Canadian Politics

dignin wrote:

PJ_Soul wrote:

dignin wrote:

An excellent three part series by CBC Senior Washington Corespondent Neil Macdonald. Thought you guys might be interested in this, very eyeopening.


http://www.cbc.ca/news/world/story/2013 ... avers.html

http://www.cbc.ca/news/world/story/2013 ... rowth.html

http://www.cbc.ca/news/world/story/2013 ... crecy.html

What is it about?

Basically our impending financial doom.

But in all seriousness he can explain it much better than me. It's a long read but worth it.

Good article ... Thanks for posting

I'll never understand why people think politicians are crooked

http://www.chathamdailynews.ca/2013/05/ ... undraising

Review of documents filed in Trinity Global Support Foundation tax case shows big payments to insiders and millions spent on fundraising

Nearly $8 million raised for hungry school kids and to fight HIV/AIDs went into the pockets of Joe Fontana and fellow directors of his charity, the tax man says.

A government audit found with so much money going to benefit its directors and their businesses, and many more millions spent on fundraising and sunk into tax shelters, Trinity Global Support Foundation had strayed from its charitable purpose, court documents filed by the Canada Revenue Agency show.

Fontana, for instance, was paid $41,000 in “consulting fees” in 2009 and 2010 for the foundation he chaired, the documents reviewed by The Free Press say.

The CRA sought to lift the charitable registration Trinity relied on to issue an eye-popping $152 million in charitable receipts to donors in its last fiscal year.

Issuing that amount in tax receipts to Canadians anxious to reduce their taxes saw Trinity become the top-ranked private foundation in the country, with the total value issued at three times more than the second-ranked one.

In all, there are 86,000 charities in Canada. The tax agency didn’t mince words about what it thought about Trinity.

“The evidence,” the 2012 audit concluded, “demonstrates a preponderance of effort and resources devoted to non-charitable purposes.”

The audit and CRA letter yanking Trinity’s registration appear in documents filed with the federal court of appeal in Toronto, where Trinity fought the move to strip its charitable status, but lost.

In its audit of the foundation’s activities, the revenue agency referred to Trinity as an “organization,” rather than a charity or foundation.

It found Trinity invested and lost $7 million in an investment fund operated by Fontana’s boyhood chum Vince Ciccone, who founded Trinity in 2007.

“The organization was also found to have improperly paid over $865,000 to individuals and corporations related to the organization’s directors,” the CRA said in its Feb. 1, 2013 letter revoking Trinity’s charitable status.

The $865,000 was paid to its volunteer directors between 2008 and 2010 without proof such payments were legitimate, the agency said.

Fontana, then between his jobs as London MP and London mayor, was paid $41,000 in “consulting fees” related to public relations, communications, promotion, government relations and advisory services.

Fontana didn’t respond to a request for comment, referring questions to Trinity lawyer Duane Milot, who said he’d already responded to the CRA’s “unproven allegations” in court.

Fontana became a Trinity board member in 2008, when Ciccone asked him to join, and chairperson after Ciccone left in 2010 amidst securities charges related to his Ciccone Group.

Fontana and Ciccone were pals as youngsters in Timmins and later became partners in Advance Property Management in London. Fontana also appeared at investor seminars for Ciccone Group in recent years.

Fontana stepped down as Trinity chairperson late last year, but remains a board member.

The payments also included $325,000 apiece to Ciccone and board member Carmine Domenicucci for arranging a $7-million investment in Ciccone’s numbered company, 990509 Ontario Inc., and into GEMS Partnership, in which Ciccone and Domenicucci were shareholders.

Ciccone was paid another $25,625 for “management fees.”

Other payments included nearly $38,000 to Ciccone’s wife, Karen Thompson-Ciccone, for “consulting fees,” to Trinity vice-president Patrick Holmes $47,500 for “financial services” and to Fontana’s son, Ugo Joseph Fontana, $62,730 for “services as president.”

“Our audit has also revealed insufficient separation between the organization’s operations and the personal business and financial interests of those responsible for its operation,” said the letter outlining reasons for withdrawing Trinity’s charitable status.

Too much was spent on fundraising and plowed into tax shelters whose purpose is to help Canadians avoid paying taxes, the agency said. Neither is a charitable activity, the CRA ruled, and left too little for Trinity to pursue its stated goals of feeding hungry school kids through lunch and snack programs in Canada and to provide pharmaceuticals to fight HIV/AIDS in Africa and the Caribbean.

