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The man who took the title Bhagwan was born Mohan Chandra Rajneesh in 1931, in the small rural Central Indian village of Kutchwada. He briefly attended classes at Hitkarini College, then transferred to D.N. Jain College in Jabalpur where, on March 21, 1953 he experienced his "enlightenment." He received a B.A. in 1955 and an M.A. in Philosophy in 1957, both from the University of Saugar. In 1958 he lectured in Philosophy at the University of Jabalpar, and in 1960 was promoted to professor. He traveled throughout India giving lectures criticizing socialism and Gandhi, and in 1964 he established his first meditation camp. A woman named Ma Yoga Laxmi, politically connected to India's National Congress Party, became his first disciple and the manager of his affairs. In 1966 the University asked him to resign. He began using the title "Acharya," or "Spiritual Teacher."

In the late 1960's Rajneesh called for freer acceptance of sex and, at the Second World Hindu Conference, criticized all organized religions and their priests. Settling in Bombay with a small group of disciples, he formed an official organization. He developed the concept of the neo-sannyasin, dressing his followers in the saffron robes worn by ascetic Hindu holy men. He initiated his first six disciples and founded the Neo-Sannyas International Movement.

In 1971 Rajneesh assumed the title "Bhagwan," or "the Enlightened One." His first English-language book, The Gateless Gate, was published that year. In an effort to expand recruitment, Rajneesh instructed followers to establish meditation centers in their home countries. By 1973 an extensive organization had developed, including two centers in England and one in the US. By the following year, centers existed in fifteen countries. Rajneesh added "Shree," meaning "Sir," to his name, and he established the Shree Rajneesh Ashram in Poona. It included a publishing business, the Rajneesh International Meditation University, and educational and meditation programs. The Rajneesh Foundation was established to underwrite the activities.

In early 1981, Sheela Silverman, the effective business manager of the movement, bought a mansion in Montclair, New Jersey for a meditation center. Rajneesh came to the US, and he and Sheela bought a ranch and land in Central Oregon near Antelope, where they relocated. By June 1981 the infrastructure for a large commune was underway on the ranch, but publicly they denied building a major spiritual center. By September, local residents tried to block development by organizing and lobbying. The group "1000 Friends of Oregon" filed motions. Rajneeshee lawyers initially won by claiming discrimination, but county commissioners and land-use boards were reluctant to issue further permits.

The US Immigration and Naturalization Service noticed high numbers of residents with temporary visas, and questioned Rajneesh's intention to permanently reside in the US. In October the Portland INS office investigated possible immigration fraud. Rajneesh requested permanent residence status as a "refugee religious leader," securing a temporary visa extension, but investigations continued.

By November 1981, growth on the ranch had been blocked. Rajneeshee leaders asserted dominance in Antelope with its already existing Urban Growth Boundaries (UGB), and moved towards incorporating a new city (Rajneeshpuram) which would form a growth boundary of its own. Opposition among locals increased. By 1982 the Oregon commune could sustain 2,000 residents, and as many as 5,000 visitors. Their commercial enterprises spread into Antelope. Residents responded with rigid code enforcement, a moratorium on permits, and an attempt to "disincorporate" the town itself, which was ultimately defeated. In August, the new Rajneeshpuram city council was elected, and by September they adopted a Comprehensive Plan and Development Code. The incorporation and the development plan were challenged, but the community kept building as more followers arrived. By November the Rajneeshees controlled Antelope, with local elections formalizing their authority. The town was renamed "City of Rajneesh" to distinguish it from the nearby ranch, which was called "Rajneeshpuram."

In June state officials investigated church-state conflicts. Ma Prem Sangeet, the City Attorney, claimed the city was independent of its sole landowner, as well as the movement that was its entire reason for being. The Attorney General was unconvinced and investigated relationships among Rajneeshee legal entities. In September an organization of "Concerned Oregonians" began actively observing the Antelope school. They called for investigations and lobbied for the termination of state funding. Frohnmayer released an opinion that sparked a lawsuit challenging incorporation on the basis of church and state separation issues. Sannyasins responded by engaging in paramilitary training, wiretapping, and mass poisonings, undermining their already diminishing credibility.

In autumn 1984 Rajneeshees tried to take control of Wasco County using lenient Oregon voter registration laws to pad elections. They bused in thousands of homeless to swell the population enough to ensure victory at the polls. Oregon passed "emergency procedures" requiring interviews of new voters gauging their residency intentions; many were denied registration. On November 16 two uncontested candidates for Wasco County Commissioner were elected; a record 92% of county residents voted. Afterwards the commune dumped the homeless folks into surrounding areas.

In September, at Sheela's request, they placed salmonella on food in eight salad bars in The Dalles area. 750 people fell ill in two outbreaks of poisoning; 45% required hospitalization. This was a "test" to determine if enough voters could be disabled in case of a close race. Some sannyasins left, disillusioned by the homeless experiment and the poisonings. Community income decreased and more foreign centers failed. On September 13, 1985 Sheela told a few leaders that the commune was collapsing and she was leaving. Fearful of arrest, she left for Europe the next day with Ma Anand Puja, medical corporation director and accomplice in the salmonella incident. Two staff members accompanied the women. On September 15, ten more leaders fled. The next day, Rajneesh called a press conference announcing plans for a management change and restructuring. He denounced those who left and claimed ignorance of the community's actions. He told the sannyasins to sell the Antelope properties to former residents, restore the town's name, and begin giving up control. He declared dress codes and sannyasins' names optional, and selected new leaders from among his wealthier American disciples. A joint federal and state investigative task force moved to Rajneeshpuram. Investigators confirmed evidence regarding wiretapping, salmonella cultures, and sham marriages, among other crimes.

By September 23 there was enough to indict Rajneesh and seven others on several conspiracy and perjury charges. A Federal Grand Jury indicted Sheela, Puja, and Bhadra. On October 27, 1985 Rajneesh boarded a Lear jet for Bermuda. After Rajneesh's departure, the commune's bank accounts were frozen and most residents departed. The ranch was sold at auction; the community assets liquidated. After returning to India, Rajneesh embarked on a "world tour," but many countries either forcibly ejected him or only allowed his plane to land long enough to refuel. He died in India in 1990.

Upon its incorporation, the Rajneesh Legal Services Corporation oversaw Rajneesh legal strategies under the direction of Swami Prem Niren, aka Philip (P.J.) Toelkes, who acted as the director from the fall of 1981 to the fall of 1985. The Rajneesh Legal Services Corporation, along with the Rajneesh Financial Services Trust, was key to policy implementation, and provided legal advice both individually and for commune corporations. Niren and his staff received a retainer of $22,000 per month from the commune, primarily for assisting in the design of the overall corporate network, and for representing commune organizations at land-use hearings and assorted other civil or criminal litigation.