Asking some fair questions of Tides Canada
GARY MASON,Globe and Mail, May. 10, 2012
For more than a year now, officials from Public Works Canada have been frequent visitors to a blog being kept by North Vancouver researcher and writer Vivian Krause.
It is her work that has ignited the federal Conservatives’ interest in the foreign funding of environmental groups in Canada. Ms. Krause was the first to raise concerns about the activities of a registered Canadian charity known as Tides Canada.
The Vancouver-based organization acts as a distribution centre, of sorts, for foreign donors that want to donate in Canada but don’t have charitable status. It funds environmental groups, many of whom oppose oil-sands development and ventures related to it such as the proposed Northern Gateway pipeline project.
This week, it was revealed that the federal government is auditing Tides Canada. In fact, the probe has been under way for more than a year, which perhaps explains why officials from Public Works – which includes the Canada Revenue Agency – have been poring over information obtained by Ms. Krause mainly through U.S. tax returns.
Under federal guidelines, registered charities are allowed to spend no more than 10 per cent of their revenues on what can be considered political activity – and it must be related to their charitable purpose. Tides Canada president Ross McMillan is confident the audit will find no wrongdoing.
On her Fair Questions blog, Ms. Krause has drawn a potential link between Tides Canada and Vision Vancouver, the civic party led by Mayor Gregor Robertson. Mr. Robertson is a former director of Tides Canada. His chief of staff, Mike Magee, was a senior adviser to the organization at one time. Most notably, one of the mayor’s most important donors and key advisers, Joel Solomon, is vice-chair of the organization.
Ms. Krause has shown more than $60-million (U.S.) flowing from U.S. foundations to Tides Canada. She has also revealed $8.7-million going from the Endswell Foundation to Tides Canada, which in turn has distributed funds to a labyrinth of investment companies and public-relations firms that have made significant political contributions to Vision Vancouver.
It takes the mind of a forensic accountant to follow the money trail, in some cases. Some of the information Ms. Krause has uncovered is perplexing and raises natural questions. When Vision Vancouver came to power in 2008, for instance, its biggest campaign donors were Renewal Partners – a small investment firm the president of which is Mr. Solomon – and Strategic Communications, a public relations firm also associated with Renewal.
U.S. tax returns indicate Endswell paid $2.3-million toward salaries at Renewal over a five-year period. Endswell has also indicated it contributed an unspecified amount of money to Strategic Communications.
It is Ms. Krause’s contention that Endswell, while legally a separate entity, is part and parcel of Tides Canada. Mr. Solomon is certainly connected to both operations.
Tides Canada has said repeatedly that it has not funded any political party or candidate for public office. And there is certainly no evidence to suggest it has. The question Ms. Krause has raised – and one the Canada Revenue Agency now seems determined to answer – is whether it has contributed to a political party indirectly using intermediaries and obscure means.
Where this all ends up remains to be seen, of course. How the public views the federal government’s recent moves likely depends on where a person stands politically. If you stand with environmentalists, than you no doubt see it as an ideological witch-hunt. If you stand with the government, you likely view it as a legitimate investigation into the activities of foreign-funded organizations that have received little scrutiny over the years.
Tides Canada has been audited before and emerged unscathed. This time, however, the Canada Revenue Agency would seem to have information it didn’t have before. We’ll see if it changes anything.
There’s a lot riding on it.
Terence Corcoran: BlackOutSpeakOut but first WhiteOut
FP Comment, Terence Corcoran May 8, 2012
The green charitable funding battle has only just begun, with every sign that the activist community is set to treat it as a life-or-death conflict. Leading the green forces against the evil Harper regime is a new coalition cleverly named BlackOutSpeakOut. Backed by the Sierra Club, Environmental Defense, Greenpeace, the Suzuki Foundation, West Coast Environmental Law and others, BlackOutSpeakOut aims to block Ottawa’s planned changes to Canada’s environmental protection legislation. A parallel objective is to stop what it refers to as the government’s “attacks on environmental charities.”
Since the Harper government clearly aims to adjust the balance of power in environmental regulation, we can certainly see their reasons for a new round of political activity. The effort is to be carried out by means as yet unknown, but darkly foreshadowed on their website. What is most striking, however, is the green movement’s rush to head off scrutiny of its charitable funding. Striking, but not surprising: Charities are where the money is that keeps green activism alive.
