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Fair Trading (Soliciting on Behalf of Charities) Amendment Bill

Submission By Grace Haden  Licenced Private Investigator

I am a Licenced private investigator and  member of the certified fraud examiners association , I am a former Police sergeant ( NZ police )  as well as general investigations I  work  in the identify  fraud prevention area, I am a verification specialist. I am director of a new  company Transparency New Zealand which aims to  make  New Zealand more transparent accountable to the truth and above all encourage  ratification of the  united nations  convention against corruption .

In the course of my work I have come across several matters of concern which touch on the issue of fair trading act and charities and I believe should  be rightfully  considered  when reviewing this legislation .

In 2003 New Zealand signed the  United nations convention against corruption but  the principals in the convention have not been  ratified  by law. By ignoring the spirit of the convention we are stepping further from ratification rather than closer to it. In particular in the Legislative guide for the implementation of the United Nations Convention against Corruption it mentions  (http://www.unodc.org/unodc/en/treaties/CAC/legislative-guide.html)

Prevention

5. The Convention requires States parties to introduce effective policies aimed at the prevention of corruption.

Criminalization

6. The Convention goes on to require the State parties to introduce criminal and other offences to cover a wide range of acts of corruption, to the extent these are not already defined as such under domestic law.

It is  therefore important while considering  the  changes  to the fair trading act  and the  charities  acts   for all aspects  and not  just for  third party  collection agencies.

While there are professional collecting  agencies which  take  a majority of the takings  there are also  charities  who obtain  funds from the public and are used to exclusively fund the corporate wages to the executive members  or use the funds  which will indirectly provide a return for themselves   or are siphoned off elsewhere.

While the bill considers third party collectors it does not go far enough to eliminate unfair practices between competing charities and provides no protection to the public as to the identity and legal existence  of the charities themselves  let alone  those collecting for it.

There is no consideration given to the ability for “ charities” to launder  money  and while  the charities commission sets out and claims to give transparency, it falls short of  the mark  , and  the should  be no way that  such registrations could  slip by. There is a very  large assumption that any  charity which is  set up  is set up for   legitimate and credible means.

I have voiced my concerns with the charity commission and it appears that here is more emphasis on the applications having all the boxes ticked than on the reality which exists behind the paper work.

There is also no apparent provision which holds any one accountable to false statements and false claims when applying for charitable status, the requirement of statutory declarations would easily overcome this issue.

As a private investigator I am aware that  you cannot foresee every possibility   which may lead to  a corrupt practice , but  I do believe that when you are aware of instances where the acts  have been misused  you are in  a more powerful place to see how  the legislation either does not work or is abused.

Charities like everything else in New Zealand have become a business  , they are no longer  voluntary organizations which  provide a service and requested funds for  survival, the focus  for many has shifted  from service  to revenue collecting, and a means of supplying corporate wages for those who control the charity and an alternative way of obtaining employment by creative means.

No matter what is done to  close the loop hole   for third party collectors  a creative  alternative will be found  , one that I can immediately identify is  that  it will be simple for  collectors  to set up with a credible name and become a charity themselves , there by paying their own costs  and then passing the balance on to  the charitable purpose.

I will illustrate my submission using   documents and examples to support my assertions

Issue  one   The inefficiency and lack of transparency of the charities register

Example : The Roundtable On Violence Against Women Trust

This alleged trust is a charity, it has registration number CC38365

• It has a unsigned trust deed
• There are no officers listed or identifiable
• The trust is  not  registered under any act therefore the  name is not a legal name it is a trading name  which one or more person uses  – that person/persons cannot be identified.
• Even its web site does not give a clue to who the members are.

Questions

Where is the transparency?

• How much money is coming in,
• who is receiving it, is it all being declared-
• Who are the trustees ,
• Why bother about third parties collecting when the Charities themselves have no transparency and therefore no accountability?

In this case the  lady whose name  does show in the data base  is  Alana Bowman , I contacted her  by phone (  regarding an unrelated matter ) and  she admitted to  being a  labour party member, she was  residing at the address  given for the charity  but  that is all the information we have. It was by having her name that I could find the trust, however  By having the trusts name  you cannot identify her .

Solution 1.

Before anything can be fixed   with regards to third parties the charities act requires amendment to make those applying for charitable status accountable to the truth.If this is not done then a third party collector could set themselves up in a “credible sounding name” collect funds than pass it to another charity after “administration” costs have been deducted.

