Canada Revenue Agency (CRA) announced that it has revoked the charitable status of Muslim Brotherhood front group Islamic Society of North America (ISNA) Development Foundation, after an audit of its books produced evidence linking it to Pakistani terrorists.
“The Government of Canada has made it clear that it will not tolerate the abuse of the registration system for charities to provide any means of support to terrorism,” said a CRA press release.
ISNA Canada is finished as a charity. According to the CRS, this means it “can no longer issue donation receipts for income tax purposes and is no longer a qualified donee under the Income Tax Act. The organization is no longer exempt from income tax, unless it qualifies as a non-profit organization, and it may be subject to a tax equal to the full value of its remaining assets.”
The CRA, which is the Canadian equivalent of the IRS, issued the 71-page “letter of revocation,” after auditing two years’ worth of activity that took place from Jan. 1, 2007, to Dec. 31, 2009. Complete with flow charts, it detailed funding transactions between ISNA Canada and the Kashmiri Canadian Council/Kashmiri Relief Fund of Canada (KCC/KRFC), a group the CRA considers non-qualified donees under Canada’s Income Tax Act.
The CRA believes ISNA Canada did this for the purpose of relinquishing control of the funds to the KCC/KRFC, who in turn sent money to the Pakistani-based Relief ISNA Development for Kashmiri Muslims (ROKM) for ostensible “relief work” in Kashmir. ISNA Canada supplied official donation receipts to the donors, while it disbursed more than $280,000 to ROKM, either directly, or via KCC/KRFC.
The CRA said the ROKM is the charitable arm of the Jamaat-e-Islami, a political group that contests the legitimacy of the Indian government’s control over the state of Kashmir, to the point of advocating secession. ROKM’s efforts includes activities perpetrated by its armed wing, the Hizbul Mujahideen. The Council of the European Union considers the Hizbul Mujahideen a terrorist organization as does the Government of India, Ministry of Home Affairs, which cites Unlawful Activities (Prevention) Act of 1967 as the basis of that designation.
The foundation “facilitated the transfer of resources that may have been used to support the efforts of a political organization . . . and its armed wing,” the CRA said in a letter sent to ISNA Canada. “Canada’s commitment to combating terrorism extends to preventing organizations with ties to terrorism from benefiting from the tax advantages of charitable registration,” it added.
Acting ISNA Canada president G. Nabi Chaudhary disputed the CRA’s contentions. “The money did not go to any groups who were freedom fighters,” he insisted. “We made sure that all of the money the charity sent to those organizations was spent on the needy, to help the misplaced. We had people on the ground who were working with the relief organizations.”
ISNA Canada board members contradicted Chaudhary’s assertions. “Once the money left Canada, (the foundation) had no control over the money, how it was spent or what it was to be spent on,” board members said, according to the CRA.
The CRA is conducting other audits of charities affiliated with the Islamic Society of North America Canada. Their efforts were precipitated after a 2011 investigation conducted by Star, a Canadian newspaper, revealed that ISNA mismanaged more than $600,000 in charitable contributions earmarked for the poor. An audit showed that of about $810,777 collected over four years, only $196,460 aided the poor.