Why does cperl-mode slaughter my formatting?

[Harry Putnam]

Try to ignore the horrible perl coding for a moment and just look at
the format:

open(FILE, "<./rcfile");
while(<FILE>){
  if (/^<DIR>/) {
    $save_dir = 'TRUE';
  }
  if(/^<\/DIR>/) {
    $save_dir  = "";
  }
  if($save_dir) {
    push @directories,$_;
  }
  if(/^<HEADER_RE>/){
     $save_hre = "TRUE";
  }
  if(/^<\/HEADER_RE>/) {
     $save_hre = "";
  }
  if($save_hre) {
    push @header_re,$_;
  }
  if(/^<BODY_RE>/){
     $save_bre = "TRUE";
  }
  if(/^<\/BODY_RE>/) {
     $save_bre = "";
  }
  if($save_bre) {
    push @body_re,$_;
  }
}

When I use C-M-\ to format above, cperl-mode does this:

open(FILE, "<./rcfile");
while (<FILE>) {
  if (/^<DIR>/) {
    $save_dir = 'TRUE';
  }
      if (/^<\/DIR>/) {
        $save_dir  = "";
      }
          if ($save_dir) {
            push @directories,$_;
          }
          if (/^<HEADER_RE>/) {
            $save_hre = "TRUE";
          }
              if (/^<\/HEADER_RE>/) {
                $save_hre = "";
              }
                  if ($save_hre) {
                    push @header_re,$_;
                  }
                  if (/^<BODY_RE>/) {
                    $save_bre = "TRUE";
                  }
                      if (/^<\/BODY_RE>/) {
                        $save_bre = "";
                      }
                          if ($save_bre) {
                            push @body_re,$_;
                          }
                        }


Surely that can't be a desireable format?
I'd hoped defaults would be good to work with, and maybe they are.
Anyone see how I'm screwing it up?

cperl-version's value is "4.32"