Tuesday, June 29, 2010

We're Just Like the Salvation Army...

The Church (cough! cough!) of Scientology has been in trouble recently. Reports of their slave-labor, forced-abortions, abusive-leadership, tax-dodging, criminal activities have been popping up everywhere.
And now, in an attempt to counter all that bad press, they are attempting to hide behind the good name of legitimate-honest-to-God church and charitable organization: The Salvation Army.

Australian independent senator, Nick Xenophon has proposed some legislation that would require religious groups to prove what public benefit they they provide before being able to claim tax-exemption. Scientologists - fearful of loosing their tax exempt status in Australia - now claim that they are just like the Salvation Army.

I realise, of course, that I'm biased here. I am, after all, an officer in The Salvation Army. But this claim is outrageous.

Our services are provided (for the most part) free of charge. Not so in the Church of Scientology where members can expect to pay thousands and hundreds of thousands of dollars in order to receive services from the Church and to reach higher levels. Our drug and alcohol recovery programs have a demonstrable record of success - not so with Scientology's Narconon (Not to be confused with Narcotics Anonymous!). The Salvation Army has always been open and forthright about it's financial records. We keep ourselves accountable to the public whose donations fund our work. Not so with the secretive Scientologists.

"Like the Salvation Army?" I don't think so....

Well, except for maybe one thing. Within the Church (cough! cough!) of Scientology there is group known as the "Sea Org" who wear uniforms similar to ours.

Believe it or not, Senate Inquiries can generate all sorts of humorous exchanges.

A hearing earlier this week into the Tax Laws Amendment (Public Benefit Test) Bill generated so much laughter at one point, you could be forgiven for thinking you were watching ‘Bill and Ted’s Excellent Adventure’ instead.

...much more in article link...

VIDEO: NineNews A Current Affair - Scientology Tax

Wow. During the hearings, one of the Senators asked Mike Ferris, "why was the earnings when you had tax-free status in NZ in the 2.7 million, but when you suddenly had to pay, your earnings were only 300k?" He stammered, hemmed and hawed, "uhhhhh... currency exchange rates?" The Senator actually LOL'd, then let Ferris know they're going to need a much better answer, he needs to rethink that excuse.

And so he did. On the interview above, they now say it involved a one-off loan from the United States.

A one-off loan!? WTF?? Since when does the church EVER lend money to anyone, any church, for any reason? Ferrying 1 mil per week to an old man in a motorhome doesn't count.

This is the first time I can actually see an end in sight. That might just have been too much. Like was said by someone in those hearings, possibly the guys from the Aus Christian lobby, Eliot Ness didn't get Al Capone for murder, he got him for tax evasion.

1-way ticket to Bulgravia, anyone???

New rules to block the tax-free status of the Church of Scientology, greater scrutiny of liquidators and administrators, measures to stop sports match-fixing, and a new tax on horse owners are among future battles for the new Parliament.
The three regional independent MPs – Rob Oakeshott, Bob Katter and Tony Windsor – who will decide who will form government, have called for the major parties to take the parliamentary committee system more seriously.

[...]

There is no compulsion on a ruling government to accept a committee's recommendations but, in the new spirit of co-operation, some private members' bills proposed by independents or Greens may have a better chance of becoming law

Tax Laws Amendment (Public Benefit Test) Bill 2010
7 September 2010

© Commonwealth of Australia 2010
ISBN 978-1-74229-314-1

View the report as a single document - (PDF 1394KB)
http://www.aph.gov.au/senate/committee/ ... report.pdf

A national commission

The Committee notes the previous inquiries conducted by parliamentary committees,
the Productivity Commission and the recent Henry Review. Notwithstanding their
work, there remains a serious lack of information in relation to the not-for-profit
sector; for example, estimates of the value of tax concessions range from $1 billion to
$8 billion.
The earlier inquiries all recommended various changes to the regulatory oversight of
the not-for-profit sector. The Committee believes the incoming government should
increase transparency and accountability in the sector. A national commission, which
incorporates a public benefit test in the broader regulatory framework, should be
established, consistent with international best practice.
The commission should not be regarded as an additional bureaucratic impost; it would
rather replace a complex array of state and territory regulatory bodies, streamlining
processes for charities and reducing their compliance costs. It would increase public
confidence in charities by improving their transparency as well as being a source of
advice and assistance to charities.
The Committee agrees with the view expressed to it that there comes a time when a
government has to make a decision either to do something or to stop saying that it is
going to do something, because the matter has been on the agenda for many years. It is
now time for action.

