding with Roth that they and Oregon would together negotiate a testing protocol, and that the lab at Portland State University that had done the analysis of the Laundry Solution would be examining ATG's samples. Collins planned to send one of ATG's scientists, Dr. Olga Berson, to observe the testing once details of the test had been worked out. As a prelude to that, he says ATG sent two test tubes, "one with plain [deionized] water and the other a tube with IE. The purpose was simple. We instructed Mr. Roth to shake both. One would foam up and remain foamy for a long period. The other return to its natural form rapidly. Chemically they were the same. These samples were not prepared as though they were going to be used in the ultimate test. Mr. Roth, without informing us, broke our agreement and sent these to Structure Probe, a company we had never heard of. We were not invited to participate."
One wonders at the naivete of sending two vials of liquid to an assistant attorney general with instructions to shake them and look for foam. What conclusions did ATG expect could be drawn from such an experiment, performed on materials containing any number of possible contaminants? A drop of dishwashing liquid added to the IE vial would have produced plenty of foaming action. When one is seeking to demonstrate the existence of a new physical structure for water molecules for which unusual chemical properties have been claimed, experiments on liquids of unknown origin and composition are worthless.
When Oregon received the two vials from ATG, they turned them over to a lab in West Chester, Pennsylvania, called Structure Probe, for testing. In addition, they sent Structure Probe several Super Globes, which also supposedly contained IE water. The Structure Probe report was damning. As outlined in internal memos obtained from the Attorney General's office, Structure Probe concluded that IE crystals did not exist. They also pointed out that Dr. Lo's description of the phenomenon contained logical inconsistencies and violated basic principles of physics. The TEM (transmission electron microscopy) photographs supplied by ATG did indeed contain structures, but these structures closely resembled bacteria. Furthermore, Structure Probe was able to produce similar-looking structures in water that was allowed to sit for 48 hours, but not in fresh water -- further evidence of the structures' bacterial nature.
Collins says that the Structure Probe report turned the Oregon Attorney General's office against ATG, and that Oregon refused to disclose exactly what had been sent to Structure Probe. He claims ATG was worried that their two vials may have been opened, and hence contaminated prior to delivery to Structure Probe. (I wonder how likely it is that the Attorney General's office would tamper with laboratory samples.)
At some point, someone suggested that the structures observed in ATG's electron miscroscopy photographs might be "artifacts commonly found in carbon support films", arising from the way the samples were prepared. Collins says this was Structure Probe's claim, but I can find no mention of this in the Structure Probe report. Structure Probe's claim was that the "IE structures" were bacteria. I'm not sure where the TEM artifact theory originated, but it is mentioned in an October 15, 1997 letter from Robert Roth to ATG counsel John Dab.
Collins concludes that "it is unfortunate that we were not allowed to participate in the test because we could have avoided the controversy over whether the IE is a bacteria or an artifact of the carbon film. It is not. We also would have provided them with purified water base waters, etc., etc., in fact we had considered having the chosen lab make the IE on site then conduct the test. As we know the AG'S office broke the agreement."
ATG hired another company, EMS Laboratories of Pasadena, California to examine samples of IE water using the TEM technique. At that time, ATG had not yet seen the Structure Probe report; they were proceeding based on the letters they had received from Robert Roth. EMS, like Structure Probe, is certified by the State of Oregon for scientific testing, and according to Collins, EMS created the test that Structure Probe used. Collins originally told me that EMS "refuted" Structure Probe's report, but in subsequent discussion he qualified this statement as follows: "We hired them for one reason and only one: TO DISPRPOVE THE STATEMENTS BEING MADE THAT THE IE WAS AN ARTIFACT OR OF ORGANIC ORIGIN. This [they] did. We had no intention of trying to prove the IE existed" through EMS. Collins forwarded a copy of the EMS report to me. It does show structures in the TEM photographs, and it refutes the claim that they are artifacts of the carbon suport film used to prepare the samples, since similar structures did not show up in distilled water samples EMS prepared in the same way. But EMS did not rule out the possibility that the structures might be bacterial contaminants as suggested in the Structure Probe report. They did not speculate at all as to what the "structures" in the TEM images might be.
Collins says that ATG took the EMS report to Oregon, hired a large in-state law firm, and threatened to sue the Attorney General's office if they did not back down. And, according to Collins, they did back down, and allowed ATG to sign an "Assurance of Voluntary Compliance" that held both parties mutually harmless, did not admit any wrongdoing on ATG's part, and carried only a token payment of $20,000 to reimburse Oregon for the cost of their investigation.
The internal memos from the Oregon Attorney General's office contain detailed discussions of both the Structure Probe report and the many problems with the evidence ATG supplied for the existence of IE crystals. My impression is that Mr. Collins does not adequately understand the science, and furthermore, he has only indirect knowledge of the negotiations with Oregon; ATG's correspondence with the Attorney General's office was handled by Harold Rapp, and by John Dab, ATG's legal counsel. For example, Mr. Collins was unable to address the arguments in the affidavit of Paul Engelking, professor of chemistry at Oregon State University, who said that Lo's claims about IE crystals violate basic laws of physics. Similar arguments are made in the Structure Probe report and the affidavit of Andrew Blackwood. Mr. Collins' only reponse was to state, based on his faith in Dr. Lo, that he thinks these objections will eventually be answered. He also told me that he had been unaware of the Engelking affidavit until it appeared on my web site.
