The stench of the fraudulent charity Iran Aid has hung about Belinda McKenzie for more than two decades now. Speculation regarding Belinda’s involvement with Iran Aid, and the amount of money she is alleged to have pocketed from the charity during its heyday, runs rampant in the troofer community, while more reputable researchers have tended to run up against brick walls when they attempt to investigate more closely.
Here’s what we do know: Iran Aid was registered as a charity in 1983. Its charitable objects, according to the Charity Commission, were to “provide for the relief of conditions of need, hardship or distress of Iranian refugees and Iranians in Iran who are in necessitous circumstances”. The proposed beneficiaries were orphan children in Iran who were in need as a result of their families being opposed to the Iranian government.
In 1996, The Charity Commission cautioned Iran Aid about its heavy-handed fundraising tactics. We discussed this a couple of years ago, in a post by a donor to the charity whose experience resembled nothing so much as a gangland shake-down. Despite the warning, the Commission continued to receive complaints from the public about unethical tactics used by Iran Aid.
Charity Commission investigation
In March 1998, the Charity Commission received allegations that Iran Aid was being used to fund a terrorist organisation, the Mujahadin-e Khalq (MEK), sometimes called the MKO.
According to the results of the Charity Commission inquiry into these complaints, the Commission enquired into the bona fides of the complainants, whose identities were kept confidential at the time, but who were later revealed to be former Iran Aid employees. The allegations were considered credible. Rather than attempting to determine whether Iran Aid was diverting its funds to a terrorist organisation, they decided to investigate whether the funds were actually going to the charity’s designated beneficiaries.
According to the Inquiry results:
On 22 July 1998, after obtaining information from the charity’s bankers about the destination of the charity’s funds, the Commission froze Iran Aid’s bank accounts. The Commission was concerned to find that the funds, some £5 million per year, were all paid into an individual’s account in a country other than Iran.
The charity’s funds were all sent via a middleman based in the Middle East, but not in Iran. [The middleman was later revealed to be located in Dubai.] The Commission interviewed this intermediary in Germany with the aim of establishing the reason for the charity transmitting its funds in this way and how these funds might then reach the charity’s beneficiaries in Iran. Despite this interview, investigators were unable to establish sufficient details about the individual or his activities to suggest he was an appropriate person to handle these significant amounts of money. The trustees claimed to have references for him but would not show them to investigators.
The trustees effectively had no control over the distribution of funds once these left the charity’s bank accounts in this country. Furthermore the trustees were unable to provide a satisfactory explanation for certain missing funds having admitted that by their own reckoning, 10% of the funds sent to Iran could not be accounted for. The trustees were also unable to show that adequate financial controls were in place over the distribution of funds through a complex network of intermediaries.
During the Inquiry investigators sought information from other Government Departments including the Department for International Development and the Foreign and Commonwealth Office. These bodies had no knowledge of the charity operating in Iran. Representatives of Charities that operated in Iran were also asked whether they had had any contact with Iran Aid during their relief work; none had. These discussions also gave rise to serious doubts that a charity would be able to run such a large covert organisation inside Iran, supporting some 14,000 children, without it being detected by the authorities and stopped.
In other words, the money wasn’t going where the trustees of Iran Aid claimed it was, and it certainly was not going to support the 14,000 children it claimed to be helping. In addition, about 10% of the money (about £500,000 per year), was probably being skimmed…by someone. Was it the “middleman”? No one seemed to know, and that question has not been answered conclusively.
Millions of pounds were simply disappearing into a “black hole”…and no one seemed to be able to say where all that money was going.
During its Inquiry, the Charity Commission determined that the trustees of Iran Aid had not met their obligation to maintain proper records. When the Commission pressed the matter, staff at Iran Aid staged a sit-in at the charity’s Barnet-based offices, preventing officials from gaining access to records and accounts. This sit-in lasted 20 months. At one stage, Iran Aid workers threatened to commit suicide if the documents were removed from the building, and police advised the Commission to back down to avoid public disorder.
Eventually, following a High Court decision which would have permitted the Charity Commission to examine Iran Aid’s records, those records were illegally destroyed. While the Commission claims to have reported this to the police, Freedom of Information enquiries made by a concerned individual could find no police department willing to admit having investigated the matter.
Iran Aid was dissolved, and £600,000 of its remaining assets were turned over to a new independent charity, the Iran Aid Foundation, in 2001.
What is the Mujahadin-e Khalq?
