Unforeseen troubles strike the A.R.E.

The Virginian-Pilot/July 5, 2001
By Tim McGlone

Edgar Cayce's followers say he predicted World War II, stock market crashes, a presidential assassination and even, in 1932, the growth of Virginia Beach as one of the largest resort cities on the East Coast. But his 14,000 "readings" never prophesied the turmoil that now grips the international organization he founded 70 years ago on the Oceanfront. The Association for Research and Enlightenment, Cayce's nonprofit center for holistic healing and spiritual guidance, is sinking, according to some current and former members. It has lost nearly 80,000 members in the past 10 years and $4.5 million in the past two.

Hemorrhaging money and members, A.R.E. now faces a multimillion-dollar lawsuit by former leaders who were accused of trying to transform the ecumenical organization into a hotbed of Christian fundamentalism. Analysts say the organization won't survive much longer at that rate. Officials of the institute, led by the late founder's grandson, said there's nothing to worry about. Reforms are in place to reduce expenses and boost revenue. Years of deficit spending will be turned around.

"We've been faced with these things for 10 years. We made lots of changes in the past year to run a more responsive organization," said Harvey Green of Hawaii, a 35-year A.R.E. member and chairman of its board of trustees. The lawsuit, meanwhile, is symbolic of the ongoing internal struggle over the direction A.R.E. should take in the new millennium. Some believe it should become more spiritual. Others think holistic medicine should be the priority, and still others believe psychic and ESP avenues should be pursued. A.R.E. reached a zenith in the late 1980s at the height of the New Age movement. Actress Shirley MacLaine's books on reincarnation and meditation were bestsellers, aging baby boomers sought yoga and meditation and A.R.E. membership neared 100,000.

Cayce followers flocked to Virginia Beach for holistic remedies, dream interpretation, spiritual growth, astrology readings and to explore the more far-out principles of ESP, clairvoyance and past life regressions. A.R.E. also offered more mainstream programs, such as a youth camp, prisoner outreach and a school for massage therapy, programs still in place today. A.R.E.'s programs were inspired by Cayce's work. For 43 years, Cayce, who died in 1945, slipped into a trance-like state 14,000 times, giving medical advice, offering cures, reliving past lives and predicting events far into the future. He claims to have been able to memorize textbooks by sleeping on them.

Cayce's readings are based on the Akashic Records, also known as the Book of Life, a mystical repository of every piece of information on every human who ever lived and every event that has ever taken place. He is said to have tapped into this record during his trances. Kirk Nelson of Virginia Beach has been an Edgar Cayce student for more than 20 years. He has written several books, including one on the prophesied second coming of Jesus. Typical of many A.R.E. members, he believes in the healing qualities of herbs and nutritional supplements that Cayce emphasized in his readings.

"Cayce said anyone who ate three almonds a day would never get cancer," Nelson said. "When my mother was alive, she made my father eat three almonds every day. After she died, he stopped eating them," he said. His father's PSA -- a chemical warning sign of prostate cancer -- skyrocketed. "He told me this and I yelled at him, `What's wrong with you?' It's so simple," Nelson said. Three months later, after his father resumed his daily almond intake, his PSA test was normal again.

Similar stories are touted regularly by officials at A.R.E. Photos of people who have been healed using Cayce methods and Cayce Care products hang on the walls at A.R.E. headquarters at 67th Street and Pacific Avenue. The headquarters' bookstore is filled with Cayce's nutritional and meditative treatments for nearly every disease, including breast cancer, Alzheimer's and muscular dystrophy. But A.R.E. and Cayce have been criticized through the years by people seeking to debunk his work. In his book "Flim Flam," James Randi of Fort Lauderdale, Fla., contends that Cayce simply wrote out his dreams and knew what illnesses afflicted people before he "predicted" the problem.

"There was never any evidence he was in a trance. Some people said he was snoring," said Randi, who has a standing $1 million offer to anyone who can prove psychic, supernatural or paranormal behavior. He and others also criticized Cayce's predictions that the second coming of Christ would occur in 1998 and that the Earth's polar caps would swap places by 2000, causing earthquakes and volcanic eruptions around the globe. Cayce followers say these predictions are being misinterpreted.

David C. Lane, a philosophy and sociology professor at Mount San Antonio College in California, teaches a course on critical thinking and has explored Cayce's work. He, too, argues that Cayce's supposed psychic abilities don't hold up. But, he added, there generally is no harm in his followers seeking meaning, happiness and health in their lives. "It's not like Jim Jones," he said of the cult leader who led a mass suicide at his camp in Guyana in 1978. "It's been more open-ended than these other groups." As the New Age movement waned through the 1990s, so did A.R.E.'s membership. Lane and others believe that thousands who joined during the 1980s grew to doubt Cayce's work. A.R.E. officials have a different explanation.

Kevin J. Todeschi, a senior manager, said the 100,000 membership figure is misleading. After accounting for thousands who joined through a one-time direct mail campaign and subscription offer, the core membership was more accurately about 30,000, he said. Today, membership stands at 21,353, according to A.R.E.'s latest figures. A.R.E. also was hit hard financially in 1999 when contributions dropped from $2.4 million to just more than $1 million, federal tax records show. Book sales have slipped, investments tanked with the slumping stock market, and the number of visitors to A.R.E. headquarters and its gift shop is half what it was five years ago, according to tax returns and A.R.E. records.

