THE DEMON’S GRIP“Nobody wants to be raped.”That’s the message from RogerGirard, the leader of a localgroup therapy session for menwho have been sexually abused.The clinic is one of just a few inthe whole country.

I N F L O R I D I A N , 1 F

TECH BUSTSHAKES UP LISTThe shooting stars of years pastare the shot-up stars of this year’sTimes’ ranking of the bay area’spublic companies. Last year’s No. 1 tumbled all the way to No. 25. The new leader: insuranceagency Brown & Brown Inc.

I N B U S I N E S S , 1 H

SUNDAY, June 2, 2002

Florida’s Best Newspaper

$1

*

Times photos –SCOTT KEELER

Bryan Zwan designed some of the architectural features in Digital Lightwave’s $19-million headquarters.A big player in fiber-optic testing, the company has a 36 percent market share in the United States.

Months ofinterviews andthousands ofpages of courtpapers showthe effect thatinfluentialchurchmembers hadon aClearwatercompany thatwas a darlingof the dot-comboom.

STORY BY DEBORAH O’NEIL AND JEFF HARRINGTON ■ OF THE TIMES STAFF

Bryan Zwanfounded DigitalLightwave andis now itschairman, CEOand president.He has donatedmillions ofdollars toScientology butsays the churchhas no connections tothe company.

t was New Year’s Eve 1997when Digital Lightwave’s chief,Bryan Zwan, made his biggestdeal: a $9-million contract forhis signature product, a 10-

pound device that tests telephonelines.

At 5:30 p.m., Zwan phoned hisproduction staff and gave them atall order: Ship the 308 units rightaway. It would help prop up dismalsales numbers.

But his overtaxed workers —they had put in 100-hour weeksduring the holidays — didn’t haveenough time or materials.

As the night wore on, the crewsent incomplete and unassembledunits to a shipping warehouse, giv-ing the impression the order wasfilled. Digital had done this before.The company even had shippedunits to salesmen’s homes for stor-age and booked them as sales.

A manufacturing managernamed Chuck Anderson becamefed up. Most company whistle-blowers typically alert the Securi-

ties and Exchange Commission topossible wrongdoing. But Ander-son reported the trouble to hisown higher authority: the Churchof Scientology.

He wrote a “knowledge report,”addressed to church leaders, warn-ing that the New Year’s Eve ship-ments were the latest in a trou-bling pattern in Digital that couldcreate a “huge potential flap” forScientology.

“What happens if someone goesto the newspapers, the investors,the SEC?” Anderson, a Scientolo-gist, wrote in his report.

“Not to mention putting Scientol-ogy and Scientologists at risk.”

Zwan, a longtime Scientologistwho has given millions to thechurch, had moved his high-techstartup company from Santa Moni-ca, Calif., to downtown Clearwatertwo years earlier, locating it justtwo blocks from the church’s inter-national spiritual headquarters.

He has long insisted that Digitalhas no connection to the contro-

versial church. Zwan said he neverhired people because they are Sci-entologists and never soughtchurch advice on company mat-ters.

“We are a public company,” Zwansaid. “We have nothing to do withthe Church of Scientology. It hasno role in this company.”

But a four-month review by theSt. Petersburg Times, drawing onthousands of pages of court docu-ments and dozens of interviews,makes it clear that the fortunesand the misfor tunes of DigitalLightwave have been profoundlyaffected by influential Scientolo-gists with close ties to the church.

Zwan’s stewardship of Digital hasbeen tumultuous, marked by wildsuccess that made the Belleairphysicist one of America’s richestmen, and by a debacle that badlywounded the company.

Other local companies are run by Scientologists with little scrutiny.

I

Continues on Page 10A

HOW BRYAN ZWAN AND FELLOW SCIENTOLOGISTS SHAPED DIGITAL LIGHTWAVE

churchCEOand hisThe

Singing Bono’s praises

THE TIMESTODAY

COOL OFF WITH CABLEIt’s the Season of Reruns for thebig networks, which means it’scable’s turn to shine. FromHBO’s ambitious The Wire toComedy Central’s low-browCrank Yankers, you’ll still havesomething new to beat the heat.

I N S U N D A Y A R T S , 1 0 F

TRAVEL TRANSFORMEDAs the summer vacation seasonbegins, many have a vastlyaltered attitude toward travel. So,consider traveling for its deeperrewards: the lure of the exotic,the chance to learn about othersand the romance of really understanding a change of place.

I N T R A V E L , 1 E

NEW BONITA SPRINGSA city that once was not muchmore than pasture and tomatofields is attracting millionaire residents at a blistering pace, butthe modest residents who makeit all happen can’t find housing.

I N L O C A L , 1 B

TIMES ■ SUNDAY, JUNE 2, 2002 * * * *10A

THE PRODUCT

THE CHURCH

THE LINKS

$130

120

110

100

90

80

70

60

50

40

30

20

10

0

Feb. 6 – Digital makes an initialpublic offering at $12 per share,raising $40.8-million.

Jan. 12 – A Scientologist who works at Digitalwrites a detailed “knowledge report” addressed toScientology officials, blaming Licciardi for problemsin manufacturing.

F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M J J A S O N D J F M A M J J S O J F

1997 1998 1999 2000 2001 2002

Jan. 22 – Digital publicly admits to accountingerrors and restates second and third quarterearnings. Its stock plunges. Investors sue. TheSEC begins investigating.

Feb. 8 – Licciardi sends Zwan a memo titled, “EndingCycle.” She offers to resign for a generous severancepackage. She resigns days later.

December – Digital moves to newheadquarters near the St. Petersburg-Clearwater International Airport.

December – Digital hires new CEO GerryChastelet. Zwan steps aside as CEO.

January – Digital's successis featured on the front pageof the Wall Street Journal.

March – Digital's stock peaks at $150.SEC settles with Digital, but sues Zwanover accounting problems.

June – Digital tops the Times50 list as the best-performingpublic company in Tampa Bay.

October – Zwan is amongForbes magazine's 400richest Americans

Zwan begins cashing out large blocks of shares after Digitalannounces its first-ever profitable quarter. He will make morethan $400-million through selling off stock by the fall of 2001.

Chastelet sells a chunk of stock,eventually making $19-million that year.Sources: Times research, SEC filings

Times art — JEFF GOERTZEN

A M A N D

day-to-day operations.Stock prices

October – Zwan, SECsettle. Zwan back on board.

August – Zwan stepsdown from board.

January – Chasteletresigns. Zwan returnsas CEO.

* * * * TIMES ■ SUNDAY, JUNE 2, 2002 11A

TIMES ■ SUNDAY, JUNE 2, 2002 * * * *12A