December 22, 2006

To be a charity or not to be. That's the question.

The Mid Ocean News today essentially withdraws, under threat of legal action, it's story last week entitled 'AG allowed wife of Premier to by-pass charity regulations'.

I think the whole focus of the story on Mr. Mussenden was a distraction and not the core issue. The core issue is simple: What is the legal status of T.H.E.?

That remains an unanswered question after former Attorney General Larry Mussenden's response today (not yet online); what was the opinion of the AG's chambers was and what is the legal status of T.H.E.?

That's the question. Larry Mussenden's role is secondary.

If T.H.E. isn't a registered charity - which one must assume is the case or we'd have heard otherwise as it would have diffused this whole controversy - what is it? A business?

A lawyer friend suggested it may be an unincorporated association, which is a collection of people apparently.

But my understanding of the charitable regulations, as described recently to me by a lawyer, is that unless you are a registered charity it is illegal to solicit funds as a charity, and the invitation which T.H.E. sent out describes itself as follows:

This event is being produced under the auspices of T.H.E. FOUNDATION, a charitable organisation whose purpose is to raise money to help offset the price of certain costly Tourism activities. Net proceeds of this event will be used to help offset the costs of production of the 2006 Bermuda Music Festival.

The emphasis is mine.

That's the question, notwithstanding Dr. Brown's original comments on this back in October when he made a point of saying T.H.E. didn't represent itself as a registered charity but a 'charitable organisation':

"You should know that in no instance has THE Foundation claimed that it is a registered charity. They have said that the organisation is a "charitable organisation" and that is accurate.

Semantics. Using the term 'charitable organisation' implies that it is legitimate and registered.

Today's retraction by the Mid Ocean News doesn't change anything.

The question remains: Did T.H.E. break the law by soliciting funds as a charity?

And there's more, such as: If T.H.E. raised $400,000 as has been suggested, and turned over $110,000 to the Bermuda Music Festival, where did the other $290,000 go?

Posted by Christian S. Dunleavy