Original article by Dr. Miles Howe, Mondoweiss, Nov. 11, 2024
Full article below with three views (data, flow visual and bar chart)
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A look at five pro-Israel organizations that lost charitable status in Canada, and the mega-donors who funded them
The Jewish National Fund and Ne’eman Foundation aren’t the only pro-Israel organizations that have lost their charitable status in Canada. Here are the stories of five others and the mega-donors who funded them.
By Miles Howe November 11, 2024
The recent status revocations of the Jewish National Fund of Canada Inc (JNFC) and Ne’eman Foundation Canada suggest that the Canada Revenue Agency (CRA) has blinked first in the face of the International Court of Justice’s July 19, 2024, advisory opinion on the Legal Consequences arising from the Policies and Practices of Israel in the Occupied Palestinian Territory, including East Jerusalem. The two former charities had been involved for years – the JNFC, notably, since 1967 – in transferring Canadian taxpayer-subsidized charitable donations into the hands of Israeli intermediaries involved in undermining the territorial sovereignty of Palestine, specifically in East Jerusalem and the West Bank.
Extricating the Canadian charitable sector from its ongoing complicity with Israeli war crimes is, however, not a ‘one and done’ affair. Worth on average close to $280 million CDN per year in charitable donations (2018-2022), Israel is consistently the top, yearly, international recipient of Canadian benevolence. Canadian charity guru, Mark Blumberg, suggests that Canadian Jewish community-related charities are sitting on about $9.2 billion CDN in assets (2022), with upper echelon Jewish public and private foundations holding another $5 billion CDN. In perspective, stymying the internationally illegal operations of the JNFC and Ne’eman Canada, while meaningful, is but a drop in the proverbial bucket.
With an eye towards understanding both the recent, historical, movement of Canadian donations into Israel, along with identifying the origin sources of Canadian capital moving into the apartheid state, the following piece utilizes the Canadian Access to Information Act (ATI) to gather tax data surrounding trends in money movement from Canada to Israel. To be sure, there are gaps in the data, but what emerges is a picture of gangster capitalism, where charities run out of private residences, with no public profile, no website, and no outreach to speak of, handle tens of millions of dollars CDN per year tied to the Canadian Zionist billionaire class. While the billionaire class will undoubtedly prove resilient and sheltered in the face of exposure to their potential financial complicity in aiding and abetting war crimes, understanding the sources of their wealth yet still provides human beings with conscience with the possibility of retributive action.
Method
Charitable status revocations due to failed audits, which is what transpired with Ne’eman Canada and the JNFC, leave a paper trail – which includes the CRA’s investigative findings – that is accessible via ATI request. I first made an ATI request for a list of all charitable status revocations due to failed audits for Canadian charities that disclosed having moved money to Israel, between 2018-2023. This list, I hypothesized, would provide me with the names of Canadian charities that had caught the eye of the CRA, who had then subsequently been unable to explain away some type of serious transgressional activity.
With this list in hand, I excluded any charity that had moved under $500,000 CDN to Israel per year, on the grounds that they were financially irrelevant to the overall flow of charitable donations from Canada to Israel. I was left with five former Canadian charities, legally registered as Colel Chabad Lubavitch Foundation of Israel, Kupas Hachesed Meoroth, Chasdei Levy Yitzcok, Gates of Mercy and the Beth Oloth Charitable Organization. For each of these, I requested the CRA’s audit findings, along with the names of their overseas recipients in Israel, their board of directorate information, and the financial gifts these charities claimed to have received from other charities. Beyond understanding the means via which illicit donations had historically moved from Canada to Israel, this data would allow me to understand – to the degree that donor privacy restrictions would allow – where this money had actually originated from.
What follows, firstly, are brief synopses of the activities of the five revoked charities, followed by an analysis of the origin sources of these donations.
Colel Chabad Lubavitch Foundation of Israel
A CRA audit for the fiscal period of 2008-2009 uncovered that Colel Chabad had been selling official donation receipts to donors, for 10% to 20% of their receipted value. When it comes to filing one’s personal taxes, these receipts, it is important to note, have a value of upwards of 50% or more of the donated principle, meaning that Canadian charities actually create wealth. One of Colel Chabad’s clients, Dr. Lorne Wayne Sokol, gained notoriety for laundering money he had obtained by allegedly defrauding the Ontario Health Insurance Plan, through Colel Chabad. Sokol had incorporated a company in Belize, the Moshe Shmuel Deitsch Company, named for Colel Chabad’s self-claimed Israeli intermediary, Moshe Deutsch.
