Group gathers both acolytes, doubters

NXIVM, which says its training empowers students, hopes to build Halfmoon facility

TimesUnion.com/August 28, 2003
By Dennis Yusko

Hague -- More than 300 students from around the world are in the Adirondacks this week to celebrate "Vanguard Week," the birthday of Keith Raniere, a self-described philosopher and entrepreneur.

During courses run by his personal training company, NXIVM, students wear special scarves and bow to both Raniere, whom they know as "Vanguard," and the company president, Nancy Salzman, or "Prefect." Both Raniere and Salzman live in Clifton Park.

Though laid-back in appearance, the sessions on the shore of Lake George provide a rare glimpse into the controversial group.

Raniere, who turned 43 on Tuesday, wants to build a 67,000-square-foot headquarters for NXIVM's Executive Success Programs off Woodin Road in Halfmoon. More than 100 Halfmoon residents have signed a petition urging the town to deny 5-year-old NXIVM, known as ESP, building rights.

Salzman maintained that the opponents are wrong about the proposed headquarters, which she said would increase property values and help the community. She also said they're wrong to be concerned about NXIVM.

The group's self-awareness seminars employ a mathematical system called rational inquiry created by Raniere, Salzman said.

"It's an empowerment tool," Salzman said Tuesday in an interview at the Silver Bay Association YMCA Christian Conference and Training Center on Lake George.

But far away from the peaceful landscapes of Warren County, former members and critics charge that ESP, is a secretive, "cultlike" enterprise. In federal court papers, they allege the programs have torn apart families, intimidated detractors through lawsuits and controlled the minds of students.

"Rational inquiry -- their technology -- is essentially a philosophy that draws from many other large group-awareness programs like Scientology," said social movement commentator Rick Ross of New Jersey. "It's a belief system. When you become an 'Espian,' you adopt Keith Raniere's philosophy."

Court papers say NXIVM students wear different colored scarves, or sashes, to identify their rank; must bow to Salzman and Raniere before and after each meeting; and are paid commissions if they bring in recruits.

The information is detailed by Stephanie Franco of Deal, N.J., in response to a $9.7 million federal lawsuit ESP filed against her and others on Aug. 6.

Salzman said bowing is a traditional way of showing respect, and compared the scarves to belts worn in martial arts.

"It's just a normal business," said Salzman, 49, who called Raniere her mentor.

The suit names Franco, Ross, The Cult Education Institute and California psychiatrist John Hochman as defendants. It claims Hochman and Ross falsely characterized ESP as a cult on Ross' Web site and that Franco publicized a confidential manual.

The suit seeks to force Ross to remove any mention of ESP from his Web site and demands the return of all ESP manuals while seeking compensatory damages of more than $2.4 million and punitive damages of nearly $7.3 million.

Besides Ross, no others involved in the lawsuit would agree to be interviewed about the case.

District Court Judge Thomas J. McAvoy denied the request for a temporary restraining order against Ross. The case is scheduled to be heard on Sept. 8 in federal court in Albany.

In Franco's legal response, she said she attended a seminar to better understand why her brother, Michael Sutton, was attending the classes religiously. In 2001, she paid $7,500 to participate in 16 10-hour ESP "intensives" at the group's offices, 455 New Karner Road, Colonie.

According to court papers, she came away believing that the group was "attempting to control and manipulate me and my family members."

Salzman maintained ESP teaches people to make their own decisions. "I don't think we're cultlike," she said. "We are anything but a cult."

Vanguard Week, which ends today, "is a celebration of the human potential to live a noble existence and to participate in a joyous interdependent civilization," Raniere wrote on NXIVM's Web site. Participants paid $530 for four days of recreation and nightly forums, according to the Web site.

"They come of their own free will," Salzman said. The interview was videotaped by ESP employees; Salzman said she and Raniere tape everything they say to protect themselves from misrepresentation.

Raniere is no stranger to controversy. In the mid-1990s, his company, Consumers Buyline, ceased operations in the wake of dozens of state and federal investigations that alleged it was a pyramid scheme. The company settled with New York state for $40,000 but admitted no wrongdoing. Raniere also is prohibited from running chain distribution schemes, according to State Attorney General Eliot Spitzer's office.

Salzman, who says Raniere settled because it would have been too expensive to fight the allegations, said she was introduced to Raniere and his philosophy six years ago. For more than 20 years, she said, she had studied personal motivation and development.

"I couldn't find anything close to it," she said of ESP.

Neither could Kristin Keeffe, 33, of Clifton Park, who started the courses while working as a bartender. She now works as a legal aide and researcher for NXIVM. "I had a complete, radical shift in career and capacity almost overnight," Keeffe said. "It improved my memory and logic dramatically."

NXIVM is an international, multimillion-dollar-a-year business with more than 3,700 customers worldwide, said one of Raniere's attorneys, Arlen Olsen of Latham. Several wealthy professionals, including Sheila Johnson of Black Entertainment Television and a former first lady of Mexico, have taken ESP classes, according to NXIVM lawyers.

Olsen said ESP has copyrights on materials developed by Raniere.

Raniere did not make himself available for an interview, but through his attorney he said that "NXIVM does not claim to be a religious organization, nor do I claim to be a spiritual leader of a religious organization."

He is, however, tenacious in court.

According to court papers, Raniere tried unsuccessfully to have the bankruptcy filing of Toni Natalie dismissed in U.S. Bankruptcy Court in the Northern District of New York. Court papers describe Natalie as Raniere's ex-girlfriend and former business partner.

"I've never seen a creditor pursue a debtor as aggressively as this creditor has," said Christian Dribusch, Natalie's attorney.

In 2001, Raniere objected to the discharge of Natalie's debts on the grounds that she falsified representations in her petition, and concealed and transferred assets out of the bankruptcy estate that would have satisfied debts.

U.S. District Court Judge Robert Littlefield Jr. dismissed Raniere's claims on Jan. 7, but the case shows the depth of hard feelings between Raniere and his former girlfriend.

Natalie testified that Raniere's influence over her caused her to surrender her adopted son to her ex-husband, a statement that Raniere did not argue in court, according to case documents.

Natalie's mother, Joan Schneier, also testified that Raniere harassed and threatened her, Natalie and her family on the phone, papers show.

Salzman, however, said complaints about harassment by ESP members and family troubles caused by the group are untrue.

"We have story upon story about families we have made better," she said.