I suggest that the Charities Act is amended to require

1. A signed  and verified copy of the  trust deed, supported with a statutory declaration signed by a trustee  that is a true copy.
2. A leaflet setting out the legal obligations and responsibilities of trustees of charities needs to be published by the Charities commission.
   1. Each trustee must individually,  through a statutory declaration ,  accept these terms and  conditions and  confirm  having read them and willing to comply with them .
   2. They must also provide their full name  , date of birth and address, these particulars are no more  than what  are required to be provided  for  registration on the personal property securities register.
      1. i.      If the personal property security register can show these details for  obtaining private funds  why should the standard for obtaining public revenue be any less.
      2. ii.      With regards to name it has to be remembered that  simple name like Jennifer Smith   does not identify the  person consenting, Names are not unique, addresses change , to confirm ID we require three points of reference.   If an Identity cannot be confirmed  then there cannot be accountability
3. There must be  independent verification  that this person exists, this  can be done  when swearing  the document  where  it should be mandatory that a person provides Identification  before swearing a document  rather than saying  that is who they are.
4. Provision could be made on a standard statutory application  form where  by the JP or  person swearing the document  confirms the nature f  the identification provided.
   1. i.      Ironically banks require more information for persons to go on a trusts bank account than the charities commission requires for the ability to obtain public funds.

Issue 2  Litigation  using charitable  funds to  conceal corruption

Although we provide a somewhat limited transparency it is dangerous for anyone to question corrupt practices as to do so can lead to litigation where   a bottomless pit of charitable funds   is used to silence those raising questions which could expose  corrupt practices.

We are apparently so determined to keep New Zealand’s least corrupt perception alive  that we   offer no support to anyone who says.. Excuse me is that not wrong?

Currently we have no legislation or protection for those  who  ask questions about corruption  or corrupt practices.

Example   : The Animal Welfare Institute of New Zealand- there is  profit in animals

In 2006 I questioned the existence of a RSPCA like  “organization “which claimed to be a charity and  had wide sweeping law enforcement powers.

For asking questions regarding conflict of interest   and what I saw as corrupt practices as defined by the UN  ,I was sued  using funds  which were raised from the public and later claimed to be charitable.

The UN  convention, which we signed in 2003  provides protection and support for those who   question corruption in good faith. But  without  support of  legislation  it doesn’t matter how much transparency we  get no one will dare question  anything  if they hear my story.

Articles 32-35 of the  convention provides protection  for persons  such as myself  who without  that protection would be subjected to what I have suffered.

It is ironic that  of 164  countries which signed the  convention, only 17  have not ratified the   convention and  that one of those 17  is despite this   the least corrupt.

Of the top 10 least corrupt countries New Zealand is the only one which signed the convention and failed to ratify it.

That would not matter if we protected those who question corruption but I can testily that those who question corruption are dealt to more harshly than any criminal. By preventing corruption form being exposed we maintain the pretence and in my mind makes us the most corrupt of all.    http://www.unodc.org/unodc/en/treaties/CAC/index.html

Questioning corruption   has cost me   Over $100,000  in lawyers fees  defending myself  from  false claims ,  I have a further $150,000  to pay if my appeal  is rejected, It has cost me my marriage and further lawyers fees associated with that. My family has been torn apart, my business destroyed and my life taken over by fighting this gross unbelievable injustice, and I am not alone, others  too have been trampled in to the dirt by  keeping up pretences of our “ corruption free “ status.

If there is to be a  register  to provide transparency, then  there should be  facilities  for accountability and  accountability is  attained when persons  who use this transparency ask questions about things  which  they can see  don’t stack up.

Those who   ask questions so that the  public can  raise  concerns  about   discrepancies that they  may  become aware of  then there has to be a way for this to be done safely  and without  having their lives  devastated.