Through the Belizean company, Sokol (and potentially others) was subsequently repaid by Colel Chabad for between 80% to 90% of the principal they had donated to the charity. Colel Chabad appears to have netted 10% to 20% off the principle, while Sokol and other unnamed participants netted the value of a tax credit while recouping 80% to 90% of their Belize-laundered principle, meaning a net profit for donors ballparked at 130-140%.
Colel Chabad’s president, Abraham Neuwirth, would plead ignorance to the scheme. Colel Chabad’s secretary Zalman Zirkind, along with his brothers, however, were involved in a wider, international, narco-trafficking/money laundering scheme. In 2021, Zalman would be sentenced to 84 months’ imprisonment by a United States District Court for conspiracy to commit money laundering. Zirkind’s association with Colel Chabad, it should be noted, far outlived the charity’s exposure as a potential money laundering operation; he was listed as Colel Chabad’s secretary between 2000 until at least 2015, at which point the charity simply ceased updating its Board of Directors filings with the CRA.
Kupas Hachesed Meoroth
In 2018, the CRA informed Kupas Hachesed Meoroth (KHM) that it was unable to verify the validity of donations, totaling over $32 million CDN, receipted between 2014-15.
In a further investigation into KHM’s “wire transfer information”, the CRA determined that only $100,862 of the tens of millions of dollars CDN claimed by KHM could be verified as having been sent to Israel between 2014-2016. The regulator noted that: “the majority of the funds spent on foreign activities were actually given to individuals residing in Canada and cashed at Canadian bank accounts”. These funds, which totalled over $48 million between 2013-2016, had apparently been delivered to an unknown number of Canadian and American recipients in the form of hundreds of unique cheques, typically written out to an individual by first initial and last name only. In numerous instances, cheques made out to multiple addressees were cashed via a shared bank account.
KHM director Edward Binet (2007-2020) would defend the cheque cashing operation and claimed that the recipients deposited their cheques and then hand delivered millions of dollars in hard cash to (unnamed) recipients in Israel, who arrived in Israel by airplane. KHM, however, had no supporting documentation to suggest that the cash handovers had ever taken place. The entire situation forced the CRA to conclude that: “it does not appear that any charitable activity occurred, whether within or outside of Canada” and that “it appears the Organization is simply gifting funds to individuals and conferring an unacceptable private benefit”.
KHM’s charitable status appears to have been put on some kind of hiatus between 2017-2019; the organization did not file tax returns for this period. In 2020, KHM was operational for what appears to be three more years, into 2022, although tax filings for these years are incomplete. Binet, for his part, appears to have suffered no legal repercussions for having presided over KHM. As of writing, Binet remains the president of multiple, active, Montreal-based, charities, including ‘Congrégation Beltz’, which donated close to $2 million to KHM and another transgressional charity, Chasdei Levy Yitzcok.
Chasdei Levy Yitzcok
A 2018 CRA audit, undertaken for the fiscal years 2015-2016, determined that the Montreal-based Chasdei Levy Yitzcok (CLY) had demonstrated a widespread failure in issuing proper donation receipts and had failed to carry on its own charitable activity. Speaking directly to the charity’s direction and control over its sole Israeli intermediary, one Rabbi Israel Levy, the CRA would note that CLY could provide no documentation to “confirm any interaction” between the charity and its Israeli agent(s), or that the agent(s) actually “performed any work” for the charity.
The CRA determined that CLY had issued cheques, totalling over $2.7 million CDN, to several “foreign residents”, during the fiscal year of 2016. In certain instances, the CRA found that representatives of CLY were just cashing cheques they had written to themselves. Expanding their investigation to include the Canada Border Service Agency, the CRA determined that none of the foreign residents named as recipients by CLY had legally entered Canada within a five-year time span prior to the audit; the inference being that they had never received their cheques, let alone cashed them. These findings caused the CRA to conclude that in 2016, “over $2,700,000 of the Organization’s charitable resources were converted to cash without any documentary evidence to show that the funds were used in a charitable manner”.
