For more than a year now, officials from Public Works Canada have been frequent visitors to a blog being kept by North Vancouver researcher and writer Vivian Krause.
It is her work that has ignited the federal Conservatives' interest in the foreign funding of environmental groups in Canada. Ms. Krause was the first to raise concerns about the activities of a registered Canadian charity known as Tides Canada.
The Vancouver-based organization acts as a distribution centre, of sorts, for foreign donors that want to donate in Canada but don't have charitable status. It funds environmental groups, many of whom oppose oil-sands development and ventures related to it such as the proposed Northern Gateway pipeline project.
This week, it was revealed that the federal government is auditing Tides Canada. In fact, the probe has been under way for more than a year, which perhaps explains why officials from Public Works – which includes the Canada Revenue Agency – have been poring over information obtained by Ms. Krause mainly through U.S. tax returns.
Under federal guidelines, registered charities are allowed to spend no more than 10 per cent of their revenues on what can be considered political activity – and it must be related to their charitable purpose. Tides Canada president Ross McMillan is confident the audit will find no wrongdoing.
On her Fair Questions blog, Ms. Krause has drawn a potential link between Tides Canada and Vision Vancouver, the civic party led by Mayor Gregor Robertson. Mr. Robertson is a former director of Tides Canada. His chief of staff, Mike Magee, was a senior adviser to the organization at one time. Most notably, one of the mayor's most important donors and key advisers, Joel Solomon, is vice-chair of the organization.
Ms. Krause has shown more than $60-million (U.S.) flowing from U.S. foundations to Tides Canada. She has also revealed $8.7-million going from the Endswell Foundation to Tides Canada, which in turn has distributed funds to a labyrinth of investment companies and public-relations firms that have made significant political contributions to Vision Vancouver.
It takes the mind of a forensic accountant to follow the money trail, in some cases. Some of the information Ms. Krause has uncovered is perplexing and raises natural questions. When Vision Vancouver came to power in 2008, for instance, its biggest campaign donors were Renewal Partners – a small investment firm the president of which is Mr. Solomon – and Strategic Communications, a public relations firm also associated with Renewal.
U.S. tax returns indicate Endswell paid $2.3-million toward salaries at Renewal over a five-year period. Endswell has also indicated it contributed an unspecified amount of money to Strategic Communications.
It is Ms. Krause's contention that Endswell, while legally a separate entity, is part and parcel of Tides Canada. Mr. Solomon is certainly connected to both operations.
Tides Canada has said repeatedly that it has not funded any political party or candidate for public office. And there is certainly no evidence to suggest it has. The question Ms. Krause has raised – and one the Canada Revenue Agency now seems determined to answer – is whether it has contributed to a political party indirectly using intermediaries and obscure means.
Where this all ends up remains to be seen, of course. How the public views the federal government's recent moves likely depends on where a person stands politically. If you stand with environmentalists, than you no doubt see it as an ideological witch-hunt. If you stand with the government, you likely view it as a legitimate investigation into the activities of foreign-funded organizations that have received little scrutiny over the years.
Tides Canada has been audited before and emerged unscathed. This time, however, the Canada Revenue Agency would seem to have information it didn't have before. We'll see if it changes anything.
There's a lot riding on it.