President allegedly bought comic books with society money
OTTAWA––The Canadian Federal Court of Appeal on August 19, 2015 upheld a November 17, 2014 decision to revoke the charitable registration of the Humane Society of Canada, formally called the Humane Society of Canada for the Protection of Animals and the Environment.
An advocacy organization, the Humane Society of Canada does not operate animal shelters, and is not to be confused with the Canadian Federation of Humane Societies. The Humane Society of Canada is not among the current 52 active Canadian Federation of Humane Societies members.
Meals, liquor, & Disneyland
Recalled Don Butler of the Ottawa Citizen, “The dispute began in 2007, when the Canadian Revenue Agency did an audit of the humane society’s books for the 2006 taxation year. According to the Federal Court decision, the audit found that a “large portion” of the society’s resources did not seem to have been devoted to charitable purposes. It also found that the society reimbursed executive director Michael O’Sullivan for more than $250,000 in expenses, including about $70,000 that the CRA categorized as personal expenses.
“Included in that amount, the court’s decision says, were ‘a large number of personal meal expenses, the cost of comic books purchased through PayPal, liquor purchases from the Liquor Control Board of Ontario, grocery purchases, tickets to entertainment events in the United Kingdom and the U.S.A., and expenses of O’Sullivan and his family at Disneyland.”
Intent to revoke issued in 2010
Then-Canadian minister of national revenue Keith Ashfield in 2010 issued notice of intent to revoke the Humane Society of Canada’s charitable status. The Humane Society of Canada contested the revocation. The revocation was affirmed in 2013, however, by the Canadian Revenue Agency Appeals Directorate.
“In 2012,” Butler wrote, “lawyers for the Humane Society of Canada confirmed that the society had ‘inadvertently’ reimbursed O’Sullivan for about $22,000 in personal expenses, the appeal court’s decision says. Despite that, the Canadian Revenue Agency Appeals Directorate ‘remained of the view that at least $69,343.81’ of the reimbursements were personal expenses of O’Sullivan. The Appeals Directorate also rejected the humane society’s assertion that the comic books purchased by O’Sullivan were ‘investment assets.’”
Attorneys for the Humane Society of Canada then argued in May 2015 that the Canadian Minister of National Revenue, now Kerry-Lynne D. Findlay, lacks authority to legally revoke the organization’s charitable status, and may “only impose a penalty on the amount paid to O’Sullivan as personal benefits,” Butler summarized.
The Canadian Federal Court of Appeal rejected that argument, along with affirming the reasons for revocation found by the Canadian Revenue Agency Appeals Directorate.
Tracked Santa & his reindeer
The Humane Society of Canada offered no immediate comment. As of August 20, 2015 the most recent news release on the Humane Society of Canada web site, posted on December 24, 2014, was entitled “The Humane Society of Canada––Tracking Santa and his reindeer.”
Current or recent campaigns described on the web site include encouraging people to leave pets at home in hot weather, to help pets cope with anxiety during thunderstorms and fireworks displays, and to ask “Canadians and companies not to support the cruel animal spectacles that form a part of rodeos like the Calgary Stampede.”
Was HSUS subsidiary
The Humane Society of Canada was incorporated in 1993 by then-Humane Society of the U.S. president John Hoyt, who retired in 1996 and died in 2012; then-HSUS senior vice president Paul Irwin, who succeeded to the HSUS presidency and in turn was succeeded by current HSUS president Wayne Pacelle in 2004; and longtime World Society for the Protection of Animals board member Dominique Bellemare.
Michael O’Sullivan, previously Canadian representative for the World Society for the Protection of Animals, was hired as executive director of the Humane Society of Canada, and has headed it ever since.
Irwin, born in Canada but living in Maryland at the time, claimed Canadian residence on a passport application in order to get around a Canadian requirement that the majority of board members of Canadian nonprofit organizations be Canadians. Irwin’s Canadian passport was revoked after the arrangement was disclosed in subsequent litigation.
Bellemare, a Montreal attorney, was a curious choice as a third board member, since Bellemare had previously worked for the Canadian Ministry for External Affairs. The Ministry for External Affairs both then and now led Canadian governmental efforts to prevent the European Union from banning and enforcing bans on the import of seal pelts and trapped fur.
Further, the Ministry for External Affairs while Bellemare worked there was headed by former Canadian prime minister Joe Clark, a strong defender of sealing, trapping, and hunting––and Bellemare had campaigned in 1983 for Clark, against Brian Mulroney. Elected prime minister, Mulroney suspended the seal hunt in 1984. The hunt resumed in 1995, a year after Mulroney left office.
Bellemare and Clark both told ANIMALS 24-7 editor Merritt Clifton that Bellemare did not work on animal issues while working for the Ministry of External Affairs, but neither would say what Bellemare did work on.
As a World Society for the Protection of Animals board member for more than 20 years, and WSPA board president in 2008-2010, Bellemare rarely if ever took public positions on animal issues, and never individually and explicitly denounced the seal hunt and wearing fur, but did three times run unsuccessfully for Parliament as a candidate of the pro-sealing and pro-fur Conservative Party of Canada, in power under 2006 under current prime minister Stephen Harper.
O’Sullivan sued HSUS
In July 1996 O’Sullivan sued the Humane Society of the U.S. and HSUS officers Hoyt, Irwin, and Janet Frake, seeking to separate the Humane Society of Canada from HSUS control, place it under control of a board headed by O’Sullivan, and recover just over $1 million which had been transferred from three Humane Society of Canada and Humane Society International accounts to HSUS earlier in the year.
