London’s mayor breaks his silence about a Free Press exclusive detailing why the taxman yanked the charitable status of a foundation from which millions went to its directors, including $41,000 to Fontana.

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Q:These sorts of stories and facts — these are apolitical — (but) as the mayor, they reflect on you and reflect on the city’s image. Any thoughts on that?

First of all, I can’t comment at all. Because there’s a notice of objection going on with regards to (Canada Revenue Agency’s) revocation (of Trinity Global Support Foundation’s) charitable status) and so it might be in the courts so I can’t speak to that.

Q:But the city’s image, this hurts the city’s image, these sorts of stories, these sorts of facts. Would you agree with that?

I think people, including myself, need to separate my private life from my life here in the city. So as you know seven days a week, 100 hours a week, I work really hard at doing my job as mayor and that’s how I need to be judged.

Q:I understand that, but can you understand why for a great many people it’s hard to make that distinction?

Well I’m asking them obviously to. They need to make that distinction — ­separating private life from my life as a mayor. Let’s also remember some of these things occurred way before I became mayor.

Q:The revocation was as recently as a couple of weeks ago.

The revocation. But some of the issues had something to do with between 2008-09.

WHAT THEY SAID:



Reaction after Mayor Joe Fontana urged Londoners to keep his political work separate from his work with Trinity Global Support Foundation:

I concentrate on Ward 4, not the media’s perception of (Fontana). It’s been generally rumoured there’s a competition between the London and Toronto media as to who can topple their mayor first.

Coun. Stephen Orser, a Fontana ally

In general, any public official has to be held to very high personal standards of morality.

Paul Nesbitt-Larking, political science professor at Western’s Huron University College

The case against Trinity Global Support Foundation

The federal tax collector never made public its beef with Trinity Global Support Foundation.

But when Trinity challenged the CRA’s move to lift its charitable registration in the federal court of appeal, the CRA’s audit and letter of revocation were put on the public record.

In the end, Trinity lost its legal challenge of the CRA decision, but left behind in court several books of documents, correspondence and other material filed by lawyers on both sides of the dispute.

Five areas of “non-compliance” with Canada’s charity law were outlined by the agency in an April 10, 2012, letter to the charity. They were:

Failure to devote resources to charitable activities.

Failure to accept valid gifts.

Failure to issue tax receipts according to the rules.

Failure to maintain or provide adequate books and records.

Failure to file an accurate charity tax return.

The CRA further alleged Trinity spent too much on fundraising and to tax shelters, noting “fundraising is not a charitable activity.”

Trinity’s lawyer, Duane Milot, argued losing its registration was too strong a penalty but Justice David Near upheld the CRA action in yanking the Trinity designation.

Milot said without being able to issue receipts, the foundation would run out of money and shut down in nine months.

And he said he expects to appeal Trinity’s loss to the Supreme Court of Canada but will need permission from the court to do that.

Nearly $8 million raised for hungry school kids and to fight HIV/AIDS went to Joe Fontana and fellow directors of the charity, the Canada Revenue Agency says. Fontana, for instance, was paid $41,000 in “consulting fees” in 2009 and 2010 while chairing the foundation.

The charity was founded by Fontana’s boyhood friend Vincent Ciccone. Its president is Fontana’s son, Ugo (Joe) Fontana Jr.

ABOUT TAX SHELTERS

Such organizations may, or may not, be registered with the Canada Revenue Agency (CRA).

They work with charities, and charge them a fee, to distribute things such as pharmaceuticals, educational software and other gifts.

The value they place on donated items produces further receipts to charities, drawing the ire of the CRA that says the value of goods is often inflated.

Donors are often provided with another receipt reflecting a higher value of the gift.

Shelters promote themselves to donors as a way for donors to avoid paying taxes.

For Trinity Global Support Foundation, an advertisement by a London financial agency touted that a $500 donation could produce $27,000 in tax receipts.

The CRA said in court documents that Global Learning Gifting Initiative, the last of three tax shelters with which Trinity partnered, was a “sham” donation program with inflated values.

The CRA has warned that donations to tax shelters will be audited.

patrick.maloney@sunmedia.ca

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