Charity case: overtly politicized, often brazenly partisan, environmentalist charities are flouting the law. Is anyone paying attention?

With 18 honorary doctorates behind his name, David Suzuki doesn't take kindly to being challenged on his facts. Sometimes, though, Suzuki--voted one of the 10 Great Canadians by CBC viewers--gets it wrong. In early March, when TV host Mike Duffy asked Suzuki about the propriety of his environmental charity sponsoring a crosscountry political campaign, the response was curt: "Everything we do or do not do is political," Suzuki answered. "The question is whether it's partisan. That is what determines whether or not you have a charitable status."

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But that's not what the law says. Section 149 of the Income Tax Act (ITA) states that an organization established for a political purpose cannot be a charity. Under the ITA, a charity is allowed to devote up to 10 per cent of its resources to political activity, but only as an incidental addition to the charity's work. Adam Aptowitzer, a lawyer specializing in charity law with the Ottawa-based firm Drache LLP, calls this the "10 per cent rule." "But even within that 10 per cent, charities can never, ever be partisan," says Aptowitzer, who serves on the executive of the Ontario Bar Association's charity and not-for-profit law section.

Suzuki's ignorance of the law is not unusual, especially for left-of-centre charities accustomed to lenient scrutiny by politicians and the media alike. Many charities work in the political arena, engaging in partisan activity, complimenting or condemning politicians and parties as they see fit.

In 2005, for example, according to its tax return, the environmentalist Schad Foundation gave $500 to the Liberal Party of Ontario, through the Ontario Liberal Fund. The donation is a violation of the ITA, which states that permissible political activities "do not include the direct or indirect support of ... any political party. Aptowitzer believes Schad's donation "is certainly a violation."

Moreover, Ontario law forbids political parties from accepting donations from a registered charity. Section 16 of Ontario's Election Finances Act specifically states that "contributions to parties ... may be made only by corporations that are not registered charities." The Ontario Liberal party did not report the contribution on their 2005 financial statement to Elections Ontario. And even the party's own rules prohibit it from accepting donations from charities. "The Ontario Liberal Fund does not accept donations from registered charities," reads the party's website. The Schad donation would indicate otherwise.

Besides, the year that donation was made, the Schad Foundation had a registered lobbyist in Ottawa whose sole responsibility was to push lawmakers to implement the Kyoto Protocol. Lobbying a public official would certainly be considered political activity, Aptowitzer says. But on their 2005 tax return, the foundation reported it wasn't involved in any political activity whatsoever.

Robert Schad, founder of the Schad Foundation, is also chair and founder of another environmental group, Earth Rangers. Earth Rangers received $26,522 from the federal Liberal government in 2005, meaning that in the same year another of Schad's charities was giving money to the Liberals, this one was getting money from them.

Donations to political parties may be the most obvious violation of charitable laws, but other breaches by major charities occur almost daily. The David Suzuki Foundation, for instance, one of the most well-known environmental charities in the country, is often political and partisan.

In late February, the foundation's cross-country campaign visited a Calgary elementary school. Suzuki fired a political broadside at Prime Minister Stephen Harper: "The only thing he cares about is getting re-elected with a majority government ... He has never, ever indicated he cares about the environment ... It's up to your moms and dads to ensure your futures and livelihoods are part of the agenda," Suzuki said, urging the children to tell their parents to vote against the Conservatives. Days later, Suzuki said to Mike Duffy, "Let's face it, Mr. Harper does not have a track record on the environment." According to a September 2003 CRA advisory sent out to charities, "a charity must not single out the voting pattern on an issue of any one elected representative or political party."

Even though they're granted a 10 per cent window for political activity, some charities paint themselves as completely apolitical when clearly they're not. In 2005, for instance, the Sierra Club of Canada answered no on its return, to the question, "Did the charity carry out political activity?" But in December of that year, then executive director Elizabeth May, now Canada's Green party leader, advocated, on behalf of the Montreal Action Plan, for an agreement to make cuts in greenhouse gas emissions. "We've been in negotiations, as you know, right through the night, and at 6:17 this morning [then environment minister Stephane Dion] brought down the gavel on a set of agreements that may well save the planet," she said. Thomas Bray, founder of the watchdog group Environmental Watch, says May's comments are certainly political, if not overtly partisan to the Liberal party. "I think she was in violation of the law. She lied to the Canadian public," Bray says.