Recommendation
The Committee recommends that the incoming government work through
COAG to establish a single independent national commission for not-for-profit
organisations. The incoming government should establish a working group, or
use the COAG Business Regulation and Competition Working Group. The
working group should consult extensively with the sector in a timely manner to
address issues arising from the establishment of a commission which applies a
public benefit test. The Australian model should draw on the Charity
Commissions in the United Kingdom and New Zealand.

[... [list of bullet points: see report] ...]

A public benefit test

The Committee supports the application of a public benefit test in the context of
broader reform.
The Committee agrees, however, with the preference expressed by the Scrutiny of
Bills Committee that it would be better for a public benefit test to be in legislation,
where it would be subject to more parliamentary scrutiny, than be set by a minister
through regulations, as proposed by the bill.

Recommendation
The Committee recommends that the incoming government should follow the
emerging international best practice and work with the Council of Australian
Governments to amend legislation governing not-for-profit entities to include a
definition and test of 'public benefit'.


Cults

In relation to the activities of cult like organisations and the consequences for
individuals and society of failing to take steps to protect the community from
unacceptable behaviour by cult like organisations, the Committee believes that
sufficient evidence was put before it to suggest that the behaviour of cults should be
reviewed with a view to developing and implementing a policy on this issue that goes
beyond taxation law. The Committee notes the evidence in relation to the response of
the French government and the establishment of Miviludes.

Recommendation
The Committee recommends that the Attorney-General's Department provide a
report to the Committee on the operation of Miviludes and other law
enforcement agencies overseas tasked with monitoring and controlling the
unacceptable and/or illegal activities of cult-like organisations who use
psychological pressure and breaches of general and industrial law to maintain
control over individuals. The report should advise on the effectiveness of
Miviludes and other similar organisations, given issues that need to be addressed
to develop an international best practice approach for dealing with cult-like
behaviour.

Additional Comments by Senator Xenophon

Introduction

1.1 There have been numerous inquiries into the not-for-profit sector over the past
decade, all consistently calling for reform of regulation of the not-for-profit sector in
order to ensure greater transparency and accountability.

1.2 This Senate inquiry was a beneficial and successful opportunity to continue
this discussion and heard from a range of experts, charities and religions and members
of the public through the submissions and public hearings process.

1.3 The Committee's recommendations for the establishment of a single
independent national commission for not-for-profit organisations, similar to the
Charity Commission for England and Wales; and for the Government to inquire into
the operation of MILVILUDES in France to learn how it monitors the activities of
cults, with a view to establish a similar agency in Australia, should both be initiated as
soon as possible.

The need for reform

1.4 Not-for-profit organisations, including charities and religions, are currently
afforded tax exempt status due to the presumption that they provide the community
with services and assistance that is of benefit. Subsequently, these entities are not
required to lodge income tax returns unless otherwise specified.

1.5 According to the Mr Michael Hardy, Assistant Commissioner of Taxation
with the Australian Tax Office,
"There are about 55,000 organisations that have some sort of charitable tax
concession endorsement. We receive around 6,000 applications per year,
which are reviewed."

1.6 Of those, however, Mr Hardy acknowledged that, given resource limitations,
not all of these applications are closely scrutinised.
"There is certainly a fast tracked assessment process. Realistically, with the
staff available and to work through the number of applications per year,
perhaps in the order of 70 percent of applications work through the risk
assessment as being relatively fast processed through the system. Some of
those are tagged for subsequent, after-the-event review. The remaining ones
would be subject to more careful scrutiny upon application.

1.7 Perhaps more concerning, however, is that charities and religions are also able
to self-assess their income tax status and may therefore be income tax exempt and
operate completely unknown to the Tax Office.