The money to directors, was paid to firms owned by them, such as Joe Fontana’s 719382 Ontario Ltd., noted Sherry Head, an auditor in the CRA’s charities directorate.

“There is no evidence provided during the audit to support any of the services allegedly provided by these corporations were provided to the organization,” Head reported April 10, 2012 to Trinity.

She noted the $7 million invested in Ciccone’s firm was lost when it went bankrupt, as the Ontario Securities Commission (OSC) charged him with fraud and with misleading investors and securities regulators relating to $19 million.

“In the end, the poor decisions of the board, which appear to be more in support of its directors’ financial position than the pursuit of its charitable purpose, resulted in the organization losing these funds,” the auditor said.

She said it appeared Trinity had “structured its affairs for the private benefit of (tax shelters and) . . . its promoters and its directors.”

The fateful decisions to invest with Ciccone were made at meetings of the Trinity board in December 2008 and January 2009, when Ciccone declared an interest and stepped aside to have Fontana chair the meetings and call the votes to do so.

Also in the court file is a fateful September 2010 letter from Ciccone to Trinity saying: “We regretfully inform you that we are unable to pay out the interest due and the principle (sic) at this time or in the future.”

In its defence, Trinity lawyer Milot argued in court and in written submissions the foundation had felt it “prudent” to invest with Ciccone because the return promised “would have allowed the foundation to properly fund its other programs.”

“Any suggestion that Ciccone Group Inc. and the foundation were working together in this alleged (OSC) fraud is completely unfounded,” Milot wrote.

In fact, he said, Trinity has helped the RCMP, which has investigated Ciccone and Ciccone Group and will continue to do so.

“The current status of the investigation is confidential,” Milot advised court.

Milot noted Trinity was among 170 creditors of the Ciccone Group.

THE CASE AGAINST TRINITY

The federal tax collector never made public its beef with Trinity Global Support Foundation.

But when Trinity challenged the CRA’s move to lift its charitable registration in the federal court of appeal, the CRA’s audit and letter of revocation were put on the public record.

In the end Trinity lost its legal challenge of the CRA decision, but left behind in court several books of documents, correspondence and other material filed by lawyers on both sides of the dispute.

Five areas of “non-compliance” with Canada’s charity law were outlined by the agency in an April 10, 2012, letter to the charity. They were:

- Failure to devote resources to charitable activities.

- Failure to accept valid gifts.

- Failure to issue tax receipts according to the rules.

- Failure to maintain or provide adequate books and records.

- Failure to file an accurate charity tax return.

The CRA further alleged Trinity spent too much on fundraising and to tax shelters, noting “fundraising is not a charitable activity.”

Trinity’s lawyer, Duane Milot, argued losing its registration was too strong a penalty but Justice David Near upheld the CRA action in yanking the Trinity designation.

Milot said without being able to issue receipts, the foundation would run out of money and shut down in nine months.

And he said he expects to appeal Trinity’s loss to the Supreme Court of Canada but will need permission from the court to do that.

ABOUT TAX SHELTERS

- Such organizations may, or may not, be registered with the Canada Revenue Agency (CRA).

- They work with charities, and charge them a fee, to distribute things such as pharmaceuticals, educational software and other gifts.

- The value they place on donated items produces further receipts to charities, drawing the ire of the CRA which says the value of goods is often inflated.

- Donors are often provided with another receipt reflecting a higher value of the gift.

- Shelters promote themselves to donors as a way for donors to avoid paying taxes.

- For Trinity Global Support Foundation, an advertisement by a London financial agency touted that a $500 donation could produce $27,000 in tax receipts.

- The CRA said in court documents that Global Learning Gifting Initiative, the last of three tax shelters with which Trinity partnered, was a “sham” donation program with inflated values.

- The CRA has warned that donations to tax shelters will be audited.

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twitter.com/ChipatLFPress

The whole country is full of corrupt politicians ... The cesspool known as Ontario is loaded with corrupt politicians, I'm pretty sure politicians have a corrupt gene ... At the very least their from the shallow end of the gene pool. Think about how good you got it today ... Because I'm pretty sure 5 years down the road 75 % of the population will be worse off than today.