Some of Canada’s charities are also getting into protecting themselves from government attack. Imagine Canada, an association of Canadian charities, wants Environment Minister Peter Kent to name names to back up his charge that foreign money is being “laundered” through Canadian charities to fund the political campaigns of environmental groups. In a letter last week to Mr. Kent, Imagine Canada CEO Marcel Lauziere said the Minister’s allegations amounted to suggesting “criminal activity” and should be withdrawn. “If you have specific knowledge of improper or illegal activity by any individual organization, it is imperative that you provide details to the appropriate investigating authorities.”
Well, now. First off, this page has no idea what Mr. Kent had in mind when he spoke of the laundering of funds. He first used the word laundering in conversation earlier this month with Evan Solomon on CBC Radio and later on CBC TV’s Power & Politics. “Offshore funds have improperly been laundered, if you will — that’s a fairly accurate word — through Canadian organizations that have charitable status to be used in ways that would be improper given that charitable status.”
To which Mr. Solomon said: “That’s a criminal allegation.” It would appear that it was Mr. Solomon’s legal authority that led Mr. Lauziere of Imagine Canada to also accuse Mr. Kent of saying that charities are engaging in “criminal activity.” The Globe and Mail’s august editorial page followed the same line. Saying the government was running a “smear campaign” against charities, the Globe said Mr. Kent “has accused unnamed environmental charities of criminal activity.”
Some of these people should consult a lawyer, or at least look up the definition of money laundering, like this from the Auditor-General’s 2003 report on money laundering:
Canadian law does not define money laundering; rather the Criminal Code defines the offence of laundering the proceeds of crime; the code and other federal acts define the criminal activities that produce the proceeds of crime.… What makes these acts illegal is that the source of funds is from criminal activity and the reason behind the acts is to disguise their criminal origins.
So when Mr. Kent talks about “laundering” funds, he is not talking about criminal activity. Money laundering only becomes criminal if the source of the money is criminal, which is obviously not the case with the U.S. charities and foundations that are flowing hundreds of millions of dollars into Canada — although certainly many green activists would consider the funds accumulated by U.S. foundations from billionaire capitalists such as the Rockefellers to have been criminally obtained.
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In Mr. Kent’s usage, then, laundering is — as he put it — a fairly accurate word. But for the sake of cool-headedness and clear thinking, let’s try some others. How about greenwashing. Or perhaps a better one would be whitewashing. Whitewashing would certainly fit as a description of the activities of some U.S. charitable foundations that have granted hundreds of millions of dollars to Canadian environmental groups in recent years.
As Vivian Krause reports in an accompanying commentary, grant language is being reworked to make it less political. Within days of Ottawa’s March 29 budget outlining plans to review the activities of offshore charities in Canada, the U.S. Oak Foundation took down its very political anti-Gateway grant descriptions and replaced them with new, more neutral ones. The changes essentially whited out the political purposes of money going to Greenpeace, Forest Ethics, Tides Canada and others.
If Mr. Kent is looking for names to name, there are a few in Ms. Krause’s analysis to get him started.
Meanwhile, Tides Canada, the Canadian sister organization of the giant U.S. Tides Foundation—and a major player in funding green activism in Canada—announced the other day that the Canada Revenue Agency is auditing its status as a charitable organization. A Globe headline was quick to point the finger at the Conservatives: “CRA audits charitable status of Tides Canada amid Tory attack.”
The idea that the CRA audit is politically motivated — supported by NDP environment critic Megan Leslie — is itself a smear tactic. According to Ms. Leslie “it is hard not to see [the Tides audit] as politically motivated, based on the behaviour of this government.” She told the Globe environmental groups are facing a “witch hunt” by the Harper government determined to suppress dissent.
Over the years the CRA has audited hundreds of charities, on the left and on the right, in search of improper political activity. To conclude that either the Tories are behind the CRA move or that Tides Canada has broken rules would be wrong. But it would also be wrong to claim that such reviews are an attack on charities.
Vivian Krause: Damage control
Special to Financial Post May 8, 2012
Green charities rewrite grant descriptions in wake of budget
One of the big American charitable funders of environmental campaigns in Canada and the U.S., the Oak Foundation, has rewritten the publicly stated purpose of several grants to Canadian environmental groups. Three days after Finance Minister Jim Flaherty’s March 29 budget announced a review of political activity by charities in Canada, Oak said in a website posting that it had “modified and added additional content to some grants to reflect progress, lessons learned and achievements.” But the changes mostly remove aspects of grant descriptions that might draw criticism and regulatory attention.
Oak didn’t say which grants it recently modified. However, a comparison of Oak’s grants before and after the federal budget shows that Oak rewrote grants for oil sands-related campaigns to Tides Canada, ForestEthics, Greenpeace, and the West Coast Environmental Law Research Foundation. The value of the rewritten grants, awarded within the last two years, is more than $1-million.