The suit alleged that the defendants improperly and illegally advanced the interests of HSUS over those of Canadian donors who had contributed to the Humane Society of Canada.
Ontario Court of Justice judge Bruce C. Hawkins in January 1997 ordered HSUS to repay $740,000 to the Humane Society of Canada.
The revocation of the Humane Society of Canada’s charitable status, begun less than a decade later, was initiated under regulations having to do with accountability and operating in self-interest. This was five years prior to the introduction of new regulations introduced in 2011 which reinforced language already permitting the Canadian Revenue Agency to revoke the nonprofit status of animal charities that devote more than incidental portions of their budgets to opposing vivisection, hunting, trapping, the fur trade, seal-clubbing, animal agriculture, and other legal uses of animals.
“According to common law, a purpose is only charitable when it provides a benefit to the public (or a sufficient segment of the public),” the Canada Revenue Agency regulations assert. “In the context of animal welfare, the courts have determined that promoting the welfare of animals provides an intangible moral benefit to humanity in general. As a result, the very act of showing kindness to animals in need of assistance or care satisfies the public benefit requirement under common law.
Activities “contrary to public policy” barred
“The Income Tax Act permits all registered charities to use a limited amount of their resources to conduct non-partisan political activities,” the Canada Revenue Agency regulations continue. “With regard to animal welfare charities, this includes advocating for changes in law regarding animal welfare if these activities further the charitable purposes. However, notwithstanding the Income Tax Act provision allowing limited political activities, common law prohibits organizations that are constituted for a political purpose,” namely with advocacy as a focus, “to be recognized as charitable.”
In addition, the Canada Revenue Agency regulations state, “Purposes and activities that would be illegal in Canada and those that are contrary to Canadian public policy are prohibited.”
The phrase pertaining to public policy is particularly threatening to animal advocacy organizations, since Canadian public policy, especially under the Harper government, is to support animal use industries. This includes support of industries such as sealing and the fur trade that national polling suggests are morally offensive to substantial portions––perhaps the majority––of Canadian citizens.
The Canada Revenue Agency interpretation of common law governing charities parallels the interpretation that the United Kingdom has applied since the 19th century to constrain the opposition of major animal charities to vivisection and fox hunting, in particular.
The U.S. Internal Revenue Service and the Indian Revenue Agency, however, have taken a broader view of the same common law precedents, and have not imposed a test of whether activities benefiting animals benefit humans more.
“Seeking to abolish vivisection not charitable”
The 1947 case National Anti-Vivisection Society v. Inland Revenue Commissioners established that in Canada, “seeking to abolish vivisection,” a charitable purpose recognized in the U.S. and India since the 19th century, “is not charitable,” because despite the suffering inflicted on animals, the “immense and incalculable benefits which have resulted from vivisection,” and the “positive and calamitous detriment of appalling magnitude” that would result from its abolition, “outweigh any possible promotion of the moral and ethical development of the community.”
The Canada Revenue Agency regulations do not directly mention trapping and sealing, but include an example making clear that Canadian animal charities may not openly oppose them:
“A charity might offer courses in how to minimize harm to local wildlife and ecosystems that tend to result from human activity. However, if the charity were to try to convince people that certain legal hunting practices were morally wrong and should be abolished, it would not be advancing education in the charitable sense.”
The Canada Revenue Agency regulations prevent Canadian charities from opposing animal slaughter and consumption, but provide that, “A charity that relieves suffering may seek to minimize any pain, injury, or distress felt by animals as a result of harm caused by others that is legally considered to be necessary or justifiable. For example, while federal and provincial legislation generally allows for animals to be processed as food, promoting ‘the humane slaughtering of animals’ is a charitable purpose. Similarly, while animal welfare law generally allows animals to be used for scientific experimentation, a charity could still conduct research into replacement, reduction, or refinement of the use of animals in scientific experimentation (although seeking to abolish the use of animals for scientific experiment is not itself a charitable purpose).”
Animal Defence League of Canada & Fur-Bearers
The Canada Revenue Agency in 1992 revoked the charitable status of the Animal Defence League of Canada, headquartered in Ottawa, for opposing the fur and sealing industries and animal use in experimentation, and in 1999 revoked the nonprofit status of the Fur-Bearers Protection Association, headquartered in Vancouver for similar reasons.
Unlike in the Humane Society of Canada case, the Animal Defence League of Canada and the Fur-Bearers Protection Association were not alleged to have used donations contrary to donors’ intent, nor of misusing donations to the benefit of any directors or members.
“Revenue Canada’s threat of canceling any group’s charitable status if they criticize the fur industry has effectively silenced all of the big groups in eastern Canada. They are now afraid to speak out,” charged Fur-Bearers cofounder George Clements in April 2003.
Clements died in June 2010, but Fur-Bearers continues to speak out against the fur industry under his successor, Lesley Fox.
In December 2001 the CBC public affairs program Disclosure reported that the Canada Revenue Agency had routinely targeted charities for audits after they were denounced by Charity Watch, whose president, George Barkhouse, also headed online entities called Hunt Action Canada and Hunt Action U.S.
Among the charities audited were the Schad Foundation, which helped to halt spring bear hunting in Ontario and British Columbia; the Sierra Club of Canada; the Federation of Ontario Naturalists; the World Society for the Protection of Animals; the Toronto Wildlife Centre; Ecotrust Canada; and the David Suzuki Foundation.