Background

1. In 1999  an application was made to the minister of Agriculture for AWINZ to become  an approved organisation under the Animal welfare ACT  ( S121) the application claimed that the trust existed by trust deed  and was in the process of being registered  under the charitable trust Act 1957
   1. AWINZ was like a SPCA, it   delegates authority from the crown to animal welfare officers who have wide sweeping law enforcement powers.
   2. The new Act came into effect in 1999, the No 1 bill had been written by Neil Wells,  Barrister, who made the application on behalf of a non existent trust  and had introduced into the bill the ability  for  applications for “ approved organisations’
   3. He was also employed as  an “ independent “   advisor to the select committee which saw the act  which was  passed into law facilitate his  private business concept
   4. AWINZ called itself a charity   but in 2006 no evidence of a trust deed, incorporation or charitable status could be found. I was asked to locate and find accountability of AWINZ following the unlawful seizure and Euthanasia of a cat by an AWINZ inspector.
   5. Being unable to locate the organisation  and having exhausted our  official information act  and  LGOIMA request  , we formed  another trust called Animal Welfare Institute of New Zealand  which  was  incorporated under the charitable trust act Number 1809454, 27-APR-2006 this trust obtained  donee status through IRD.
      1. It was  proved  through both these actions  that  no other  legal person existed by that  name  or had   charitable status.
      2. In early June 2006  I received intimidating phone calls from one Vivienne Wright,  the purpose of the intimidation was to  force us  to give  up the incorporated name  which  was now drawing attention to the fact that  the “ institute “ in Waitakere city  ws not a legal person and had no  identifiable identity.
      3. Later that month  Nick Wright , barrister of Brookfield’s   backed up his wife’s intimidating phone calls with lawyers demand  and offered as proof  of AWINZ existence an   unverified  signed trust deed  dated 1.3.2000 .
      4. Despite writing to the   trustees   and making ourselves available for  out of court  resolution, we were denied the opportunity and we were taken to court on allegations of passing off,  breach of fair trade and  for  defamation .-The defamation amongst other things  for stating that the  application  in November 1999 was false    because AWINZ  neither had a trust deed nor was incorporated.   These are facts.
         1. I phoned the   persons named on the trust deed and was later to be accused of harassment because I had asked if they were trustees, these persons purportedly immediately resigned. I was however told that these persons never attended a meeting and some denied ever having signed a trust deed.
         2. These persons have now retreated behind lawyers.
         3. A new chair person came to our attention , she was not one of the trustees listed on the trust deed   this  Former Mayor , Labour party member Wyn Hoadley  made  her claim to  being  involved in the trust   though  a  fundraising  Flyer which went out to  all dog owners in Waitakere city council .
            1. The only other bit of “ evidence was a document filed a year later  with the charities commission by Mr Wells claiming that she was a trustee from 3/05/2006, there was no evidence of her being a trustee  by  any legally binding means.
            2. I contacted Wyn Hoadley and asked her if the matter could be resolved trust to trust   by all trustees meeting with view of resolution, her reply was simple.. “ I am not a messenger “
            3. When the court documents were filed, it was not  in the name of the trustees  on the trust deed  dated 1.3.2000  but   of three people  who together had no trust deed or proof of being  a trust and therefore could not have been a  charitable trust as they claimed.
            4. The legal action occurred simultaneously with Ms Hoadleys fundraising flyer being sent out  .
               1. It should be noted that the logo adopted for the flyer and used  by the so called Institute was deceptively similar to that used  by the council animal welfare services where Mr Wells is the manager of the  division which deals with dog and stock control

1. This money was paid into an account which was with the national bank in the name of Animal welfare institute of New Zealand, only one person operated this account and there were no trust deeds associated with it.  Mr Wells was the person who operated the account.
2. Within a month of  sending out a  flyer for  fundraising  the Brookfield’s lawyers  invoices  made out  to the trading name AWINZ commenced (total some $99,000)  and were specifically for suing me   for  questioned the  existence of AWINZ Their intent was to obtain the name and to silence me..  beat me into submission.
   1. Mr Wells was to get a cost award specifically for personal gain of  some $57,000  for alleged defamation   which was never proved and I was  prevented from  defending  with truth.. the chronology says it all it is as follows
   2. His lawyer Nick Wright of Brookfield’s achieved this victory by  repeatedly misleading the court , withholding  evidence  form  the court and manipulating the system so that my   defence of truth and honest opinion were struck out.
   3. In  August 2006, after litigation had begun  another “ trustee” was to  join  again without any proof of being bound By a deed , this person  was Tom Didovich the former  manager  of animal welfare Waitakere city ,who had  worked on the project alongside Mr Wells in the  years leading up wot the legislation being passed.
      1. He was also the person who had collected and witnessed the signatures of the trustees on the 1.3.2000 deed.
      2. He was also  employed   by the RNZSPCA as national education and branch support manager
      3. It is only in December   2006  , 6 months after litigation commenced  that  a new deed was signed , the deed was amended to   change the purpose  so that it could  qualify for the Charity   commission.  Charitable status  was obtained on 28/09/2007 ( 14 months after litigation began)
         1. This charitable trust  shows through its Financial statements filed on line ,that  funds were used for   legal action against me.
         2. The chronology of events  is as follows