Gates of Mercy and The Beth Oloth Charitable Organization
Originally registered as a charitable organization in 1991, Gates of Mercy operated as what I’ve termed a ‘burner charity’ and conducted minimal business up to 2007. In 2008, however, Gates of Mercy experienced a significant increase in activity, receiving total donations of over $5.4 million CDN. Over the next several years Gates of Mercy’s activity grew exponentially; between 2009-2011, it brought almost $47 million CDN in donations.
In 2012, Gates of Mercy experienced its first audit – for activities conducted between 2008–2010. The CRA’s audit found that Gates of Mercy had “failed to retain direction and control over the use of its funds,” and had no means to demonstrate or ensure these funds were being utilized for its own charitable activities. Gates of Mercy had also failed to keep “adequate books and records”, had “issued receipts not in accordance with the [Income Tax] Act” and had failed to “file an information return in prescribed format”.
Rather than trigger a criminal investigation, Gates of Mercy simply entered a compliance agreement with the CRA in 2012, signed by Shmuel Reidel, a director at Gates of Mercy. Reidel’s 2012 signing is an important data marker; while Gates of Mercy continued to move millions of dollars CDN in charitable donations per year offshore, the charity’s financial activity and total number of donors experienced a marked decrease, post-2011. Most donors – and their charitable donations – moved en masse to another Reidel-directed charitable organization, ‘The Beth Oloth Charitable Organization’.
Incorporated in 1980, CRA records show Beth Oloth largely inactive until 2012, just as Gates of Mercy entered into a compliance agreement with the CRA. Beth Oloth then experienced a massive uptick in reported revenue; the charitable organization took in over $9.4 million in revenue for the year. Revenue would skyrocket in the ensuing years: Between 2013-2014, Beth Oloth reported over $62 million CDN in received donations.
The CRA responded in 2016 with an audit of Beth Oloth’s 2011–2014 activities. As with Gates of Mercy, Beth Oloth was found to be non-compliant with the Income Tax Act on a variety of levels. The CRA also evinced concern that Beth Oloth was depositing cheques made out to Reidel and Gates of Mercy. Representatives from Beth Oloth would claim that Reidel no longer held a formal association with the charity and maintained an “advisory role” only. But the cross-writing of cheques between the two charities suggested to the CRA the existence of an undisclosed relationship or arrangement between the two organizations.
As for its charitable activities, between 2012-2014 Beth Oloth claimed that it had moved over $63 million CDN to a stable of thousands of international intermediaries, the vast majority of which were in Israel. While the CRA identified multiple instances where Beth Oloth’s self-claimed Israeli intermediaries were actively involved in supplying financial support to the illegal settlements and the IDF, the general conclusion was that the sheer scope of Beth Oloth’s operations were impossible to direct or control. The CRA revoked both Gates of Mercy’s and Beth Oloth’s charitable status in 2019.
Who is supporting these organizations?
With the general picture being of hundreds of millions of dollars CDN in uncontrolled charitable donations flowing from Canada into Israel, the next step was to understand the source of this money. The identity of individual private donors in Canada is protected by law. But the movement of donations to any Canadian charity from other Canadian charities is recorded and is publicly accessible. When such inter-charity donations emanate from private foundations, they can be traced back to their sources of private wealth.
With data received from ATI requests, I created a list of all charitable donations from other Canadian charities, received by the five revoked charities (and subsequently included donations received by Ne’eman Canada and the JNFC), between 2000-2023. This list revealed hundreds of unique Canadian charities moving their pooled assets into the now-seven revoked charities, who subsequently moved (or at least claimed to move) their money into Israel. From here, I searched for overlaps between boards of directors and created aggregated entities where such linkages existed. For the sake of financial relevancy, I then created a list of all aggregated entities that had cumulatively moved at least $1 million CDN in donations to the seven revoked charities within the 2000-2023 timeframe. The result is a list of 56 aggregated entities, responsible for over $393 million CDN in charitable donations flowing out of Canada into Israel.