In fact, the Sierra Club has told the CRA that it has never entered into political activity even once from 2002 to the present day. But in 2005, May spoke in favour of the federal budget, saying, "I think this budget and the focus on Kyoto implementation shows a shift in government thinking, a much more serious approach, a much more far-sighted approach." In 2003, she told the media she was giving the Liberal government "an A" for its "commitment to greenhouse gases." In 2002, she called a Liberal bill "a political miracle" that "shows that democracy works sometimes."

Other times, charities leave their tax returns incomplete, admitting that they were political but failing to disclose how much and in what capacity. In 2005, for example, the environmental organization Canadian Society for Promoting Environmental Conservation answered yes on its tax return to the question, "Did the charity carry out political activity?" But where the return asked what amount the charity spent on these activities, the CSPE answered with a blank. The same thing occurred in 2004, except this time even the list of non-political expenditures fails to add up. That year, CSPE reported $115,916 in expenditures. But in its breakdown of these expenditures, the group disclosed $55,543 worth of charitable programs; $35,494 worth of management and administration; and $14,879 worth of "other." But these figures add up to only $105,916, $10,000 less than the total expenditures given.

How are charities operating this way openly? Most of them simply don't know about the rules, says the CRA's national spokesperson, Jacqueline Couture. "Often the charities haven't filed their tax returns, and they're often small, run by individuals." But this explanation cannot justify violations by the Schad Foundation and the David Suzuki Foundation, both large-scale charities run by high-profile activists. Toronto-based lawyer Terrance Carter believes the CRA simply doesn't check charities' tax forms unless a complaint is brought to its attention. "When charities send in their annual returns, it doesn't actually get reviewed and approved by the CRA; it's simply there in the record system unless they're being audited," says Carter, a member of the CRA's charity advisory committee.

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Whatever the reasons, sometimes charities are simply political organizations that have been granted charitable status. Alternatives, a radical activist group based in Montreal, makes no effort to hide its political orientation. According to its website, its mission is "advocacy of pro-social policies"--as close to a definition of lobbying as exists. Marie-Helene Bonin is Alternatives' executive director, fresh from a stint as head of the Africa programs for the Canadian Labour Congress. Alternatives' website features an article on the crime of "Privatizing Iraq's Oil"; boasts essays in favour of Fidel Castro, Venezuela and the former Soviet Union; and proudly declares that "Alternatives was active in the movement against the American-led invasion of Iraq." In 2006, Alternatives received more than $130,000 from Canadian provincial and federal governments, and reported it was involved in no political activity whatsoever.

Some charities' advocates argue that placing restrictions on charities in the first place is the real problem. "If you're a charity working in poverty," says former NDP leader Ed Broadbent, "you should be entitled to directing your resources to helping the poor directly, if you want, through advocacy--through changing the social and political circumstances that gave rise to that poverty." Broadbent chaired an independent panel on the accountability and governance of charities for the Voluntary Sector Forum, a network representing non-profit organizations and charities. He believes that as long as charities are open about how they spend their funds, they should be allowed to spend money however they want, including in the political arena, provided they aren't partisan. "Other democratic countries allow their charities to get involved in the political arena," says Broadbent; "there's no reason to muzzle them undemocratically, as we do."

But as it stands now, politicized charities are illegal. In response to bald-faced partisanship amongst leftist charities, watchdog groups have popped up to fill the gaps.

One such organization was Charity Watch, headed in the 1990s by a Toronto-area man, George Barkhouse. Barkhouse referred dozens of left-wing groups to the CRA, which were audited, and, in the case of the Friends of Clayoquot Sound, shut down. Charity Watch was seen by some as performing a valuable service, but that's not how the CBC saw it. The government broadcaster devoted an episode of its late television investigative program Disclosure to Charity Watch in 2001, but instead of focusing on Charity Watch's relevance, the show focused instead on Barkhouse himself, portraying him as a far-right reactionary. Environmental Watch's Bray says he isn't surprised Charity Watch disappeared soon after. "They really did a hatchet job on him," Bray says. "Nobody can find Barkhouse now."

Whatever happened to Barkhouse, the Canadian charity world is brimming once again with left-wing activists engaging in political activity. And with the environment now such a partisan issue, we're bound to see more of it as Canada lurches towards a federal election.