[...[quotes: see report]...]

The need for a Public Benefit Test

1.10 The Senate inquiry heard from a number of former members of the Church of
Scientology, an organisation which is provided with charitable status in Australia and
is thereby income tax exempt.

1.11 These individuals recounted their experiences while they were members of the
organisation, and explained why, based on their experiences, they do not believe the
organisation should be tax exempt.

Some examples of the evidence provided include:

Mr Anderson—One should be able to clearly identify groups who do good
works, because they see the results. If one cannot see those results, that
particular group should be deemed to be highly suspect and should be
treated as such. I guarantee if you asked the same taxpayer what good
works Scientology do and what they are known for, they would actually
struggle to give you an answer. I know I do. That was one of the things I
found very difficult to reconcile in my association with Scientology over 25
years. I in fact found them to be quite self-serving and not really directed at
the external environment.

Mrs Underwood—… as a former Scientologist I believe that the Church of
Scientology is a prime example of why this tax amendment is required. As I
outlined in detail in the attachment to my submission, the Church of
Scientology is a tax-exempt organisation which, one, enjoys tax-exempt
status while it only serves itself at the detriment of others. It does not even
serve its members. Its members actually serve it. Two, it is fraudulent. It
deceives and heavily coerces its people in order to obtain so-called
donations. It often does not deliver what is promised, and in some cases it
uses those funds for purposes other than what is stated. This is fraud and it
is a crime. Three, it is an organisation which threatens its people with ‘pay
up or else’. This is extortion.4

Ms Vonthehoff—The experiences include bullying and harassment; two
coerced abortions; Scientology justice procedures, including court hearings
resulting in removal of freedoms; forced financial donations; severe
financial stress; working a minimum of 40 hours and up to 70 hours a week
for no pay; removal of my Australian passport while studying for
Scientology in the US, so I was unable to leave; working under duress all
night on many occasions while my young children were forced to stay at
the office and sleep on the lounge; threats of loss of my family if I tried to
leave; psychological abuse; being forced to sign a suicide waiver, freeing
Scientology of all responsibility if I caused myself any harm, when I made
it clear how much I wanted to leave; and interrogation regarding my
personal life and sex life.

1.12 The Committee's recommendation that a Public Benefit Test, such as the one
proposed in the Tax Laws Amendment (Public Benefit Test) Bill 2010, will therefore
ensure that an organisation's aims and activities are for the 'public good' and is
weighed against any harm caused, such as the test in effect in the United Kingdom.

1.13 Furthermore, the recommendation that the Government provide a report into
the operation of France's MILVILUDES agency (which monitors the operation of cultlike
organisations), and similar international bodies, with a view to establishing a similar
agency in Australia, will ensure that cult-like activities are closely monitored and
appropriate laws are introduced to combat these groups who use psychological
pressure and breaches of general and industrial law to maintain control over
individuals.

1.12 The Committee's recommendation that a Public Benefit Test, such as the one
proposed in the Tax Laws Amendment (Public Benefit Test) Bill 2010, will therefore
ensure that an organisation's aims and activities are for the 'public good' and is
weighed against any harm caused, such as the test in effect in the United Kingdom.

1.13 Furthermore, the recommendation that the Government provide a report into
the operation of France's MILVILUDES agency (which monitors the operation of cultlike
organisations), and similar international bodies, with a view to establishing a similar
agency in Australia, will ensure that cult-like activities are closely monitored and
appropriate laws are introduced to combat these groups who use psychological
pressure and breaches of general and industrial law to maintain control over
individuals.

Conclusion

1.14 The Committee's recommendations go further than the scope of the Tax Laws
Amendment (Public Benefit Test) Bill 2010, by recommending a Charities
Commission using a Public Benefit Test to provide appropriate and fair scrutiny of
not-for-profit organisations and, with this, much greater protection for individuals.

1.15 Given some of the horrific stories heard within the Inquiry, it is important that
any legislation to establish a Charities Commission and/or a MILVILUDES
equivalent in Australia be introduced as soon as possible and by no later than 30 June
2011.

Nick Xenophon
Independent Senator for South Australia