Oak has offices in Washington, D.C., San Francisco and Europe. The foundation says that it was created by Alan Parker, one of the co-founders of Duty Free Stores. In 2011, Oak granted $158-million to 312 organizations in 41 countries.
Oak is one of the foundations that supports a U.S. strategy called “Design to Win,” in which voter and consumer campaigns are funded as a way to shift investment capital toward solar and wind energy and away from fossil fuels.
This isn’t the first time a U.S. charitable foundation has quietly tweaked multiple grants for a million-dollar campaign. Several years ago, the San Francisco-based Gordon and Betty Moore Foundation rewrote descriptions of four grants worth $3.6-million for a marketing campaign against farmed salmon. One $560,000 grant originally stated that the expected outcomes were “identification of anti-farming audience and issues, integration of aquaculture science messages into anti-farming campaign, standardization of anti-farming messaging tool-kit, creation of an earned-media campaign, and co-ordination of media for anti-farming ENGOs.” All that was deleted in the rewrite. Since 2003, Moore has granted a total of $93-million to organizations in BC. Of that, $30-million went to Tides Canada.
In all, at least 15 American foundations and environmental groups have rewritten or removed online information since I began tracking the U.S. funding of Canadian environmental campaigns.
The Oak Foundation’s recent rewrites are notable because of the timing — three days after Ottawa’s federal budget announcement — and because the changes significantly alter the stated objectives of the grants. For example, Oak rewrote its description of a grant for $97,131 to the West Coast Environmental Law Research Foundation. The rewritten grant omits a sentence which said, “The desired result [of the grant to West Coast Law] would be a permanent legislative tanker ban and cancellation of the Enbridge Northern Gateway pipeline.”
Oak also rewrote a $299,879 grant to ForestEthics. The project started in August of 2010 — more than a year earlier — so it seems a bit late to be rewriting the grant.
ForestEthics is not and has never been a federally registered charity in Canada. Instead, until earlier this year, ForestEthics Canada was part of Tides Canada, the sister organization of the U.S. Tides Foundation. U.S. tax returns show that in 2009 alone, Tides Canada paid $783,603 to ForestEthics Canada “for capacity building support.”
Originally, Oak’s grant to ForestEthics was for “creating a perception of economic risk, whereby tar sands imports become less attractive to U.S. corporations and, the Canadian government questions its unbridled support for expanded and unregulated development.” The rewritten, toned-down version says that ForestEthics is funded for “creating awareness” of economic risks rather than “creating perception.” The part about getting the Canadian government to question the Alberta oil industry is gone.
Oak’s original grant description also said that ForestEthics was funded to get at least one Fortune 500 company “to exert influence within the U.S. government to support regulations that will disadvantage Tar Sands fuel.” Those words have been removed.
Oak also rewrote a 2011 grant of $200,000 to Tides Canada to develop “A New Energy Future for Canada.” The original grant said that Tides Canada, which has charitable status in Canada, was funded “to develop a plan and a pathway to reduce emissions by 80% by 2050.” Oak also funded Tides Canada “to develop a compelling narrative and use it to sustain critical pressure and focus public attention,” but those details are now gone.
Oak also rewrote details of a grant for $424,373 to Greenpeace for a campaign called “Stop the Tar Sands,” a project that has been underway for more than a year. The original grant said that Greenpeace was funded to get Norway’s Statoil and BP to discontinue investing in the Canadian oil sands. In the rewritten grant, references to Statoil and BP are gone.
Oak’s original grant also said that Greenpeace was funded “to convince a total of 10 Alberta municipalities to support legislation for an Alberta-wide feed-in tariff.” In the re written version, there’s no mention of convincing 10 Alberta municipalities.
Oak’s original grant said that Greenpeace was funded “to create enough financial, regulatory and political uncertainty that prominent financial analysts will publicly state their concern about investments in the tar sands.” The rewritten version says that Greenpeace will “create awareness” of uncertainty in investments in the tar sands. Again, creating awareness and creating uncertainty are not the same; creating uncertainty hardly seems like a typical charitable activity.
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Other U.S. foundations that have removed or modified online information about environmental campaigns to thwart the Canadian oil industry are the Bullitt Foundation and the Rockefeller Brothers Fund Inc.
The Seattle-based Bullitt Foundation rewrote its description of a grant to the Dogwood Initiative, which calls itself “a team of 10 super-talented people, based in Victoria, BC.” Dogwood says that it “works with people in key communities throughout the province and the rest of the country.” Dogwood doesn’t have charitable status.
