COLUMN ONE : Biosphere 2: Trouble in Paradise : What began as a theater troupe’s fantasy is now a nightmare of legal wrangles and bitter feuds.

This is a story of people who made a world in their image and of how it came apart.

Their world is a self-contained planet in a bottle outside Tucson called Biosphere 2--an ambitious ecology experiment that draws 250,000 tourists every year to browse past its souvenir stands, admire its architecture and gawk at its sculptures constructed of scrap metal recycled from nuclear weapons laboratories.

A harsh struggle for control of this artificial Earth has torn apart the secretive community of engineers, eco-warriors and money men that worked to raise a $150-million monument in the desert to their vision of a better life under glass.

Today, the Biosphere project is in temporary receivership. One founder was hospitalized for stress; another has been indicted on charges she sabotaged the Biosphere she once inhabited. A third--Edward P. Bass, the Texas multimillionaire who bankrolled the test-tube Earth--is prepared to face off in federal court next month to cement his authority over the facility.

Theirs is a cautionary fable of free-wheeling finance and the private enterprise of science.

To the outside world, the people of the Biosphere crafted a public image of cheery environmental activists, dressed like Mighty Morphin Power Rangers in matching jumpsuits, intent on building the ark that they thought would help establish humanity on Mars.

But private letters, diaries, faxes, internal memos and court papers reveal deep organizational tensions, fractious internal disputes, and mutual suspicions that have been building since the Biosphere was completed in 1991.

The world of the Biosphere, documents show, is one in which the inquiries of outside scientists conducting peer review were seen as slander, routine committee meetings were taken as evidence of a conspiratorial cabal, and even a simple internal business audit was considered a grab for power.

In the end, the environmental visionaries came up hard against an eccentric businessman whose funds may have seemed inexhaustible but whose patience was not.

Earlier this month, Bass obtained a court order to formally oust the key managers of the Biosphere and seize the premises. He also formally dissolved the partnership between the project’s financial arm, which he controls, and its management team, including founders John Allen and Margret Augustine.

In an interview, Allen called the situation “the biggest scandal in science I know of.”

Augustine could not be reached for comment.

Bass, through a spokeswoman, has turned down requests for an interview.

“His lawyers have advised him not to make any comment until the court case is completed,” said Terrell Lamb, his media consultant, in a formal statement on behalf of the Bass organization. “The fundamental problem with the management of Space Biospheres Ventures was that Ed Bass was persistently lied to.”

But the ousted employees and others involved in running the Biosphere made available copies of corporate minutes, internal memos, chapters of unpublished manuscripts, a videotape and correspondence that help shed new light on how the experiment was run.

The Biosphere 2 project, operated formally by a company called Space Biospheres Ventures run by Bass, Augustine and Allen, was a volatile blend of New Age idealism and corporate sophistication. Biosphere 1, in their view, is the planet Earth.

It started as a shared fantasy in an avant-garde theater troupe of environmental zealots and trust-fund hippies on a Santa Fe ranch in the early 1970s.

There was Bass, the second son of the Ft. Worth Bass family, which has amassed holdings worth several billion dollars. There was Allen, the restless son of an Oklahoma farmer, who harbored a store of visionary ideas on how to save the environment or, at least--through Space Age arks such as the Biosphere--survive its destruction. They hoped that such self-supporting enclaves could become the model for a colony on Mars.

With Bass providing the bankroll, Allen, Augustine and others in the troupe built an empire of hotels, ranches and ecologically oriented companies over the next 15 years in a network of holdings stretching from Ft. Worth to Nepal, knitted together through about 40 corporate and legal entities.

As recently as 1986, they were still staging plays at the Theater of All Possibilities in Ft. Worth, with Bass acting the role of what one reviewer called a “mogul of illusion” in a science fiction drama Allen wrote under a pseudonym.

To build the Biosphere, the group married the romantic rhetoric of spaceflight and the set design of “Star Trek” to the humble hoe-and-compost-heap technology of waste recycling. From the beginning, they intended that the Biosphere should be a money-making venture.

Today, Biosphere’s outward appearance belies its internal turmoil. The three-acre terrarium by the Santa Catalina Mountains contains a rain forest, a desert and a tiny ocean as well as 3,800 species of plants and animals that nourish one another in what its owners like to call the largest self-sustaining ecosystem ever built (except Earth, of course). They decorated the grounds with their own brand of sculpture--metal icons of nuclear terror. There are plans for a golf course.

