Canadian Mosque Charity Found To Have Terror Ties

From Global-News:
A charity that runs a Vancouver-area mosque has been penalized by federal regulators after an audit found its former president and imam spent tens of thousands of dollars on personal purchases including a spa, jewelry, video games and hair dye.

The Canada Revenue Agency audit of the Islamic Society of British Columbia also alleged the charity was “controlled or influenced” by a Qatar organization accused of supporting terrorism, although that did not result in a penalty.

The Islamic Society operates the Masjid Al-Hidayah and Islamic Cultural Centre in Port Coquitlam, B.C., and was formerly headed by Saadeldin Bahr, who is now serving a 3-1/2-year prison sentence for a 2013 sexual assault at the mosque.

CRA documents obtained by Global News allege that during the period covered by the audit — Oct. 1, 2010 to Sept. 30, 2013 — Bahr made purchases with his personal credit cards and reimbursed himself with online bank transfers from the charity accounts.

Using this method, he bought a $5,000 “evolution spa therapy,” the CRA said in a letter detailing the audit results that was sent to Bahr and three other directors in June 2016. Auditors said the shipping address for the spa appeared to be Bahr’s home address.

He also bought dish sets, flowers, groceries, pharmacy items, air travel, restaurant meals, car parts, car washes, gas, dry cleaning, a food processor, PlayStation games, an iPad and an iPhone, the CRA letter said.

Although some expenses for which he was reimbursed seemed legitimate, most “appeared to be for personal use,” the letter said. The CRA said they amounted to an “undue benefit” to a board member totalling $127,000 and accused the Society of failing to devote its resources to charitable activities.

The audit documents released by the CRA further said the Sheikh Eid Bin Muhammad Al-Thani Charity Foundation (Eid Foundation) in oil-rich Qatar had “maintained some level of control or influence over the affairs” of the B.C. charity.

“The organization’s connection to and possible control by the Eid Foundation is particularly concerning given that publicly available information … indicates that the Eid Foundation is alleged to have provided support to terrorism,” the CRA Charities Directorate wrote.

“Our research indicates that the Eid Foundation is a member organization in the Union of Good, a global coalition of Islamic charities operated by Hamas, a listed terrorist entity in Canada,” read the letter.

In May, the CRA said in a “Notice of Penalty” letter that while it had initially proposed a $126,000 penalty for Bahr’s spending, it had decided not to follow through after the Islamic Society said it would remove him from the board and improve its internal controls, financial oversight and record keeping.

But the CRA did impose a $9,000 penalty against the charity for issuing $182,000 worth of donation receipts that were deemed “not compliant.” The letter said the penalty could be paid to another registered charity.

No penalty was imposed in relation to charity’s “relationship” with the Qatar group. The Islamic Society’s lawyer, Sebastian Elawny, said the CRA had found no wrongdoing and was satisfied with the charity’s reply to the allegations.

“The organization’s response was clear and the evidence was unequivocal in proving that the organization was not involved in any activities involving terrorism. Had there been any shred of evidence supporting a terrorist financing claim, the CRA would not have permitted the organization to continue to be designated as a registered charity,” he said.
One of four organizations listed on the CRA website as “penalized,” the Islamic Society of B.C. built a mosque with a gym and underground parking that opened in 2003. Recent visitors have included Christy Clark, when she was the B.C. premier, and local MP Ron McKinnon, a Liberal member of the Standing Committee on Justice and Human Rights. McKinnon’s office said the MP was unaware of the CRA audit and did not know about the sexual assault case against Bahr until July 2016.

“The main issue probably was the personal expenses of the person that was running the organization being mixed up with the organizational expenses,” said Mark Blumberg, an expert in non-profit and charity law who reviewed the CRA documents.
He said the CRA had also expressed concerns about possible terrorist links.

“Canadian charities have to be scrupulous and careful that when they’re dealing with foreign partners that they avoid any even perception that those organizations could be involved with a terrorist organization,” said Blumberg, a partner at Blumberg Segal LLP.

The allegation that the Eid Foundation was “directly involved” in the affairs of a B.C. charity has emerged as Qatar is under diplomatic pressure from its Arab neighbours for allegedly bankrolling groups spreading extremism in the Middle East.

In June, the governments of Saudi Arabia, United Arab Emirates, Egypt and Bahrain closed their borders with Qatar and placed dozens of charities and individuals on a terrorist list. The Eid Foundation was among them, the Gulf News and Al Arabiya reported.

Also listed was an alleged Eid Foundation co-founder and ex-board member, Abd al-Rahman al-Nuaymi. The United Nations has identified him as a key financier of Al Qaeda in Syria and Iraq. The Eid Foundation said Nuaymi had not served on its board since 1999.