In the case of Ne’eman Canada and the JNFC, we know that much of this money has gone to finance the operations of Israeli recipients actively engaged in Palestinian ethnic cleansing, or towards organizations that operate in support of the war criminality actively being perpetrated by the IDF. In the case of the other five revoked charities profiled above, the linkages between the hundreds of millions of dollars CDN in charitable donations and their Israeli recipients are far less clear. In several cases, the Israeli intermediaries appear as cutouts, John Doe-type entities whose identity is difficult to verify. Confirming what type of activity these cutouts perform, or what they do with the hundreds of millions of dollars CDN in charitable donations, is impossible to ascertain. If anything, the existence of such systemic, transgressional, activity within the Canada to Israel charitable pipeline points to a significant degree of corruption within the entire subsector, and a federal regulator either unable or uninterested in staunching the flow of illicit, Canadian taxpayer-subsidized, cash moving into Israel.
Certain aspects of the ‘Big Gifters’ list escape easy explanation. For example, several members of the list, such as the Mizrachi Organization of Canada, are legally registered as charitable organizations. As I’ve written about in detail, here, Mizrachi Canada, on its own, moves millions of dollars per year to ultra-Zionist organizations in Israel, many of them located in the illegal settlements. Why it and other charitable organizations, which are legally conceived of as the ‘frontline’ operators within the Canadian charitable sector, also appear on a list meant to expose upper echelon donors is unknown. Charitable organizations are not supposed to sit on pools of assets and so shouldn’t, technically, have millions of dollars on hand to move to other Canadian charitable organizations. When donations move from one charitable organization to another, and then into Israel, it is impossible to discern the origin source of the money itself. It is, in essence, money twice ‘washed’.
Jewish Foundations are also featured on the list. Registered as public foundations, these charities cumulatively sit on multiple billions of dollars CDN in assets, which because of their legal structure, are anonymized. While many of these Foundations, located across Canada, engage in local community support and services, their understanding of ‘tikkun olam’, clearly involves bankrolling the ethnic cleansing of ‘Greater Israel’; the Jewish Foundation of Manitoba and the Jewish Community Foundation of Montreal, for example, cumulatively donated over $30 million CDN to the JNFC.
Most members of the list, however, are legally registered as private foundations. Sitting on billions of dollars CDN in cumulative assets, these are the benefactors of private schools, synagogues, wings of hospitals, schools of business, university lecture halls, rehab centers, sports tournaments, and all the rest. Bluntly, these are the ‘too-big-to-fails’ of the Canadian charitable sector.
This ocean of private wealth can be sourced back to its points of origin. For example, to cookie-cutter condominium developments, such as Lebovic Enterprises, multi-pronged urban development corporations, such as Fieldgate Properties, Ranee Management, Medallion Corporation, and Rosdev, high-risk hedge fund investment, such as with the Friedberg Mercantile Group, which I’ve written about in more detail here, and media empires, such as with the Asper Foundation. Other massive sources of corporate wealth, such as Almad Investment and Reichmann Hauer Capital Partners, blur any semblance of line between finance and real estate and count mortgage assets and international holdings among the prime pieces of their globe-spanning investment portfolios.
What is to be done with the information contained within the list is a question without easy answer. Certainly, consumers exercising their financial right to invest or withdraw funds as they see fit is a possibility. There is, however, a gradient of difficulty in attempting to exercise one’s financial muscle against some of the largest property holders in Canada’s largest cities, for example, which, while not impossible, is perhaps daunting.
Legislative reform of the Income Tax Act is another possibility. The revocations of Canadian charitable organizations involved in illegally moving donations to Israel, such as those profiled in this article, is certainly a measure of hope. But these do nothing to punish – financially or otherwise – those making use of such financial flow-throughs. Nor do such ‘one off’ revocations seem to have much of a lasting effect on the overall movement of illicit cash to Israel; such flow-throughs simply reconstitute themselves under another name and carry on with their activities. Meaningful reform would entail developing investigative and punishment regimes specifically geared towards those making (consistent) use of revoked charities. Given the place of influence that such donors occupy within society at large, such reform, however, arguably exists exclusively within the realm of the hypothetical.
As it is, the Canadian charitable sector, which employs upwards of 10% of the total population and lives and dies upon its reputation as salve to neoliberal abandonment of the welfare state, has a profound association – with legal implications – with ongoing Israeli war crimes, billions in assets notwithstanding.
