Government revokes group’s charity status, audit cites possible funding of Pakistani militants

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By:Stewart Bell and Sean Craig

Originally published by Global News, July 19 2017

See original article: Charity funding Pakistani Militants…

Federal regulators have revoked the charity status of a Canadian Islamic organization after an audit uncovered problems including tax receipts that were issued for donations to a Pakistani group linked to armed militancy.

ISNA Islamic Services of Canada was stripped of its charitable status for “non-compliance,” according to records obtained by Global News. Authorities also revoked a related charity, the Canadian Islamic Trust Foundation.

Both are former affiliates of the Islamic Society of North America-Canada (ISNA-Canada), and shared its Mississauga, Ont. address. Politicians of all stripes have attended ISNA-Canada events, notably Justin Trudeau in 2013 and, in April, Public Safety Minister Ralph Goodale.

The Canada Revenue Agency took action four years after the ISNA Development Foundation lost its charity status over fundraising for a Pakistani relief group linked to militancy in the disputed Kashmir region.

Among the findings that led to the latest two revocations was that ISNA Islamic Services tax receipts had been issued for collections by a Toronto mosque for the “charitable arm” of a Pakistani group whose armed wing was fighting Indian forces.

The money, raised by the Toronto-based Jami Mosque, was passed to the ISNA Development Foundation “for remit” to the Relief Organization of Kashmiri Muslims (ROKM), the CRA Charities Directorate alleged in the newly-released records.

“Our research indicates that ROKM is the charitable arm of Jamaat-e-Islami, a political organization that actively contests the legitimacy of India’s governance over the state of Jammu and Kashmir, including reportedly through the activities of its armed wing Hizbul Mujahideen,” the CRA wrote.

Outlining the audit findings in a letter to ISNA Islamic Services, federal officials said Hizbul Mujahideen had been listed as a terrorist organization by the Council of the European Union and the government of India.

“Given the identified commonalities in directorship between ROKM and Jamaat-e-Islami and the Hizbul Mujahideen executive committee, concerns exist that the funds collected and disbursed as part of this relief fund may have been used to support the political efforts of Jamaat-e-Islami and/or its armed wing Hizbul Mujahideen.”

The leader of Hizbul Mujahideen, Syed Salahuddin, was placed on the U.S. State Department’s list of designated terrorists on June 26. He had threatened to train suicide bombers and turn Kashmir “into a graveyard for Indian forces,” the listing said.

Csepregi said the CRA regularly exercises its authority to notify CSIS, the RCMP, and the Financial Transactions and Reports Analysis Centre of Canada when there are concerns that an organization is providing support to terrorism. However, he declined to comment on specifics for confidentiality reasons.

On its website, ISNA-Canada describes its mission as “building an Islamic way of life in North America.” It performs marriages and funerals, aids Syrian refugees and held a seminar on radicalization. It remains a registered charity with reported revenues of more than $3-million in 2015.

Audits of ISNA-Canada and its former affiliates began in 2011, said Syed Imtiaz Ahmad, the ISNA-Canada president and chair of ISNA Islamic Services. He said the audits were ordered after irregularities were brought to the CRA’s attention. Four charities were audited because the CRA suspected they were “in a sense indistinguishable,” he said.

The audits covered the years 2007 to 2009. But it wasn’t until June 2014 that the CRA informed the charities they risked losing their registration. ISNA Islamic Trust was also told it could face a $425,000 penalty.

It’s unclear why the CRA waited three more years before following through with the revocations of ISNA Islamic Services and the Canadian Islamic Trust, which came into effect on May 13. But in letters dated March 30, the CRA said that after reviewing the charities’ written responses to the audits, the government’s concerns had “not been alleviated.”

According to the records, ISNA Islamic Services had failed to keep proper donation records and had funded two separate organizations, the Islamic Centre of Toronto, known as the Jami mosque, and the Islamic Book Service, without exercising control over either group.

It had also issued $340,000 worth of receipts for money collected by the Jami mosque. The arrangement allowed donors to the mosque, a non-charity, to obtain charitable contribution receipts — which would allow them to deduct the amounts for tax purposes. Some of the money was allegedly raised by the mosque for the Pakistani group the CRA said raised terrorism concerns.

Portion of Canada Revenue Agency document highlighting concerns over fundraising.

Portion of Canada Revenue Agency document highlighting concerns over fundraising.

Canada Revenue Agency

Ahmad agreed the receipting had not been done properly. He blamed “ignorance plus recklessness” but said he did not doubt the money was meant for genuine relief efforts. He said changes had been made so that the Jami mosque would now operate under ISNA-Canada.

As for the Canadian Islamic Trust Foundation, the CRA records said the organization had “allowed itself to be governed” in the interests of several for-profit Islamic housing co-operatives, including the former ISNA Housing Co-operative.

According to the CRA, the Islamic Trust invested in the cooperatives despite cautions in disclosures to potential investors that there was no certainty they would be profitable or be able to pay dividends on shares.

The Islamic Trust was also found to have given $20,515 to three unqualified donees: the ISNA Human Development Institute (a federally incorporated entity that was dissolved in July 2016) and Islamic centres in Brandon and Yellowknife.

Amhad said mistakes had been made in the past due to a combination of “sheer ignorance” and “possible malfeasance on the part of some employees.” The problems were also partly the result of the government’s narrowing definition of charitable activity, he said.

But since returning as president two years ago, he said he had been working to ensure the organizations all complied with Canadian law. “ISNA has come a long way,” he said. “That situation has been corrected and we are now operating in full compliance.”

“We are on the right footing now.”

Facebook post regarding Public Safety Minister Ralph Goodale's visit to ISNA-Canada in April.

Facebook post regarding Public Safety Minister Ralph Goodale’s visit to ISNA-Canada in April.

Ahmad said the charity revocations were not discussed at an April 6 meeting with Goodale. “The subject was public safety. It was a totally different subject,” he said.

Goodale met with ISNA-Canada leaders “to listen to their perspectives on current issues,” said his press secretary Scott Bardsley, who said the minister was invited by local Liberal MP Sven Spengemann.

The meeting occurred a week after the two charities were notified of the decision to revoke their registration, but more than a month before the revocations came into effect.

“The government believes it is important to listen to concerns from all communities to build the safe and inclusive country that we all want Canada to be. We do not seek meetings with discredited organizations, nor give their views weight,” Bardsley said.

Mark Blumberg, an expert in non-profit and charity law, questioned why the CRA was not allowed the inform the public about concerns about particular charities until their status had already been revoked.

The system means Canadians are unaware of potential misuse of their charitable donations, he said. The British Charity Commission of England and Wales regularly distributes information to the public when it has significant concerns, rather than waiting until status has been revoked.

“It doesn’t mean the charity is doing anything wrong; it means [the Commission] is aware of it, they’re investigating it and then they can publish a report which says whether there is nothing wrong or minor issues were discovered or significant issues were discovered,” said Blumberg, a partner at Blumberg Segal LLP.

“I think we’re not doing the public any favors by maintaining the secrecy: you have well-meaning donors who don’t know there is a problem and they are donating to organizations that may be involved with improper activities.”

 

© 2017 Global News, a division of Corus Entertainment Inc.

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