The original complaints which set off the Charity Commission Inquiry claimed that the money raised by Iran Aid was going to support the MEK, which at that time was a proscribed terrorist organisation in the UK and the United States.
But the MEK seems to be more than a terrorist organisation: former members and external analysts have described it as more like a cult.
This fascinating yet horrifying 2007 video, produced by Al Jazeera, delves into the workings of the MEK, which began as a paramilitary group and evolved into a cult of personality:
The MEK, or the People’s Mujahadin of Iran, is a terrorist organisation. Masoud Rajavi is the leader of this bizarre Iranian cult who over the years helped Ayatollah Khomeini overthrow the Shah, then declared war on the Islamic Republic, ruthlessly killing their fellow countrymen. They allied themselves with Saddam Hussein but now that he’s gone, are ardent supporters of the Coalition. The MEK has switched allegiances so often that any underlying ideology is long gone. But one fundamental tenet remained: personal power.
Masoud Rajavi claims to be a bridge between his followers and God, and the faithful believe him. Rajavi is a master of human psychology. He manipulated his followers’ weaknesses until they are prepared to do anything for him. One woman carried cyanide capsules in her mouth for two years, ready to die for her leader.
The video, which is well worth a look, describes how Rajavi manipulated his followers, turning them into dedicated warriors ready to kill on command. Some started to question their leader, however, when he asked them to kill children:
[Announcer:] In 1991, at the height of the first Gulf War, Saddam found a new use for Rajavi. He ordered the MEK to help put down the uprising of the Iraqi Kurds, with maximum force.
[Interviewee:]…(T)he MEK used heavy artillery against anyone who was in their way. It didn’t matter if the person was an innocent civilian, a man, a woman, or even a child. The MEK shot anyone who came in their way through the town.
[Announcer:] Majeed’s platoon killed most of its captives, but one was handed to the Iraqis to be executed.
[Interviewee:] They brought this little boy, who was hit in the stomach and was suffering a lot. The MEK didn’t give him any medical help or even a glass of water. The next morning, they handed the boy to the Iraqi authorities, and the Iraqis killed him right there and then. I can never forget the screams of the boy, who called, ‘Baba! Baba!’ asking for his mother. Those words still echo in my head.
From its earliest days, the MeK had had tight social bonds, but these began to be transformed into something more sinister during the mid-1980s after the group’s leaders and many of its members had relocated to Paris. There, Masoud Rajavi began to undertake what he called an “ideological revolution,” requiring a new regimen of activities—at first demanding increased study and devotion to the cause but soon expanding into near-religious devotion to the Rajavis (Masoud and his wife, Maryam), public self-deprecation sessions, mandatory divorce, celibacy, enforced separation from family and friends, and gender segregation.
Prior to establishing an alliance with Saddam, the MeK had been a popular organization. However, once it settled in Iraq and fought against Iranian forces in alliance with Saddam, the group incurred the ire of the Iranian people and, as a result, faced a shortfall in volunteers. Thus began a campaign of disingenuous recruiting. The MeK naturally sought out Iranian dissidents, but it also approached Iranian economic migrants in such countries as Turkey and the United Arab Emirates with false promises of employment, land, aid in applying for asylum in Western countries, and even marriage, to attract them to Iraq. Relatives of members were given free trips to visit the MeK’s camps. Most of these “recruits” were brought into Iraq illegally and then required to hand over their identity documents for “safekeeping.” Thus, they were effectively trapped. …
Although a large portion of the NCRI’s funding was provided by Saddam Hussein and some came from Saudi Arabia, the NCRI also raised money through fraud. For example, until recently, MeK supporters sought donations at airports and public parks, often showing gruesome pictures of women who had been tortured by the IRI, by claiming to raise money for human rights victims in Iran but funneling the money to the MeK instead. The FBI arrested seven MeK supporters for raising more than $1 million for a sham charity, the Committee for Human Rights in Iran, at Los Angeles International Airport.
The British Charities Commission closed another MeK sham charity, Iran Aid, after finding no “verifiable links between the money donated by the British public [approximately £5 million annually] and charitable work in Iran.” The German High Court closed several MeK safe houses, “foster” homes, and compounds after an investigation revealed that the MeK fraudulently collected between $5 million and $10 million in social welfare benefits for MeK children sent to Europe at the outset of the first Gulf War.
Where does Belinda come in?
Belinda’s longstanding involvement with Iran Aid is well known, though she has never admitted the nature or extent of her role in the organisation. However, she has left behind numerous tantalising hints of where her interests lay.
