NXIVM’s plans for a facility in Halfmoon at center of controversy
Times Union, Aug. 8, 2003
By DENNIS YUSKO, Staff writer
The group that wants to build a controversial personal training center in Halfmoon has filed a $10 million federal lawsuit against its detractors, claiming they falsely characterized it as a cult and publicized its confidential manual.
The NXIVM Corp., also known as Executive Success Programs, filed the $9.7 million civil suit Wednesday in U.S. District Court, naming as defendants The Ross Institute of New Jersey; its executive director, Rick Ross; California psychiatrist John Hochman; and Stephanie Franco, a former ESP student.
ESP was founded by Keith Raniere of Clifton Park in 1998 to instruct people on “how to maximize their potential in all fields of human experience.” His application to build a 66,900-square-foot headquarters in Halfmoon’s Woodin Road area is opposed by residents there.
The lawsuit alleges that Franco delivered an ESP manual to Ross, though she signed a confidentiality agreement promising not to disseminate it. It accuses Ross and Hochman of causing irreparable harm to the company through Web site postings that describe the programs as dangerous and an expensive form of brainwashing. Franco could not be reached for comment.
“He’s a fellow with a Web site who was paid to put out disparaging statements about this business,” said ESP’s attorney, Kevin A. Luibrand. “He’s never spoken to them. His statements have been false, and we plan to aggressively and immediately correct the damage that’s being caused.”
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“Individuals have refused to associate their names with plaintiffs as a direct result of the dissemination of the false information,” the suit reads. “The townspeople where plaintiffs are seeking approval for their new building have contacted the town Planning Board citing to defendants’ Web sites and characterizing plaintiffs as a cult.”
The suit seeks to make Ross remove any mention of ESP from his Web site; to stop all defendants from “utilizing, displaying, relaying, describing, explaining, characterizing, disseminating and/or commenting” on ESP; and to have all ESP manuals and other communications in possession of the defendants returned; as well as compensatory damages of more than $2.4 million and punitive damages of nearly $7.3 million, according to papers filed with the court.
Luibrand said Raniere is not commenting on the litigation.
U.S. District Judge Thomas J. McAvoy is scheduled to take up the case in federal court in Binghamton on Aug. 22, said Luibrand, an Albany attorney with Tobin and Dempf.
Ross, who often speaks publicly about cults, controversial groups and movements, dismissed the complaint.
“I would regard it as a frivolous ‘slap’ suit. I would suspect it would be dismissed. This is a typical strategy that’s often used by controversial groups to silence and intimidate people,” Ross said, adding that he has received an ESP manual from a former associate of the group.
ESP, with a staff of more than 300, trains business managers and chief executives in the United States and Mexico to reach the highest level of their potential, Luibrand said. It has operated for years at 455 New Karner Road.
Many wealthy professionals, including Sheila Johnson of the Black Entertainment Network and a former first lady of Mexico have taken classes, Luibrand said.
Luibrand challenged Ross’s credibility, noting that in 1975 he pleaded guilty to conspiracy to commit grand theft for embezzlement of property from a jewelry company where a friend worked.
“I regret what I did in my youth. I admitted my wrongdoing and restored everything to those who lost something,” Ross said of the case.
He and Hochman believe ESP is a recycled form of other controversial self-help programs such as Scientology and EST. They say the classes cost thousands of dollars, and that members are hounded to return.
In the early 1990s, state Attorney General Robert Abrams prohibited Raniere from running chain distribution businesses after his former company, Consumers Buyline, collapsed under dozens of state and federal investigations alleging that it was a pyramid scheme. The company settled with attorney general’s office for $40,000 but admitted no wrongdoing.
Raniere is now called “Vanguard” by ESP students, Ross and others have said. Students are rewarded with free classes if they find new members, they said.
“It is a kingdom of sorts, ruled by a Vanguard, who writes his own dictionary of the English language, has his own moral code and the ability to generate taxes on subjects by having them participate in his seminars. It is a kingdom with no physical borders, but with psychological borders — influencing how his subjects spend their time, socialize, and think,” Hochman, a clinical professor of psychiatry and biobehavioral sciences at the University of California of Los Angeles, wrote on Ross’s Web site.
ESP’s plan to build a major new headquarters in Halfmoon has caused friction with neighbors such as John Quinn, 38, a resident of Woodin Road. He said ESP members recently threatened to turn his driveway into “a mud path through the woods” if he didn’t stop causing problems for the group. Quinn and his wife, Tammy, have collected more than 100 signatures on petitions opposing the proposed NXIVM center.
The Quinns confronted about 100 to 150 ESP members during a recent unauthorized ground-breaking.
“They all have that monotone voice. They were dressed up in business suits, fancy dresses. One person there was in a wedding dress. They told us it was their property and they’d do as they please,” Tammy Quinn said.
“I don’t want them anywhere in the area, not even in the Capital Region,” John Quinn said.
Luibrand, however, said NXIVM would one day be a permanent part of the area.
“They’re building a center up here, whether it’s there or elsewhere, we’re building a center,” he said.