As they assembled its foundations during the 1980s, the group was dogged by bizarre published reports that Allen, a man some described as a “poetic pussycat,” was a cult leader who routinely tongue-lashed Bass, on occasion hit him and psychologically coerced him into funding projects.

Both men have denied the more lurid stories, blaming disgruntled employees for them.

The stories were enough, however, to prompt Allen to formally resign his post in 1985 as a consultant to Decisions Team Ltd., one of the holding companies overseeing the Biosphere. Allen stayed on as vice president of biospherics at Space Ventures until earlier this month, when he resigned to protest Bass’ court action.

In a recent affidavit, Bass sought a temporary restraining order barring Allen and others from the Biosphere because “based on my past experiences, such persons have demonstrated the capability to react irrationally or destructively. . . . “

Bass, 48, is described by associates as something of a loner who used to spend half of every year on a 500,000-acre ranch in Australia. He now rarely gets farther than Ft. Worth. He donated $20 million to Yale University, his alma mater, to study the environment and the ecology.

He has never given a detailed explanation of his reasons for investing in the Biosphere project, but to a man whose family has made several billion dollars on investments in Walt Disney Co., the idea of an ecological theme park along the lines of Epcot or Sea World seemed reasonable. Until recently, the Basses owned a 24.9% share of Disney.

In a written response to a reporter’s query several years ago about the theme park aspects of the Biosphere, Bass said: “As to the accusatory claims that this is Disneyland, it certainly is. . . . It would be a waste to be doing this without giving a means for people to access it. Besides, (tourism) is a significant source of revenue.”

The most recent turmoil was presaged by a widely publicized dispute last year that resulted in the resignations of the Biosphere’s independent Science Advisory Committee (SAC).

That disagreement centered on questions of scientific standards, just as the more recent fight revolved around questions of financial standards. The disputes, observers say, show how the managers responded to criticism by working to limit outside scrutiny and how pervasive their distrust of Bass was becoming.

The group of eminent scientists that made up the committee, which was chaired by Thomas E. Lovejoy, a senior official at the Smithsonian Institution, had been recruited in 1992 to bolster the project’s scientific credibility. Lovejoy is the assistant secretary for external affairs at the Smithsonian.

Committee members have repeatedly declined to detail their reasons for leaving the project. Several still work as Biosphere consultants.

Previously unpublished letters between Bass and Lovejoy last year reveal the degree to which the dispute centered on the board’s objections to the way Allen and Augustine ran the Biosphere, citing concerns that the data was unreliable and “a pattern on the part of Biosphere 2 staff of withholding information and lying.”

The board was created after the project’s combination of serious science and theme park commercialism earned hoots and hosannas in equal measure from mainstream scientists. Its scientific achievements were tainted by what many critics saw as evidence of duplicity.

The most serious complaints involved allegations concerning the fundamental honesty of the Biosphere experiment, in which the test tube itself was one of the unknowns.

Project managers had vowed that the Biosphere would be self-supporting during its first two-year experimental run, from 1991 to 1993, growing its own food, generating its own air and recycling all its wastes.

As soon as the first eight-member crew was sealed inside Sept. 26, 1991, however, reports quickly surfaced that they were living on stored food supplies and that they were replenishing the inside atmosphere with extra oxygen. Unknown to the public at the time, a carbon dioxide scrubber had also been installed to eliminate harmful build-up of dangerous gases.

The project managers considered expelling one crew member from the Biosphere for revealing the existence of the food stores, documents show.

As problems and criticism mounted, the people running the project retreated into a defensive shell--the emotional equivalent of the Biosphere.

By January, 1993, the science advisers, anxious to ensure the reliability of the data the Biosphere was producing and restore its credibility, had decided that Allen, Augustine and other local managers were a fundamental part of the problem, not part of the solution.

“They are making mistakes and they don’t even know they are making them,” one committee member says on a videotape of an informal meeting in January, 1993.

When one employee took his complaints directly to the scientists, Bass complained to Lovejoy that the committee “seems to have become a lightning rod for not only legitimate matters, but also for complaints and grievances of all sorts. Frankly I cannot distinguish the truth amongst the muddle.”

Allen criticized the science committee as a “hit team from the Establishment” orchestrated by Bass, according to an unpublished diary kept by one employee.