In December 1998, for example, as the investigation into Iran Aid was just taking off, we find Belinda writing in the “Letters to the Editor” section of The Independent:
Sir: As the dust of the last week’s futile bombing raids on Iraqi towns and bases settles and we move into the, hopefully, reflective period of Christmas and year end, it might be an appropriate moment to ponder on the Government’s dealing with Iraq and its next-door neighbour, Iran.
All year there has been the spectacle of our Foreign Office sidling up to the murderous mullahs (who are suddenly handing out oil contracts), lauding by turn the new “liberalism” perceived to be prevailing under President Khatami and his “rule of law”. Salman Rushdie is publicly mollified (and privately gagged) and there is a scramble to comply with Tehran’s orders to “close down” all groups working from this country purported to be in opposition to the Iranian government (first in line being the UK-registered charity Iran Aid; after 15 years of rescuing children orphaned by the regime its funding has been cut off).
On the other hand Saddam Hussein continues to be presented as number one Bogeyman, the sledgehammer comes out again to crush him and his people and Iraqi opposition groups are invited to tea in Whitehall.
Make no mistake, the regimes in question are still equally horrible, so we could ask, which of the two diametrically-opposed policies is the “ethical” one – or are they both?
She signs this curious missive, “BELINDA MCKENZIE, Friend of Iran Aid, London N6”.
Eleven years later, she’s still a fan of the MEK (which she calls by its English name, the PMOI):
This story concerns the Iranian opposition hunger-strike in Grosvenor Square, now in its 38th day. The 12 who have taken no food at all throughout the whole of August are supporters of the People’s Mojahedin Organisation of Iran (PMOI) which has been battling the regime of the ayatollahs for the best part of 30 years. Their headquarters since 1986 has been a sprawling complex out in the desert north of Baghdad in Iraq known as Ashraf City or Camp Ashraf.
On 28th July Camp Ashraf was brutally attacked by Iraqi security forces and 11 of the 3,500 inmates killed, 400-500 wounded and 36 men, included several wounded in the raid, abducted to an unknown location. 5 weeks later it is known that these 36 hostages continue to suffer torture and are in a state of severe exhaustion.
There is little doubt that the Iranian regime was directly behind this atrocity. Several of the thugs who beat up the inmates of the camp with iron bars, batons spiked with nails and chains and sprayed them with jets of boiling water were heard calling to each other in farsi (Persian). The head of the Iraqi government, Nuri al Maleki is known to be friendly towards his counterparts in Tehran, who are using the opportunity of US/UK withdrawal from Iraq to extend their influence in the war-torn country. Ahmadinejad who in his capacity as State Prosecutor under Khomeini personally supervised the torture and shot thousands of PMOI dissidents in the 1980s was doubtless hoping get Ashraf wiped off the map of Iraq and the PMOI excised from the page of history for ever.
Well so he may have hoped – but now, despite the attempts of the Iranian government’s friends and appeasers who include President Obama and our own government to turn a blind eye to the incident, thanks to the internet news has got out and there has been an outcry from around the world, most notably within Iraq itself where the PMOI enjoy enormous popularity. They are seen as a bastion against the Iranian regime and also as a profoundly humanitarian organisation on account of their care of local war-victims. The Iranian resistance, as the PMOI like to call themselves, has friends in many of the world’s parliaments including our own, where a group of some 30 distinguished members of the British House of Lords have been warmly supportive of them for many years and recently helped get them removed from the UK & EU terrorist lists.
What shocks everyone is the sheer cynical destructiveness as well as savagery of the raid in which bulldozers and armoured jeeps were used to mow down the inmates of the camp as well as raze many of its amenities. Prior to the raid Ashraf City with its well-tended gardens, sports facilities, library, schools, hospital and concert-hall was an oasis of order and civilisation. Furthermore, the residents of whom a third are women were totally unarmed and defenceless, their weapons having been confiscated in 2003 by the incoming US forces. Each resident received at the time a signed guarantee of protection by the US military, in addition to the right of protection to which they are entitled under the 4th Geneva Convention.
The 12 on hunger-strike in London, 6 of whom are British citizens as well as having relatives in Camp Ashraf, are growing weaker by the day but remain determined the US must fulfil its moral and legal obligation to protect their loved-ones in Iraq. They will go to the death if needed. “We have to do this, there is no other way” they say. Above them however, the bald-headed eagle atop the brass-and-concrete façade of the Embassy carries on looking the other way and the hours tick by monotonously, with little sign that any going in or out of the imposing building opposite the small, placard-encrusted encampment with its neat row of beds are the slightest bit concerned…
CALLING ALL HUMAN BEINGS! whether Iranian or British, please come and meet 12 of the bravest people in the world at an ‘Evening of Solidarity’ on Saturday 5th September in Grosvenor Square, 6-8pm. Your presence will help send a strong message to the US government and to the Tehran regime as well as to the hunger-strikers that they are not alone and that the world is watching.