date	event		amount
27/04/2006	AWINZ  incorporated
3/05/2006	awinz.co.nz  web site set up by incorporated trust stating they were not the same as the trust in Waitakere
10/05/2006	Wyn Hoadley allegedly becomes a trustee of  unincorporated AWINZ  there is   no  trust deed  or proof of any kind
1/06/2006	request for public funds by Wyn Hoadley as ” chair of AWINZ “
30/06/2006	Brookfield’s invoice 201163		2818.35
18/07/2006	statement of claim		Legal action  was taken by persons other than those  shown on the only trust deed  which existed  dated  1/3/2000
28/07/2006	Inv 202547		6309.43
14/08/2006	Didovich becomes a trustee
30/11/2006	Inv 208729		1894.31
5/12/2006	trust deed signed
20/12/2006	Inv 209947		180
31/01/2007	Inv 210963		1795.16
1/03/2007	Inv212325		10304.33
30/03/2006	Inv 212848		6609.16
7/04/2007	Inv 214744		2401.88
30/05/2007	Inv 216401		7767.11
29/06/2007	Inv 217964		4237.43
31/07/2007	Inv 219513		899.55
28/09/2007	The  trust formed by  trust deed 5/12/06 becomes a  charity
28/11/2007	Inv 226453		2554.65
19/12/2007	Inv 227421		1654.2
29/02/2008	Inv 230016		4130.52
28/03/2008	Inv 231294		13218.68
30/03/2008	Inv 232586		14343.81
30/05/2008	Inv 233901		5426.33
30/06/2008	Inv 235278		5423.91
31/07/2008	Inv 236729		2250
5/08/2008	Inv 236820		5419.41
	total		99638.22
	Note all invoices are made out to
	invoice made out to AWINZ

1. It needs to be noted that  the invoices to  30 June 2008  on the financial statements  total  $91, 968.81 this is not reflected in the   financial  statements  .
2. A lot of confusion exists with regards to trusts, thanks to this litigation I have become some what of an expert in this field, and I know that only incorporated trust have perpetual   existence, but  trustees  still need to be shown on and off the trust through  a paper trail.
   1. Unincorporated trusts are an agreement between the parties to the deed. If the name does not appear on the deed or an amended or supplemental deed they cannot claim to be a trustee.
   2. There are only two trust deeds ,  and  the plaintiffs who took  legal  action    were not bound by a deed   and were therefore not  one and the same as the group  on  the first deed or the group on the second deed which  have claimed the  charitable funds and the payments   which are not  theirs.
   3. The confusion arises through the use of a trade name for various  trusts  as if it is one and the same.  If the legal name was used in each instance that confusion would be eliminated.
   4. As a result of litigation and the inability of the incorporated AWINZ to have access to public funds like the unincorporated trust did, they were put out of business. In the end  survival comes to who can raise the most money  and invariably the honest will lose.
      1. The incorporated trust  changed their name, under duress ,  to  animal owner support trust, they were to have supported people who could not afford treatment  for their animals
      2. Mr Wells prosecutes and  obtains revenue (purportedly for AWINZ) from people he charges for not being able to afford the vet bills, the charges arise after an interaction with the council  staff who he supervises.
         1. i.       I can supply  the information’s for these  showing Wells appearing in court  wearing  his barristers hat  and obtaining remuneration for    the bank account which he  had sole control over   in 2006.
         2. It was therefore in the financial interest of Mr Wells “AWINZ “to put a trust such as   animal owners support trust out of business, for when people  cannot afford vet bill they are better targets  for  animal welfare offences.
         3. One of the claims  in the statement of  claim was breach of fair trading act   But  the incorporated trust existed 27/04/2006  so how could Wyn Hoadley    bring a claim of Passing off and   breach of fair trade when
            1. the date she  allegedly became a trustee was after the other trust had formed
            2. There was no  proof of being a trustee.
            3. Of greater public concern is that she as Chairwoman of a non charitable trust solicited for funds and although the flyer makes no claims to the trust being charitable , those who rang council were told that the donations were tax deductible and the web site www.Awinz.org.nz states on the about us page “The Animal Welfare Institute of New Zealand was formed as a charitable trust in 1999.”
            4. In 2008 Neil Wells writes  to the  Mayor Bob Harvey and asks for his endorsement for the next fund raising drive  He claims that it raises abut $5,000 per year. Yet the   2006 and 2007 figures in the Financial statements filed   do not reflect that and show a substantially lower figure

Solution 2.

