The Church of Scientology is going through a difficult season.

Over the course of two days last week, a French court convicted the church of fraud and Oscar-winning filmmaker Paul Haggis' resignation from the church over a litany of concerns was aired publicly. On one hand, it was just another bad press week for the embattled institution founded in 1953 by the late science fiction writer L. Ron Hubbard.

But for former Scientologists and scholars of the movement, the setbacks pose a greater challenge coming on the heels of defections of top-level Scientologists who lifted a veil of secrecy on the organization and alleged a culture of violence and control under Hubbard's successor, David Miscavige.

"With any organization, the loss of a substantial number of your most experienced people and chaos at the upper levels is problematic," said David Bromley, a Virginia Commonwealth University professor who studies new religious movements and has written on Scientology. "There are PR implications, the possibility of legal actions. ... That dwarfs the other things."

The church has strenuously denied the allegations against Miscavige, portraying the accusers as lying disgruntled ex-employees.

Church spokesman Tommy Davis said Scientology is flourishing, with more than 8,000 Scientology churches, missions and groups in 160-plus nations. He said assets and property holdings have doubled over the past five years, including a new church in Rome and another opening this weekend in Washington, D.C.

"From our perspective, things are going pretty great," Davis said. "In fact, that's downplaying it. Actually, what's happening with the church right now is frankly spectacular. To the degree there are these various things happening, it really is a lot of noise."

One major survey of American religion shows Scientology declining in the U.S., however. The estimated number of Americans who identify as Scientologists rose from 45,000 in 1990 to 55,000 in 2001, then plummeted to 25,000 in 2008, according to the American Religion Identification Survey.

Davis said that while the church avoids membership estimates, it's "absolutely in the millions" globally and growing in the U.S.

Scientology has long been controversial. The Internal Revenue Service granted the church tax exemption in 1993 after a nearly four-decade battle over whether it should be considered a religion. Critics say Scientology is a business, preying on people by charging exorbitant sums for services.

The church continues to fascinate, fueled by interest in celebrity adherents such as Tom Cruise, John Travolta and Kirstie Alley, as well as beliefs that don't fit into typical American religious boxes.

Hubbard taught that the "thetan," the equivalent of a spirit, can be cleared of negative energy from this and previous lives through a process called auditing. With the aid of auditors, Scientologists seek a state called "Clear" and then advance through various levels of "Operating Thetan."

The allegations of violence were leveled by four former high-ranking Scientology executives who told their stories to the St. Petersburg Times last summer. The executives said they witnessed Miscavige, chairman of the board that oversees the church, hit staff members dozens of times and urged others to do the same.

Davis called the allegations "absolutely, unquestionably false" and "sickening and outrageous." ABC's "Nightline" aired a report this month covering much of the same ground.

To critics of Scientology and ex-members who have grown increasingly vocal in recent years, it's a breakthrough -- critical voices from former members of the inner circle, not the media or outsiders.

"When you have dozens of people speaking out, it's no longer too credible to say they're all malcontents and criminals," said Jeff Hawkins, a former Scientology marketing guru who defected in 2005. "(The church) is either going to reform or collapse, and I think it's going to be the latter because they're incapable of reform or admitting any wrongdoing."

One defector, Marty Rathbun, who served on the church's board and was a top lieutenant of Miscavige's, said a growing movement of people hold to the tenets of Scientology, but reject the institutional church.

"I don't foresee another church," Rathbun said. "That was the first attack on me -- that this was a coup, that I'm trying to tap a schism or start another church. ... That's not an objective of mine or a positive way to go."

Haggis, the Oscar-winning director of "Crash," was not a high-ranking Scientologist. But his defection is significant, said actor Jason Beghe, who left the church in 2007 and has become a critic.

"He was somebody the Scientology community was proud of, and therefore I'm sure he helped hold some of their base in place," said Beghe, who appeared in the film "G.I. Jane" and TV's "Everwood" and is cast in Haggis' next film, now shooting in Pittsburgh. "Anybody who is a Scientologist is harboring doubts."

It was Rathbun who obtained a copy of Haggis' critical letter to Davis and posted it on his blog. Haggis complained that Davis didn't do enough to distance Scientology from proponents of California's gay marriage ban. He criticized the church's "smearing" of the high-level defectors.

The filmmaker also wrote about the church's practice of "disconnection," in which members cut off contact with loved ones who leave or advocate against the religion -- something Davis said is not mandated.

A day after Haggis' letter went public, a Paris court convicted the Church of Scientology of fraud and fined it more than $900,000, but stopped short of banning the group's activities in France. The organization's French branch likened it to a modern-day Inquisition and said it would appeal.

Davis questioned the attention paid to the French verdict, saying that little notice was given when the church won court victories in Italy and Russia that cemented the church's presence in those countries. He said the top-level defections are not troubling, but rather a gain for the church.

Some scholars of Scientology believe the recent setbacks are momentary.

Defectors are overly optimistic about doing any real damage, said J. Gordon Melton, director of the Institute for the Study of American Religion in Santa Barbara, Calif., and editor of a book on Scientology.

"If five cardinals walked out of the Roman Catholic Church and turned on it and said there are bad things happening, it'd be a storm, but the church would weather the storm," Melton said. "I think Scientology is big enough to where it can and will weather the storm."

Most religions, Scientology included, experience disagreement and leadership turmoil after a founder's death and survive, said Susan Palmer, a religious studies professor at Dawson College in Montreal.

"I think they'll end up like the Mormon church or Jehovah's Witnesses, that were very controversial in our time but now are largely accepted," Palmer said.

Others think the Church of Scientology is in trouble. Along with the defections and French court setback, Scientology has been unable to stop Internet leaks of confidential material that members must pay a premium for, said Hugh Urban, a professor in the department of comparative studies at Ohio State University.

"They're really losing what has been the bread and butter," Urban said.

Meanwhile, an online betting parlor is taking wagers on the next celebrity Scientologist to leave.

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