Belinda McKenzie 3rd September 2009
Belinda and her Iranian husband Esmail Vafa Yaghmaei, who currently lives in France, were at one time vocal in their support of the MEK.
In 2009, they could be found standing together in Trafalgar Square and outside the Iranian Embassy, urging passersby to “support a free world” by supporting the MEK:
The MEK founded Camp Ashraf, which was really more like a small city, in 1986. Named for the murdered wife of MEK leader Rajavi, Camp Ashraf housed between 3,500 and 4,000 MEK members at any given time. In keeping with the MEK’s cult-like control of its members, the majority of the city’s residents were denied contact with the outside world, and their families were banned from visiting them.
According to a report from a human rights organisation, one of the teen residents of Camp Ashraf as of 2006 was Amir Vafa Yaghmaei, a Swedish citizen who was helped to leave Ashraf after two years with help of Swedish government.
His father, Mr. Esmaeil Vafa Yaghmaei was so loyal to Mr. Rajavi at NCRI that he ignored several requests by his own son, who was 16 when sent to Iraq, and refused to help him. Amir was abused inside Ashraf and also in US Camp, TIPF, for almost 2 years.
Clearly, at that time Mr Yaghmaei was a devoted member of the MEK cult, so devoted that he could ignore the pleas of his teen-aged son to help get him out of a situation in which he was subject to abuse.
The wind shifts
However, at some point between 2009 and early 2015, something seems to have happened, a sea change if you will; by 2015 Mr Yaghmaei and Belinda had changed their tune quite drastically.
We don’t know what prompted them to begin to see their former MEK friends in a different light, but in the 30 January 2015 edition of Iran-Interlink, a doggedly anti-MEK website, we find Mr Yaghmaei being downright snippy:
Internal critic Esmail Vafa Yaghmaei wrote to expose the MEK’s deception of an English activist and friend Belinda McKenzie. The MEK took money from her through unethical influence after persuading her to re-mortgage her house and hand over around £300,000 which they promised would be repaid “after the overthrow of the Iranian regime”. Yaghmaei tells the MEK he will sue if they don’t return her money now. The MEK responded through the NCRI to say ‘these are the actions of the Iranian Intelligence Ministry’, and accused Yaghmaei and McKenzie of being part of a conspiracy to start a new court case against the MEK.
The MEK also published tens of receipts and cheques made out to Yaghmaei and two other former NCRI members, Karim Ghassim and Mohammad Reza Rowhani, saying they have received thousands of pounds from the NCRI, but with no further explanation. The MEK admits it took McKenzie’s money but said it agreed to pay this back after the MEK “topples the Iranian regime”. The MEK also offered a veiled threat by accusing McKenzie of having worked with Iran Aid charity – which was closed by the Charity Commission – with the implication that she had been involved in its wrongdoing [money laundry].
This seems to raise more questions than it answers. For example, what sort of “unethical influence” did the MEK use to persuade Belinda to re-mortgage her house and give them £300,000? Are we wrong in thinking that this sounds an awful lot like blackmail?
This is borne out a few sentences later, with the MEK offering a “veiled threat by accusing McKenzie of having worked with Iran Aid charity…with the implication that she had been involved in its wrongdoing [money laundry]”.
In a since-deleted post on her Knight Foundation blog, Belinda attempted to answer this charge. First she said,
It was always my intention to work full-time for the benefit of humanity once my children were grown up and had left home. This moment for me coincided with my having received a substantial inheritance, £4 million to be precise from my wealthy landowner father on his death in 1996. £I million of this money I used to buy my sons and daughter their first flats, £2 million I put into a Trust for them and their future children and the remaining £1 million I resolved to devote to humanitarian good causes, as and when need presented itself.
However, a few paragraphs later, she said that she had donated “some £1.7 million in all to this cause, including taking out a mortgage on my house”. Somehow, the £1 million from her father had morphed into £1.7 million…during the bearish stock market of the 1990s.No inference of “unethical influence” here—far fom it. Belinda paints herself as a devoted humanitarian, not a person whose involvement in a fraudulent charity could have opened the way to insinuations that she was involved in such criminal activities as funding a terrorist organisation or engaging in money laundering.