1. Charities registered with the charities commission should be open to review and   auditing.
2. Funds can only be used for the charitable purpose  and penalties should be there for abuse.
3. As with many of New Zealand’s  so called watch dogs  they appear to be run  by  people  who have little or no understanding  of the law and are easily duped by a barrister or persons  who are seen  to be persons of high profile  and are therefore perceived to be trust worthy.- No one should be taken for their word  and lawyers and  accountants should be    used to audit those about whom questions are raised.
   1. I have complained a number of times about the manner   AWINZ is being operated   but I may be more constructive in hitting my head against a brick wall.

Issue 3 transfer of  funds between charities

Transfers between charities could easily occur and   could be a way for third parties   to circumvent legislation by setting up as a  charity . The definition of  third party needs to be clearly defined.

1. On 15 May  2000 the  Waikato  SPCA trust was established .  This trust had a corporate trustee being the RNZSPCA  Waikato. The other  trustees were Garrick , Dalton Shepherd and Wells .
2. Land  belonging to the RNZSPCA  was  sold  and  as a result $400,000 was transferred  from the  RNZSPCA into the trust. ( this is verifiable through public records )
3. 12 may  2003 the  trust  amends the trust deed  and drops off the corporate trustee .
4. IN 2005   it  applies for  incorporation to  become  an entity in its own right  retaining the $400,000  and then becomes a charity .

A similar transfer of funds occurs   with   the 2000 AWINZ unincorporated trust and BEAUTY WITH COMPASSION INCORPORATED

1. BEAUTY WITH COMPASSION  had a trust called the lord Dowding fund.  In 2005   Neil Wells writes to the secretary of the  trust  which wound up on 6th September 2000 and asks for the  funds  to be transferred to   AWINZ  , and so  in excess of $100,000  are made over to  him into the account which at that time only he had access to .

Solution 3.

1. Transfers of money between trusts   should be limited   to the same extent  as private individuals   gifting to  a trust, the sum being   $27,000 ( or what ever it is ) per annum  and   sums over that amount  being  subject to   a gift duty.

Issue 4  Registration of trustees of trusts

As previously mentioned unincorporated trusts   consist of people who come together for a common purpose and intent which is expressed and agreed to  in a deed.  If these person owned property it could not be held in the name of the trust  but is registered  in the name of the individual trustees who comprise the trust. Similarly   shares cannot not be held in the name of an unincorporated trust  and again are held by  legal  or natural persons.

The charities act  contains a fundamental flaw  in law  in  section 6 where it allows registration in the name nominated by the trustees , this name is not a legal name  .

And then in section 2  goes on to say

2) The registration of the trustees of a trust as a charitable entity is not affected by—

• (a) 1 or more of the trustees ceasing to be a trustee of the trust; or
• (b) the appointment of new trustees of the trust.

This statement leaves  it open to  an unincorporated trust to   bring any one on board without  signing a deed , it Fails to recognize the  difference between incorporated trusts and unincorporated trusts   and does not consider the fact that Unincorporated trusts do not have perpetual existence and when trustees  leave and new trustees come on  board there needs to be a new deed usually being a deed of variation of deed which explain, records and brings about  the changes.

Example :  referring to the AWINZ 1/3/ 2000  deed , if  that trust   had been  registered under the charities  act  and as there is no record of Nuala Grove and Sarah Giltrap resigning  they could  equally have claimed to be the charity  and had  two others join them.

Mr. Wells and Mr. Coutts  did just that  they brought  Wyn Hoadley and Tom Didovich on board , changed the trust  purpose singed  a new deed in  December 2005 and claimed to be the same trust,  when It  is not.

Solution  4.

While section 6 (2)  can hold true to   incorporated trusts or societies  it  cannot be true of  unincorporated trusts as  persons  not shown on a trust deed   have no accountability to the deed.

