ISNA-Canada Charity involved in another controversy
by Sheila Musaji
The Star in Canada published a detailed article Star Investigation: Federal audit raises concern that Canadian charity funded terror. That article reports that it is alleged that the Canadian government’s charities watchdog “is now threatening to revoke the charity status of Mississauga’s ISNA (Islamic Society of North America) Development Foundation.” And that “A Canada Revenue Agency audit revealed the foundation shipped more than $280,000 to a Pakistan-based agency, cash the government fears went to supporting the Hizbul Mujahideen — a militant group that seeks the secession of Kashmir from India. 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 to the charity outlining its findings.”
The article details many allegations against (and denials of wrongdoing on the part of) ISNA-Canada and the ISNA Development Foundation (IDF). The article notes that:
... The taxman’s probes began after a 2011 Star investigation revealed ISNA Canada, a charity itself, mismanaged more than $600,000, using money donated to help the poor and needy instead on office costs.
At the centre of both controversies is Mohammad Ashraf, the long-time head of ISNA Canada and secretary of the ISNA Development Foundation. Current board members accuse him of running the charities like his own fiefdom, and say he kept other directors in the dark until he was forced to retire in 2011.
In March, ISNA sued Ashraf and two relatives, alleging he misappropriated $400,000 from the organization and used the money to buy his daughter a house. He has filed a defence denying any wrongdoing, claiming the suit is just the latest salvo in a “character assassination campaign” against him and his family.
During his 32-year tenure with ISNA Canada, Ashraf told the Star he never made decisions without approval from the charity’s president and board members. “This, and other accusations by the (ISNA Development Foundation) board, seem to come out of petty internal politics which seems to be ongoing but is not worth discussion,” he said in a written statement.
The ISNA Development Foundation was registered as a charity in 2005 to provide support to the poor and needy (indigent immigrant families in particular), community centres and places of worship throughout Canada. Under Canadian law, charities must pursue activities in line with their federally registered objectives.
The charity operates out of the ISNA Canada headquarters in Mississauga, where a graceful minaret towers over the nearby Queen Elizabeth Way.
The audit found a number of problems:
Nearly $180,000 of charity money was spent on the salaries and benefits of two employees whose duties were actually for the “exclusive benefit” of for-profit corporations.
The ISNA Development Foundation inaccurately reported financial information in its annual return, a record used by the CRA to ensure a charity is complying with the law. “There is significant harm associated with a deceptive or misleading statement, regardless of whether the charity’s conduct is intentional or negligent,” the CRA said in its letter.
The charity repeatedly flouted rules requiring it to spend donated money on activities carried out by the organization itself or qualified recipients (such as other charities.) The foundation dished out more than $535,000 to unapproved groups. More than half of that cash went outside Canada, despite the charity’s mandate to support domestic causes.
The CRA’s letter does not necessarily mean the charity will be shuttered. The government gives a charity a chance to respond to the audit before deciding whether to revoke its charity status.
The ISNA Development Foundation has responded to the government’s letter but will not share its representations with the Star.
“We want to enter into an agreement with (the CRA),” Chaudhary said. “The person who is responsible for (the problems) is no longer with the organization. We are working towards making everything accountable and transparent. It happened in the past.” ...
All of this is a real concern for Muslims in North America and Canada who are already concerned about which charities are responsible custodians of charitable donations.
Today, ISNA released the following statement:
ISNA Clarifies its Position on ISNA Canada
We at the Islamic Society of North America (ISNA) are saddened and disturbed by news of alleged misappropriation of funds by our namesake organizations in Canada. We understand that the Canadian government’s investigation is still ongoing and no conclusion has been reached yet.
ISNA Canada and Islamic Development Foundation (IDF) in Canada are federally registered charities in Canada. It is important to note that the leadership and management of both of these organizations in Canada are separate from ISNA and its IDF (a department of ISNA), registered in the United States. There have been no links of authority or responsibility between the United States and Canadian organizations for a few decades, despite the similarity of names.
The bylaws of the Islamic Society of North America (ISNA) do allow Canadians to become its members and elect an officer designated as vice-president (Canada) who sits on the executive council of ISNA, headquartered in Plainfield, Indiana. However, these members are individuals and have direct relationship with the Indiana-based ISNA and its IDF. No communication or relationship with them flows through the Mississauga-based ISNA Canada or its IDF.
The finances and financial records of ISNA, including those of its IDF, are maintained at its headquarters in Plainfield, Indiana. They are annually audited by certified public accountants, and annually published in its report to its members. The executive council and the board (Majlis ash Shura) of ISNA are fully committed to due diligence, transparency and accountability in managing all donations it receives, and to comply with all financial laws and regulations.
We do hope that the government investigation of our namesake Canadian organizations will soon conclude with whatever action that may be needed to restore the confidence of Canadian citizens in the worthiness of their charitable work.
The ISNA website lists its’ Board of Directors (Majlis Ash-Shura) as: Mohamed Magid, President; Azhar Azeez, VP-US, Mohamed Bekkari, VP-Canada; Kareen M Irfan, Faizul Khan, Chapter Members; S. Imtiaz Ahmad, Ihsan Bagby, Asad Ba-Yunus, Altaf Husain, Rizwan Jaka, Asma Mirza, and Muzammil Sidiqi, Members at large; Mohammad Alam Pres AMSE; Khalid Tarabain, Chairman Canadian Islamic Trust; Kem Hussain, CISNA; Mohammed Al-Shroof, President IMANA; Ali Fiaz, President MSA of US & Canada; Uzair Siddiqui, President MYNA, and Gaddoor Saidi, Chairman NAIT.
ISNA Canada also has a website, and they have also published a statement on this current controversy:
Re. Federal Audit raised concern that Canadian charity funded terror
Jesse McLean’s article in Thursday’s Star (July 25, 2013) is based largely on a letter from the Canada Revenue Agency (CRA) that makes speculative allegations about how ISNA Development Foundation (IDF) funds may have been used in Kashmir. IDF sent funds to Kashmir years ago with the intent of helping orphans and the needy. The CRA’s audit of IDF speculates on how those funds may have been used. Most troubling is CRA’s speculation that funds may have been used or diverted to militant groups in the region. Its letter says that IDF “may have, knowingly or unknowingly, extended the benefits of its status as a registered charity to fund the activities of an organization whose resources may be used…” [emphasis added] to support the efforts of a political organization and its armed wing. Your article fails to note that CRA’s letter relies extensively on the use of the word “may” without any proof that funds were in fact misused. In fact, the article’s headline itself uses the word “may”, i.e., “…may have ended up in the hands of violent militants.” Meanwhile, the audit continues and ISNA Canada will cooperate fully with the tax authorities as the organization has done since the audit began in November 2011. That said, we think it is unhelpful to cast aspersions about support for militant groups on a charity and the law abiding citizens that it serves based on pure speculation.
At this point, this is all that is known, and Canadian government audits have not yet been completed. As more becomes known, this article will be updated.