On November 11, 1997, ATG signed the Assurance of Voluntary Compliance that closed the investigation into their role in the laundry globe fraud. TradeNet signed an AVC at the same time, which forbid them from marketing any products in Oregon based on unproven scientific claims, including products based on IE crystals, specifically The Force. ATG, however, was not enjoined from selling The Force.
The investigation into ATG remained open because of The Force. TradeNet and ATG had both made claims about The Force being based on IE crystal technology, and the Attorney General was pursuing these claims and corresponding with Harold Rapp about the evidence for them. Finally, in a June 8, 1998 memo, Robert Roth wrote that while the scientific evidence ATG provided for IE crystals was worthless, he recommended that "at this time, in view of the apparent absence of retail sales of "The Force" or other "IE" products in Oregon or complaints regarding such sales, these findings be placed in the file and the file closed without further expenditure of resources". It is difficult to reconcile this memo with Mr. Collins' claim that the EMS report and a threat of a lawsuit scared off the Attorney General back in November.
Collins explains his departure this way. He had been planning for some time to leave ATG in April 1998. But since ATG was about to launch its joint venture with 21st Century Global Network and Integral Health, Inc. (IHI), the board asked him if he would step down as CEO in December so that Larry Brady could manage that effort. They wanted Collins to remain as Chairman, but he decided he would rather make a complete break, so he resigned from both positions, leaving him free to move on to other ventures.
In December 1997, David Gann, one of the original Scientology employees and by then a member of the board of directors, was "removed". He no longer holds any position with ATG. Also in December, IHI issued a press release announcing its role in the joint venture with ATG, and claiming that John Collins was joining the IHI board of directors. Collins says he never had any intention of joining the IHI board; he termed the IHI press release "garbage". He agreed with me that IHI president Graham Simpson seems to be a shady character, and says he understands that 13 lawsuits have now been filed against Simpson in Nevada.
In April 1998, Erwin Annau was declared a Suppressive Person by the Church of Scientology because of the TradeNet fiasco, which brought unwanted attention to the cult and financial problems to some of its members. As a "Declared SP", Annau must be shunned by all Scientologists and cannot receive "auditing" (Scientology's quack psychotherapy) or other church services.
In June 1998, ATG announced plans to sell ATG Media to Collins for $500,000. When asked why he was buying this company, Collins replied "I want it". In addition to producing marketing materials for The Force and publishing the second edition of Force-endorser Bob Sikorsky's book, "Drive It Forever", ATG Media publishes a space magazine and sells space memorabilia, meteorites, autographed copies of space-related books, and so forth. Collins feels ATG has been neglecting the space memorabilia side of the business; his history in public relations and music publishing makes this a good company for him to run. But Mike Kobrin will not be included in the acquisition; he will remain with ATG. (Collins says Mr. Kobrin "never tried to push any religious beliefs at ATG; he seemed more Jewish than Scientologist." But he described Kobrin's wife, Scientology attack-lawyer Helena K. Kobrin, as "an interesting lady". I did not press him to elaborate.)
Collins also says ATG has spent $30 million on R&D costs. He still has faith in Dr. Lo and IE crystals. Lo reportedly didn't like the idea of going public with the IE story before he had adequate scientific proof, including computer simulations of his theory of how water molecules interact to form the crystals. But ATG felt it was necessary to go forward for commercial reasons. So ATG disclosed scientific information to TradeNet, who exploited it for their own PR purposes. But apparently ATG was also influenced by this, because some of the IE crystal hype appeared on ATG's own web site and in its press releases. Collins says the association with TradeNet was his mistake; he accepts full responsibility for the decision.
Larry Brady is running the company now. Collins disagrees with some of Brady's decisions, such as positioning IE crystals with homeopathy, relying on multi-level marketing to sell IE-based products, and going into business with Graham Simpson. But Collins is allowing Brady to do things his way.
I still believe that ATG's scientific claims are nonsense, and that some of its public statements have been fraudulent. But Mr. Collins is not directly responsible for the science, and was also apparently not responsible for the public statements with which I take issue. In October, 1998, ATG completely replaced their web site with one that makes no claims about the physics of water, although there are future plans to post laboratory test results demonstrating the effectiveness of IE solutions in particular applications. As far as I can see, the new web site avoids misleading statements about the company's technologies, which I take as a positive sign. The company is still seeking publication of its IE crystal research in a high-quality peer-reviewed journal.
Will Shui-Yin Lo succeed in his bid to rewrite some of the laws of physics? I think it's unlikely, but Mr. Collins remains hopeful on this point.
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