It is therefore essential that all applications are done by the individual  trustee  through a statutory declaration  ( making a false statement is a criminal offence section 110 False oaths  crimes act 1961)

Issue 5   Legal name

The  charities commission web site is misleading  , on the  site  the   line identifying the charity  states

Legal name of the charity

The Animal Welfare Institute Of New Zealand

1. This should be a legal name, trading names are not legal names. As in the case of  animal welfare institute  of New Zealand the legal name would be the name which appears on court documents.
2. The charities commission is therefore  facilitating a breach of the fair trading act  where by  it is allowing a trading name  to be represented as a legal name.
3. There is no  register of trading names  and by law any one  in new Zealand can call themselves anything  but when it comes to  accountability  it is the legal name  which has to be known   as opposed to the  assumed, adopted  and trading names -yet the  charities commission   allows trading names to be  registered  as if they are legal names.
4. To sue  a trading name , adopted name  or an assumed name  you must first identify what the real name is, if  there is no transparency in that  there is no accountability to the law as the  legal persons representing  what the charities commission calls entity  cannot be identified. E.g  how would you sue The Roundtable On Violence Against Women Trust? You would have  as much success  as suing “a tea pot”,  for both  are just names with no accountability .
   1. A true test of an Entity is would you give a loan to a group of unidentified persons. If they   failed to pay how would you  get  your money back?
   2. In the case of  the animal welfare institute of new Zealand  the legal name is  the one in which they can sue and be sued  which is  Neil Wells, Wyn Hoadley, Tom Didovich  and Graeme Coutts as trustees in the animal Welfare institute of New Zealand.
   3. By allowing the use of  trading names   to be labelled as  legal names can lead to instances of identity fraud and open a raft of traps to people who are already very confused as to the status of trusts.

Solution  5.

1. Only the legal name, being the one in which the   organisation is legally accountable in is to be used for registration.
2. Penalties should be in place for those  who use anything other than the legal name.
3. This provision would also prevent the   type or registration as seen in my  first example.

Issue 6  Loss of officers

It has also come to my notice that a number of incorporated societies which are charitable   do not have any more than one   officer listed. It needs to be of public concern when  only one person operates  such a trust  or society an example of this is

1. The Waiheke Island Branch Of The Royal New Zealand Society For The Prevention Of Cruelty To Animals Incorporated
2. Kaitaia and Districts Branch Of The Royal New Zealand Society For The Prevention of Cruelty To Animals Incorporated
3. Hawkes Bay Branch Of The Royal New Zealand Society For The Prevention Of Cruelty To Animals Incorporated
4. The Hokitika Branch Of The Royal New Zealand Society For The Prevention Of Cruelty To Animals Incorporated
5. The Central King Country Branch Of The Royal New Zealand Society For The Prevention Of Cruelty To Animals Incorporated
6. The Horowhenua Branch Of The Royal New Zealand Society For The Prevention Of Cruelty To Animals Incorporated
7. The Gisborne SPCA Inc

All of the above  have  only one officer   it is the same officer in each instance , when there is only one person on an incorporated society  there is no transparency or accountability

In my investigations I have  uncovered other   charitable bodies  such as  the Hibiscus Coast Youth Council Incorporated   which  had  self  funded manager  who used the charitable funds for her  wages  which were in  the vicinity of $60,000 per annum, she also  drove a $40,000 vehicle  belonging to the trust  and sacked the three members on the executive and recruited new executive at will.

Funding was obtained   simply by ticking the right boxes  and providing he illusion that services were being performed.

Again when I questioned this I was attacked  for those  who had provided the government funding did  not wish to  show their neglect in not assuring accountability.

An incorporated trust which I have identified  as existing without    trustees is the New Zealand fund for humane research . All the trustees except one  believe that this trust has been wound up , Mr Wells still claims to be a trustee of this trust. It is not   registered  as a charity  but  effectively  if one person  as in the instance of AWINZ can apply  on  behalf of others for   it to become one then the is nothing to prevent  defunct    trusts from being registered as charities.

Continually I have people phone me and tell me that the incorporated society to which tey belong is  wishing to   become a trust , rules need to be set in place where    incorporated societies are  liquidated  or have funds transferred  so that few can  have  greater control and provide less transparency.

Solution  6.

1. All wages paid  by a charity should be listed to show  who they were paid to, those who are paid  from the public purse need to be accountable to it.
2. Societies   have to have a minimum number to exist , if they fall below their 15 members they should be wound up .
3. Society annual meeting   minutes  as well as the annual return  should be  visible including who the members are.
4. The charities commission should work    closely with the charitable trust register and vice versa.