Bullitt’s original grant was $30,000 paid to the U.S. Tides Foundation for Dogwood “to mobilize urban voters for a federal ban on coastal tankers.” The problem here is that American charitable foundations aren’t allowed to mobilize voters in a foreign country. The rewritten grant says that the money was “to engage and educate citizens.” That rewrite came in December of 2010, days after I testified to a House of Commons committee about U.S.-funded campaigns that would thwart Canadian oil exports to Asia.
The Dogwood Initiative redesigned its website earlier this year. In doing so, Dogwood eliminated the Web page that listed its partners and supporters. Internet archives show that over the years, Dogwood has reported that at least seven U.S. foundations have supported Dogwood. These include the William and Flora Hewlett Foundation, the Gordon and Betty Moore Foundation, the Wilburforce Foundation, the Brainerd Foundation, the Bullitt Foundation and the U.S. Tides Foundation.
Within days of my Post op-ed, “Who is organizing for change?,” in February 2011, the Seattle-based Wilburforce Foundation stripped its website of all details for all grants. Wilburforce recently added a searchable database to its website, but beyond the title of the grant, the database no longer includes any details of the nature of the project.
Wilburforce was created by Gordon Letwin, one of the founders of Microsoft. Since 2000, Wilburforce has granted at least $24-million for environmental initiatives in B.C.
Until the spring of 2010, the Rockefeller Brothers Fund Inc. (RBF) reported at its website that it granted $50,000 to Tides Canada to develop a website about “Oil Sands Tourism.” RBF Inc. has confirmed by email that the website that Tides Canada developed with RBF funds is found at www.travelingalberta.com. This website makes a mockery of Alberta tourism. Originally, RBF reported that its grant to Tides Canada was “to increase pressure on Alberta policymakers…. ” After I started asking questions about RBF’s grants, RBF, like Wilburforce, removed a substantial portion of the detailed descriptions of its grants. Its website no longer says that RBF funded Tides Canada to pressure the Alberta government.
Several Canadian organizations have also removed revealing online information.
Days after I began asking Open Media about its funding, Open Media removed a Web page that said it received donations through Tides Canada. Open Media also removed an online comment about having mobilized 400,000 people to oppose a CRTC ruling. That comment was, “You’ve been part of the biggest online campaign in Canadian history! And you’ve moved politics!” A year later, OpenMedia.ca now says at its website that it has a donor-advised fund at Tides Canada.
By its own admission, People for the Ethical Treatment of Animals (PETA) has been using Tides Canada as a vehicle through which to receive charitable donations because PETA itself doesn’t qualify. “Head up, Canadians!” PETA wrote online, adding, “For your retirement account, and donations and bequests to PETA in general, you may want to consider giving through the Tides Canada Foundation-PETA Fund. Tides Canada is a registered charity, but PETA is not because of our advocacy work…. If Canadian tax credits are important, you can only get those benefits by making the beneficiary of your retirement accounts the Tides Canada-PETA Fund rather than specifying PETA.” Internet archives show that shortly after Tides Canada was asked by email about PETA’s comments, PETA removed this paragraph.
Living Oceans Society (LOS), based in Sointula, B.C., seems to have found another way of skirting Canadian rules on political activity. In a report contained in the 2001 tax return of the Bullitt foundation, LOS writes, “Living Oceans Society is currently applying for charitable tax status. We have been advised to refrain from posting action items on our Web page until this application has been approved as it could be interpreted as ‘political.’ In the meantime, we have met with a Web page designer and we are prepared to add this to our Web page when the timing is more appropriate.”
A spokesperson for the Canada Revenue Agency said by telephone that LOS began the process of becoming a federally registered charity, but didn’t complete it. Nevertheless, since 2000 LOS has been paid at least $10-million by U.S. foundations, U.S. tax returns show. LOS says at its website that it has a funding arrangement with Tides Canada.
The reasons behind the rewriting of grant descriptions may be many. For the most part, though, they appear to eliminate references to possibly inappropriate political activities for which Canadian environmental organizations were explicitly funded — the only type of political activity that charities are allowed to engage in are those that further a charitable purpose.
When numerous foundations systematically rewrite multiple grants for what appear to be million-dollar politically active campaigns, Canadian and U.S. government officials should investigate.
Financial Post
Vivian Krause is a Vancouver researcher and writer. Her blog is www.fair-questions.com.
On Twitter, she’s @FairQuestions.