The Canadian charity’s relationship to the Eid Foundation was one of several areas of possible non-compliance raised by the CRA in its 32-page “preliminary findings” letter. The letter said the Islamic Society’s records “indicate that a 2005 agreement was signed between the organization and the Eid Foundation.” Documents mentioned that two board members would be “from Qatar,” the CRA wrote.

“The organization’s records refer to the Eid Foundation as ‘our board members and partners,’” according to the CRA letter. Ali Al Suwaidi, an Islamic Society board member between 2006 and 2010, “appears to be a representative of the Eid Foundation,” the CRA wrote.

The Eid Foundation was “in control of employing” an Islamic Society imam, Ayman El Najjar, the CRA wrote. El Najjar is no longer the mosque’s imam and filed a civil suit against the Society in 2012. The Society responded in court documents that El Najjar was “employed by the Sheikh Eid Charitable Association” to be the mosque’s imam, but that there were complaints he “preached an extremist doctrine” — an unproven allegation he denies.

The CRA said the Eid Foundation began contributing financially to the Islamic Society in 2005. During the period covered by the audit, the Qatar group transferred almost $80,000 to the Islamic Society, the CRA said. Auditors also found transfers in February and July 2010 of $68,000, which the CRA said showed “an ongoing pattern of funding from the Eid Foundation.”

The Islamic Society denied any “affiliation or relationship” with overseas groups, and said it had only used the Eid Foundation to transfer money to Canada due to banking restrictions in Qatar, the CRA wrote.

But the CRA said it found no such restrictions and that documents reviewed by auditors indicated the relationship “goes beyond the facilitation of fund transfers” and that “the Eid Foundation was directly involved in the organization’s affairs.”

The CRA wrote that its concerns about the ties with the Qatar group were “heightened due to the organization’s misrepresentations to the CRA on this relationship and in light of the funding it received from the Eid Foundation.”

“Registered charities should conduct meaningful due diligence on all aspects of its operations, including relationships with its affiliated organizations. This would include ensuring that a charity does not operate in association with individuals or groups that are engaged in terrorist activities or that support terrorist activities,” the CRA wrote.

The Eid Foundation did not respond to emails. A statement on its website said that “under no circumstances” would it finance groups designated by Qatar or the UN as terrorists. The Qatar Embassy in Ottawa said in a statement the country did not support terrorism, which it called “antithetical to our values, our principles and our faith,” and that any funding to Palestinians was done through the UN.

An earlier embassy statement called the allegations of its Arab neighbors about Qatari charities baseless. “Qatar is a proactive member in the fight against terrorism and the drying up of its sources of funding,” it said, noting the country hosted the central command of the international coalition against the so-called Islamic State.

Outside the Al-Hidayah mosque on Friday, one worshipper said it was “not cool” that donations might have been improperly spent.

“It’s not right,” said Samira Jahangiri. “Of course. I don’t want it to go to a hot tub. I want it to go to people who need it and it will be nice to know for sure what happened to the money.”

The CRA said Bahr had “full control and discretion” over charity operations during the audit period. In addition to the $127,000 in alleged personal spending, auditors said they were unable to verify that another $74,000 in bank withdrawals “relate to the organization’s expenses.”

In 2013, Bahr was charged with sexual assault but continued to serve as a board member. The CRA said his June 2016 conviction made him ineligible to serve on the board and that he had been removed. He was sentenced in May 2017. The Correctional Service of Canada said he had declined to comment on the audit.

Elawny said in a statement the CRA had “conducted a rigorous review of the organization, including its objectives, activities, financials and management and determined that the evidence was conclusive in proving that the organization was operating for exclusively charitable purposes and was involved in no wrongdoing.”

“The CRA further concluded that the administrative steps already taken, or required to be taken, by the organization were sufficient to ensure continued compliance with the charitable regime in Canada.”

The CRA said it could not discuss specific charities for confidentiality reasons but that revoking a charity’s registration was a last resort.

“Generally, the CRA will consider allowing a charity to maintain its registered status if the CRA is satisfied that the charity has put in place appropriate mechanisms and taken adequate steps to reduce risk and protect its beneficiaries and assets,” said CRA spokesman Patrick Samson.

Blumberg said there were about 86,000 charities in Canada and the CRA revoked the status of 20 to 30 each year. The department has been increasingly taking an “education first” approach, he said, meaning it tries to encourage charities to improve their practices, sometimes using penalties and suspensions.

“I would argue that we probably would have a better charity sector if instead of 20 charities a year they got rid of 40 or 50,” he said. “I think certainly they can take a harder line in some of these cases where there is more extreme problems.”

“On the other hand, the CRA is trying to essentially enable charities, help charities, and as long as the charity is trying to do the right thing, certainly there isn’t going to be a revocation from CRA.”

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