Issue 7   listing of  officers on the  charities web site .

A gain the Waikato SPCA  had until recently a large number of trustees shown,  the number was in excess of the number allowed by the deed.  It was expressed to me by those involves with Questioning the loss of the $400,000  that this was a deliberate move  so that no one would know who the trustees were at any given time.

This  has  apparently bee resolved  but it  does  show a need for the minutes of meeting to be sent in as proof as to election of officers and   changes of  officers.

Solution  7.

1. Penalties need to be imposed for  those organisations which fail to keep the register up to date   and for those who file false returns.

Issue 8   Lack of verification as to the existence of   officers.

1. To identify a person you need a name , address and a date of birth, i.e. three points of reference.
2. The charities act   provides only for   a name for a trustee to be put forward, there is not even a requirement for  a person to do it personally and it can be  done on behalf of some one. Therefore there is not even a signature on file for those who are replacement trustees in incorporated trusts/ societies.
3. Neil Wells made an application on behalf of  his fellow trustees for the trust to become charitable. ( as  shown by the documents on this file )
   1. Because the  trust is unincorporated and  only has a legal  identity through the  trustees comprising  it  there should have been consent from each  trustee  agreeing that the  application for charitable status   was being made.
   2. Mr Wells completed  the application forms for each person, in this case I know them to be real people  but  the reality is that  they could in other circumstances be entirely fictitious and there is  therefore no provision to  confirm that they actually knew that the  organisation had become charitable  or had consented to it.
      1. If  the trustees were to have more common names  like Mary Jones, David Green  you  would not have any basis  for identifying the trustees.
      2. Even in the trust deed there is more information available about the witness than the actual trustee.
      3. A signature and a written name does give enough accountability as people who cannot be found  have no accountability, there is  even less accountability for fictional characters.

Solution  8.

1. Trustees have accountability to a charity, and the public  therefore there has to be direct consent from each person to show that they consent to being part of a charity and know their responsibilities.
2. Full details  of trustees should be available as provided  by the personal property register, If one register can  provide  full names addresses and date of  birth  why is another  register limited.

In summing up

I have written to the charities commission with my concerns  and wish to comment on their reply

1. 1. Each of the applications for registration provided to the Commission is scrutinised individually to ensure that the applicant meets the criteria set out in the Charities Act,

While the commission scrutinizes each application  there is no accountability to the truth and  any astute person can  fill in the application so that it meets the  criteria on paper. More needs to be  done  to ensure that the  charity is not a fiction. I would like to suggest an investigations branch for the  charities commission which has its own ability to prosecute and  enforce  criminal penalties for misuse of public  money.

1. 2. A registered charity must also notify the Commission if it changes its name, address for service, balance date, rules, purposes, or officers (including new appointments).  This information is published on each charity’s page on the Register.

As in the case of the Waikato SPCA  there was an excessive number of people shown on the register , there needs to be a penalty element for not informing and keeping the register up to date, people have to be accountable to transparency.

Whist I agree that  third party collectors  need to be accountable to the fair trading act, so should charities themselves and to  allow the use of  trading names  as if they were  legal names is deceptive .

Summary of Suggestions

1. The definition of entity needs to be amended    to being the name of the legal person , body corporate
2. The  legal name for unincorporated  bodies need to be used   being   the name which would appear on  court documents or a loan  application.
3. A statutory declaration needs  to be completed by each trustee or officer  giving   their name address   date of birth    and stating that they are   an office holder , giving the dates  from which they were elected etc  and stating that they have read and accepted the terms and conditions of becoming an officer of a  charitable trust.
4. The bank statements   showing the legal name of the  charity need to be provided,  financials  are easily  doctored  and these too need to be filed subject to a statutory declaration  .
5. When charitable funds are transferred  there needs to be a  limit  anything  outside that limit  should be questioned and be subject to gift duty.
   1. Spot checks and high penalties  should be a reality  to ensure that those running trusts do not abuse the process.
   2. Unincorporated trusts  should be  identifiable as such
   3. There needs to be a minimum number of  trustees or officers for a charity.
   4. Accounts  need to  have spot check by  forensic accountants, the  sum allowed for  payment of wages  should be a set  proportion of the  funds  raised .

I would like to  make submissions in person .

Grace Haden

Licenced Private Investigator.

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