On Thursday, the mayor's charity, Trinity Global Support Foundation, had its day in court to explain to a federal judge why it should not suffer the same fate as its predecessors that aligned themselves with tax shelters, i.e. to lose the ability to issue tax receipts. After all, there appears to be a demand for those receipts. In fact, Trinity had issued $152M worth of them in 2011, a significant increase over the $72K issued when Fontana joined the board of directors only three years earlier.
The mayor himself wasn't present at the hearing in Toronto but his son, Ugo, the president of Trinity, managed to get there along with co-director Dave Broostad. I too missed it being occupied elsewhere, but I found Chip Martin's account in the London Free Press interesting and informative.
The charity was represented by Duane Milot who opened his own “boutique tax advisory and litigation firm” a year and a half ago. Milot acknowledged that Trinity Global had “made mistakes” but they were being corrected and to shut down the private charitable foundation at this point would mean that young children would go without food and food banks would be devastated. He thought a lesser penalty might be in order. But not the loss of the ability to issue tax receipts. Without tax receipts, donations would dry up. He had affidavits attesting to that. Trinity would have to shut down in nine months max. Thousands of school kids would go hungry.
The reference is, no doubt, to “Show Kids You Care” which claims to serve 135,000 children each week through its breakfast, lunch and snack program. Formerly, this program was known as the “Children's Emergency Fund” which lost its charitable status in 2009 for “a failure to devote resources to charitable activities”. Trinity Global Support Foundation retained the administrators of that program; it continues to operate under the new name and direction.
What “Show Kids You Care” actually does is hard to ascertain. Since it is a program, rather than an independent charity, it doesn't file separate financial statements although it does have its own website.
That website lists 667 partners, four of which are in the London area: Prince Charles Public School, Thames Secondary School, The Boys and Girls Club, and Western Area Youth Services (WAYS). But according to previous investigations by Chip Martin, WAYS did not receive the $900,000 that Trinity claimed on its tax return; it merely received some licences for computer courseware. The executive director of WAYS was shocked that those 200 licences, only a quarter of which were ever used, could possibly be evaluated at nearly one million dollars.
It's even more doubtful that they could be traded for food for growing kids. So who does get food, or money for food?
Last summer, Trinity Global Support Foundation issued a news release: it was donating $10,000 to the Bethel Community Church in Boyle, Alberta for its food bank. The money would be used to buy food and deliver it to needy families in Boyle and throughout the Athabasca region, claimed Ugo (Joe Jr.) Fontana who issued the release.
A food bank is not one of the programs that the church lists on the Canada Revenue Agency website when reporting on its activities. It seems to be more focused on faith healing. And there was no mention of the Bethel Community Church on the Alberta Food Bank Network Association which lists the Boyle Food Bank as one of its participants.
But the Bethel Community Church does have a website of its own.
It's a curious website. On its homepage, second paragraph down, it touts its new computer courseware training program, “A Learning Community Network”. That's the same program that Trinity Global as part of it partnership with the tax shelter, Global Learning Gifting Initiative, promotes to investors and recipients alike. It's the one that was donated to WAYS and evaluated for receipt purposes at $900,000. In this case, it would seem, the valuation was at $10,000, perhaps for far fewer licences, but still, it's highly unlikely that these licences could be traded for groceries.
Just what is a church doing in the computer-training business as its main service, I wondered. Maybe it's just an interest of the minister.
The minister for Boyle Bethel Community Church is Richard Given. He hasn't been there long—just arrived at the end of July, 2011 from Kitchener.
That's the city that originally housed Trinity Global Support Foundation when it was set up in 2007 by Vince Ciccone at an address that also housed Ciccone's group of investment companies. The following year he invited his old friend Joe Fontana to join him as a director on the board of Trinity and soon made him president.
But Ciconne was running into problems with the Ontario Securities Commission so late in 2010 he left the board of directors of the charity taking with him $6.5M that Trinity had invested in his group of companies and then declaring bankruptcy. This investment, apparently, was one of the “mistakes” made by Trinity, according to its own statements at the appeal hearing.
Fontana had, in the meantime, recruited his son to take over as president of Trinity while he himself replaced Ciccone as chairman of the board of directors. The business was relocated to London.
There's not much information about Richard Given on the internet. He claims he came out of retirement to assist the Bethel church after it had gone through “almost a decade of regression” in what he calls “ungodly religion.” I have no idea what that means but apparently courseware training offers a new direction. Previously, he was with Vineyard Canada, a neocharismatic evangelical Christian denomination, and also spent some time with Global Awakenings, a faith healing charismatic movement.
Given also has some interest in taxation as witnessed by a letter to the editor of an online newspaper, the Morning Post Exchange, in response to an article on tax havens. In it, he decries the bureaucrats who define the “abusive” use of tax havens and charges CRA with being an illegal agency.
He's not alone in this preoccupation with money and religion. Although no longer allowed to trade in securities and although the investors he betrayed have despaired of ever seeing a nickel of the $15M he owes them, Trinity founder Vince Ciccone has been busy making videos giving people “free” opportunities to reduce their taxes by creating home businesses and observing the “Biblical Principles of Finance”.
What any of this has to do with feeding hungry kids is difficult to grasp. But it's not to hard to figure out that $152M removed from taxable income means one of two things: either someone else will have to step up to the plate and make up for the difference or government-funded programs will be cut.
Although much of the $152M may be notional rather than actual, and many of the tax rebate claims will be rejected by CRA, Trinity Global does provide handsome benefits for some. They are obviously not anxious to give them up. And even if the judge decides to uphold CRA's determination to shut down the foundation, there's no guarantee that, as long as tax havens exist in Canada or elsewhere, it won't simply morph into something else.