Mark Nelson, a founding member of the team who spent two years inside the Biosphere, said in a recent interview that the committee had nothing to do with research and “totally to do with discrediting the management in an attempt to take over the corporation.”

Bass defended the managers, however, the 1993 letters show.

“What has been increasingly difficult is the insistence . . . that I remove Margret Augustine and John Allen from their management positions with the corporation,” Bass wrote to Lovejoy. “To take your advice literally would almost certainly shut down the project and jeopardize its entire future.”

In a second letter he wrote, “I certainly never intended the committee to involve itself in matters far afield from science relating to the management of a privately held and highly diverse business.” Bass said the committee’s inquiry was “very questionable ethically.”

The project managers were so upset about the committee’s inquiry that before the committee had a chance to determine whether any of the allegations were true, they persuaded Bass to order Lovejoy and board members to stop talking to each other except when formally convened by the Biospherians.

“Science does not work that way,” Lovejoy responded bluntly in a letter to the financier and submitted his resignation.

In February, 1993, the senior managers voted to dissolve the science committee.

Barely a year would pass before Bass would move to dismiss Augustine and Allen under conditions that Nelson would call an eerie replay of the dispute over the science committee. Again, outside scrutiny would trigger a crisis.

As the Biosphere 2 project skirted the edge of scientific respectability, the managers found that profits also were elusive.

“Though conceived as a profit-producing venture, Biosphere 2 has yet to make a profit, and is currently requiring substantial cash funding,” Bass said in an affidavit.

Senior managers were looking for someone to buy the Biosphere--the asking price for an equity share was to be $300 million--and several of the original Biosphere crew were suing for payment of back salaries. The senior managers and Bass spent hours in board meetings discussing plans to put the project on a sounder footing.

When Bass tried to install Beverly Hills investment banker Stephen K. Bannon as an interim chief executive officer, Augustine would not let him on the property and told employees not to talk to him, according to Bass’ affidavit.

And when Bass tried to check the company’s financial records, the managers would not let the auditor talk to employees and would not let him see the accounting records, court papers said.

When Bass commissioned an outside auditing firm to check the accounts, Allen, Augustine, Nelson and other senior managers voted March 28 to suspend the audit, corporate minutes show.

The auditors “were going to kill the management there and finish the job the SAC had failed to do,” Allen said in an interview.

Three days later, Bass was in federal court in Ft. Worth to end the partnership.

The next day--April Fool’s Day--Allen, Nelson, Augustine (who checked out of the hospital last week) and the others were officially barred from the Biosphere they had built.

Two of them--Abigail Alling and Mark Van Thillo, who had spent two years inside the Biosphere as part of the first crew--were arrested for opening the sealed enclosure to let in outside air. On Thursday, a grand jury in Arizona dropped the charges against Van Thillo, but formally indicted Alling. If convicted, she faces up to 22 months in prison and a $150,000 fine.

“What I think has happened so far is in the best interests of the project,” Linda Leigh, co-captain of the crew that spent two years in the Biosphere, said in an interview. “I’m really behind Ed Bass 100%.”

Charting Biosphere 2

Here are some key dates in the Biosphere 2 project:

* 1984: John P. Allen is said to have come up with idea that led to development of Biosphere 2.

* Sept. 26, 1991: An eight-person crew enters Biosphere 2.

* January, 1993: Oxygen is pumped into the project after level drops too low.

* Feb. 5: An independent panel of 10 scientists helping oversee the Biosphere experiment quits, citing of a lack of cooperation from project managers.

* Sept. 26: The first crew leaves the complex.

* March 6, 1994: A seven-member crew enters Biosphere 2.

* March 15: Crew members Jane Poynter and Taber MacCallum sue for back pay and $10,000 bonuses they say they never received after their two-year stay in the sealed glass dome.

* March 31: Edward P. Bass, chief financial backer, gets temporary restraining order to suspend top managers of project, alleging financial mismanagement.

* April 4: Someone on the outside breaks Biosphere’s air lock seals.

* April 6: Two members of Biosphere’s first crew, Abigail Alling and Mark Van Thillo, are arrested on trespassing, burglary and property damage charges stemming from the April 4 incident.

* April 7: Alling and Thillo are fired.

* April 8: Allen resigns. Crew member Norberto Alvarez-Romo leaves the sealed environment because of a family emergency involving his wife, ousted president and chief executive officer Margret Augustine.