The organization lost $1.8 million in 1999 and another $2.7 million last year, despite a 20 percent increase in dues. Some blame the higher dues for driving away members. With annual budgets between $7 million and $8 million in the past few years, A.R.E. can't survive long in such a decline, according to Daniel Borochoff, president of the American Institute for Philanthropy, a charity watchdog. A.R.E. had to tap into its reserves to make up for the losses and prepare for future deficits. As a result, net assets dropped from $11.5 million at the end of 1998 to $8.4 million at the end of 2000. The assets include the property at 67th and Pacific, assessed at about $3.5 million.

A.R.E.'s board presented the grim budget news to members during a mid-June annual congress in Virginia Beach. Staff already has been cut through attrition and by replacing employees with volunteers. If finances don't improve, program cuts will be next, the board said. In another cost-cutting move, A.R.E. will move its Atlantic University, which offers a master's degree in transpersonal studies, from Little Neck Road to the headquarters. The 2001 budget has already factored in a $600,000 deficit, but board members said they plan to balance the budget and increase membership by next year.

"Of course, the board is not real pleased with the losses," said Green, the chairman. "We review all of the financial information, but we look toward management to come up with plans to reverse it." Green said a massive marketing and letter-writing campaign is under way and the three-tiered membership structure -- $48, $72 and $2,400 for a life membership -- will be converted to a single-level membership fee. The new fee has not yet been set. A.R.E. hopes to have 23,500 members by the end of the year and 50,000 in three years.

Adding to the troubles are disgruntled long-time members who believe A.R.E. has lost its direction and is failing to communicate with them. Charles Thomas Cayce, Edgar's grandson and A.R.E.'s executive director, has been the central target of the complaints. "CT Cayce has an aura of fame that blinds most people, especially members," said Jean-Jacques Surbeck of California, who started an Internet chat room called WhitherARE.

"Because he bears the name Cayce, they cannot shake the idea that he must be a replica of his grandfather. That makes it very difficult for members like me and a few others who wish to cast a more critical eye, not so much on the individual per se, but simply on his performance," he said. Cayce failed to show up for a recent scheduled interview with a reporter. A.R.E.'s lawyer said it was because he had a doctor appointment. Seeing trouble ahead, the A.R.E. board of trustees brought in a new management team in 1999. Gerald L. Martin and Michael L. Dempsey were named the executive directors. They formed an alliance with employees Ronald B. Smith, a legal analyst; Robert V. Phelps, a program manager; and Nancy A. Young, A.R.E.'s human resources manager.

They proposed sweeping changes, including rewriting A.R.E.'s mission statement to focus more on Christ. They wanted to cut wasteful spending, increase marketing and create a long-term plan. Upon studying the finances, they said they found that money was being lost on conferences, mainly because too many people were attending for free. Books and supplies were given away as well, they said. There also were wasteful trips, they said, including a Disney World visit one staff member tacked on during a staff cruise.

They recommended belt tightening and boosting what has been successful, like the massage school and the Cayce Care products. But quickly, there was dissension among the ranks. Staff morale plummeted and instead of turning around the organization, financial losses grew and membership continued sinking. Within a year, the board fired Martin and Dempsey and the others were forced out, according to their lawyer. The five are suing A.R.E., claiming they were wrongfully terminated and defamed on WhitherARE, Surbeck's Internet chat room that has been airing A.R.E.'s dirty laundry since May 2000.

Martin, Dempsey and the three other former employees claim that Surbeck led the charge to have them fired, in part because of their religious beliefs. According to postings on WhitherARE, Martin and Dempsey were accused of trying to turn A.R.E. into a fundamentalist Christian organization. "There was a feeling that they were pushing a heavy Christian agenda down everyone's throats," said K. Paul Johnson, an author and A.R.E. member from South Boston, Va. What turned many members against Dempsey and Martin began with their proposal for a new mission statement, which began: "To be a Christ-centered. . . " and included frequent references to God, Jesus and Christ. "That's what we're all about," said Phelps, who said he was forced out after Dempsey and Martin were fired.

The current mission statement has no references to Jesus or Christ. According to the suit filed June 1 in state court, Surbeck, Todeschi, Green, board member Max Preston and employee Kieth VonderOhe accused the five of burning books, using Gestapo tactics, calling them Jesus freaks and comparing them to the Mafia and Satan. Each of the five is seeking $3.5 million in the lawsuit. Dempsey was hired in March 1998 and was promoted to executive director with Martin, when he was hired a year later. They said their objective was to turn around a "sinking ship." They were fired, they say, because management didn't like what they had to say.

"There were some people there who felt the status quo was threatened," Dempsey said. A.R.E. officials blame Dempsey and Martin for financial losses during their tenure and for ruining morale. They point to a $600,000 publicity campaign that failed to attract new members. "They failed from the first to establish trust between them and the managers and staff, and the inability to do so has caused a crisis of confidence and morale for our organization," according to a July 2000 board resolution approved when the two were fired. Martin, Phelps, Smith and Young now run a Christian organization called Preparing the Way, whose motto is "Building a closer relationship with God through Christ."

A.R.E. officials declined to comment on the suit but the organization's lawyer said the federal Equal Employment Opportunity Commission has rejected a discrimination claim. Meanwhile, A.R.E.'s mission and direction continue to be hotly debated. "We're still talking about `the work,' and most of us still don't know what it means," Surbeck said.