Which brings us back to those heady years at Iran Aid, when it was shipping off £5 million per year to the MEK.
We wonder: was Belinda put in the position of having to personally fill part of the shortfall for her “Iranian friends” once the Iran Aid funding dried up?
It is not inconceivable that the MEK would be in possession of evidence that their English benefactress had been involved in less-than-legal activities, and that they might have, in a fit of pique, suggested to Belinda that it would be in her best interests to re-mortgage her house and give them a share of the proceeds. Re-mortgaging a house is no small affair, and we think one would have to be under significant pressure to consider doing so, simply in order to make a charitable donation.
And we do know that the MEK and its UK fundraising organisation, Iran Aid, were in the habit of making use of large, threatening-looking gentlemen to persuade people to donate an appropriate amount.
Of course this is mere hypothesis on our part, but it does open up some interesting avenues of investigation for anyone who might be interested.
Over the months that the Hampstead hoax has dragged on, a recurring question has kept popping up about one of the hoax’s originating voices, Belinda McKenzie: “What about Iran Aid?”
One of our regular readers, Fairly Sane, is better acquainted than most with Iran Aid, and was kind enough to put together a fascinating and very telling recollection of his dealings with the charity:
Iran Aid was a highly irregular organisation which was closed down in 1998 by the Charities Commission after refusing to allow its accounts to be inspected. Millions of pounds of donations disappeared into a foreign bank account and all the charities records were conveniently destroyed in a fire at its offices.
Most people at Hoaxtead probably know this much, and that Belinda McKenzie and her “husband” Esmail Vafa Yaghmaei were heavily involved (though they claim NOT to have benefitted personally from its funds). What might be hard to understand is how an obscure organisation could rake in an estimated £5 million a year.
The answer is that they did what Belinda McKenzie does best: latch onto vulnerable people and exploit them shamelessly. I know this from personal experience. As the events I am about to describe took place nearly 20 years ago, my memory may not be perfect, but I will attempt to write as accurate an account as I can.
In the early 1990s I was a fairly naive young man studying in Edinburgh. One cold day, on a windy corner in the New Town, I was stopped by a young woman in a head scarf. She asked me if I could help her and if I was interested in Human Rights. I was at the time very keen to become involved with political matters and therefore stopped to talk to her.
She carried with her a large photo album with leather effect covers which she opened to reveal a selection of the most horrific images of torture victims I had ever seen. I was stunned. When she asked me if I could make a donation to her charity which helped the victims of torture in Iran, I was quite willing to take out my cheque book and make a donation of £75 (which I really couldn’t afford).
When I arrived at my college later that day I obviously looked disturbed enough for a friend to enquire what was the matter with me. I told her that I had made a donation to charity; she said “Not to those people with the horrible photos!”
I must have given some details to the young woman in Edinburgh, as for years afterwards I received Christmas cards from Iran Aid. These usually contained a message thanking me for my support and had distinctive designs, usually of children of all nations holding hands around a globe, or doves rendered in batik.
On the 6th of September 1997, right in the middle of Princess Diana’s funeral service, I received a phone call: “I am phoning from Iran Aid, some of our representatives would like to call at your home to thank you personally for your support”.
I didn’t agree to that, I was already suspicious of what these people were about, but I did agree that they could call on me at my place of work one lunch time. A date was arranged, but I thought I should do some homework on Iran Aid before the meeting.
We had the internet at work and I was able to use it to look up the number of the Charities Commission. I made a phone call and asked if Iran Aid was a legitimate charity. The reply I got was, “Iran Aid is a registered charity.” But this was said in such a precisely phrased and weary manner that I wasn’t entirely reassured.
I worked in a small office in a northern town at this point; I was very busy and not very well paid. At lunchtime on the appointed day the office emptied and I awaited a knock at the door. When it came I was confronted by a pair of Middle Eastern gentlemen in suits and raincoats.
One was grey-haired and spoke very little, the other was younger, had an enormous moustache and was very chatty. They asked if there was a private office where we could talk. I showed them into the back office which was unoccupied. I took a seat behind a desk, and they carefully arranged themselves in office chairs between myself and the door.
After introductions the first one began his spiel: “Thank you so much for your donation. Now to continue our work, could I ask you to commit to a regular donation of just £3,000…”
Unbelievably, up until they arrived, I had thought about making them a further donation for their humanitarian work—but my mind was changed fairly quickly. “We work to protect the children of political dissidents … these children need to be hidden from the Iranian state.”
