When McMurtry became aware of the critical condition into which the Order had fallen after Germer's death, he was impelled to invoke his documents of emergency authorization from Crowley, and assume the title "Caliph of O.T.O.," as specified in Crowley's letters to McMurtry from the 1940s. For the two witnesses he believed were necessary for this act, he chose Dr. Israel Regardie (1907-1985) and Gerald Yorke (1901-1983). McMurtry referred to these two as the "Eyes of Horus," as the two most prominent surviving personal students of Crowley. He advised them of his plans to reconstitute the O.T.O. using his letters of charter from Crowley, and requested their support, which was offered. McMurtry completed the activation of his Caliphate by June of 1969, with a letter to Hermann Metzger of Switzerland.

    Upon activation of the Caliphate, surviving O.T.O. members from the Germer and Crowley years were invited to join with McMurtry to resume regular operations of O.T.O. At that time there were less than a dozen surviving older O.T.O. members in the United States. Soror Meral, Soror Grimaud, Mildred Burlingame and Gabriel Montenegro indicated willingness to see the O.T.O. accessible to the general public. Ray Burlingame had died some years before, and Dr. Montenegro died on July 14, 1969, before an organizational meeting could be held. Frederick Mellinger had re-established his contacts with the Theosophical Society and had been essentially inactive in O.T.O. since approximately 1956, except to write his letter blocking the probate of Germer's will in favor of Metzger in 1963. Mellinger died on August 29, 1970. In 1969 and 1970, McMurtry, Burlingame and Sorores Meral and Grimaud began to perform initiations. On December 28, 1971, the Ordo Templi Orientis Association was registered with the State of California to form a legal entity for O.T.O.

    Sascha Germer died in April of 1975, and in 1976 when her death became known, the O.T.O. Association under McMurtry obtained a court order for delivery of the remnant of the O.T.O. archives that had been in her custodianship. This order was issued, recognizing Grady McMurtry as the authorized representative of O.T.O., by the Superior Court in Calaveras County, California, and filed July 27th, 1976.

    Under McMurtry, as Caliph or acting Head of O.T.O., several attempts were made to attract new members to O.T.O. and to make the Order known to the public. In 1970, O.T.O. published Crowley's Thoth Tarot Cards, illustrated by Lady Frieda Harris, from the Dublin address. Response was slow, but a few new members were initiated through efforts centered in Dublin, California at The College of Thelema and in San Francisco at the Kaaba Clerk House. The San Francisco activity collapsed, and one new member resigned. Activity continued for two years in Dublin, and then was transferred to Berkeley, California.
    In 1977, McMurtry held O.T.O. initiations at his home in Berkeley, California, and began a group there. O.T.O. was incorporated under the laws of the State of California on March 26th, 1979 e.v. Those who had claimed in print to be O.T.O. members or who were known to be former members were notified of the formation of this corporation, and given a period of time to file a claim to continued membership, according to a precedent established earlier by Karl Germer. The corporation attained Federal Tax exemption as a religious entity under IRS Code 501(c)3 in 1982.

Challenge in Court

A substantial effort was made to assume control of O.T.O. by Marcelo Ramos Motta (1931-1987) under the name "Society Ordo Templi Orientis." Mr. Motta had been a personal AA student of Karl Germer for a number of years, but had never formally obtained a charter to Initiate or operate a Lodge. In fact, he had never even been formally initiated into O.T.O. After Germer's death, Motta asserted a claim to being Germer's successor, and formed an O.T.O. group in his native country of Brazil. Motta at first recognized Kenneth Grant as head of O.T.O., but rescinded this recognition on learning that Grant had been expelled by Germer. Motta ultimately came to the United States to claim the Crowley copyrights. He first sued Samuel Weiser, Inc., a publisher of many of Crowley's works, for copyright and trademark infringement; maintaining that he was the sole representative of Crowley's O.T.O. This case was decided in Weiser's favor by the U.S. District Court in Maine. The Judge found that Motta's representations regarding O.T.O. did not meet the test of legal existence. O.T.O. under McMurtry was not a party to this case, and did not factor in the judgment.

    During the proceedings in Maine, O.T.O. under McMurtry served Motta with a suit to be heard in the 9th Federal District Court in San Francisco. The San Francisco case was concluded in 1985, with Motta again losing. O.T.O. under McMurtry was recognized by the Court to be the continuation of the O.T.O. of Aleister Crowley, and the exclusive owner of the names, trademarks, copyrights and other assets of O.T.O. McMurtry was found to be the legitimate head of O.T.O. within the United States. The 9th District decision also recognized O.T.O. under McMurtry as a legal membership entity. This decision was appealed and upheld. Grady McMurtry died on July 12, 1985, following the original decision of the 9th District Court, but the process of appeal established that O.T.O. continued as a corporation.

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