From a clear plastic folder he starts producing photos of children, probably of primary school age. The images are grainy, the children are in nondescript settings, with white walls and slightly tarty furnishings, which could have been a house in Tehran, but might just have easily been Benidorm or Salford.
I protested that I really could not afford to spend that sort of money; he replied, “Why not just half of that, £2,000, the children really need your support.” I noted early on that his grasp of mathematics was decidedly rum. “We have a supporter who is a single mother who has taken on a second job to help the children.”
He then produced a second plastic folder; this contained letters to the children written by charity supporters. It struck me as odd, firstly that he had showed me the photos of the oh-so-secret and vulnerable children without really knowing who I was, and that he should also show me a folder full of what was effectively other people’s private correspondence.
Many of the letters contained photographs of the donors, they were in the main elderly ladies. Bartering over the amount I could afford to donate continued, division by two usually resulting in two-thirds of the original sum, and the younger mans approach began to get decidedly weird.
“See the little ‘x’s this lady has put on her letter, these are kisses—and the little hearts, they are toffee kisses…” He leaned close then stopped, probably seeing my look of horror in response to his inappropriate sexual advance. I was in a position where I physically couldn’t escape; it seemed the only way to get rid of this pair of “charity collectors” was to give them what they wanted.
I signed a standing order for £200 and they were off like a shot! My boss was nearly mown down by them as he returned to work. “WHO THE HELL WHERE THEY?” he asked. I told him they were charity collectors, “Charity collectors my foot, THEY ARE BLOODY CROOKS!”
I changed my bank account details before any money could be withdrawn. I phoned the Charity Commission to make a complaint; the weary-sounding man I had first talked to explained that there were a lot of complaints about Iran Aid and their methods “and we don’t know where any of the money is going to.”
My father has contacts in the Police Force and I made a full and detailed statement to an officer who was particularly concerned about the number of elderly ladies who appeared to be victims of this organisation.
After that I heard nothing, apart from receiving the odd card from Iran Aid, which quickly found itself in my bin. Whatever, if anything, Iran Aid did as a charity, its fundraising methods were nothing short of intimidation and extortion.
It was only more recently when I discovered that Belinda McKenzie was involved with this charity, and with several hoaxes which exploited vulnerable people, that I felt I should revisit my own experiences.
Fairly Sane, we very much appreciate you telling your story. It’s a compelling glimpse into the charity, and says something about the lengths to which Belinda has been prepared to go in pursuit of funding for her various ill-fated ventures.
UK Charity Commision’s report on one of the Mek’s Financial resources.
(Registered Charity 326460)
1. This report is the statement of the results of an Inquiry under Section 8 of the Charities Act 1993.
2. Iran Aid (the charity) was established by declaration of trust on 20 September 1983 to provide for the relief of conditions of need, hardship or distress of Iranian refugees and Iranians in Iran who are in necessitous circumstances. The proposed beneficiaries were orphan children in Iran who were in need as a result of their families being opposed to the Iranian government.
3. In March 1998 the Charity Commission received allegations that the charity was being used by a terrorist organisation, the Mujaheddin el Khalq (MKO), to raise funds. Under the Terrorism Act 2001 the MKO is now a proscribed organisation. Those making the allegations insisted on their details remaining confidential. This is not unusual in Inquiry cases.
4. In view of the possible political motives of any complainants, the Commission took what steps it could to establish the bona fides of the allegations. As a result of these enquiries the allegations were considered to warrant further consideration. However, because of the difficulty in obtaining verifiable and reliable evidence either proving or disproving links with a terrorist organisation, investigators decided to concentrate their enquiries on whether or not the charity spent its funds on its intended beneficiaries. The trustees have always denied links with terrorist organisations.
5. A previous Inquiry in 1996 resulted in the charity being warned about its fundraising methods. Despite this warning complaints from the public about Iran Aid’s fundraising methods reduced but continued at an unacceptable level.
6. On 8 May 1998, the Commission instituted an Inquiry under section 8 of the Charities Act 1993.
Formal Actions Taken
7. On 22 July 1998, after obtaining information from the charity’s bankers about the destination of the charity’s funds, the Commission froze Iran Aid’s bank accounts. The Commission was concerned to find that the funds, some £5 million per year, were all paid into an individual’s account in a country other than Iran.
8. On 23 July 1998, on the basis of information already obtained about the charity’s activities and the possible risk to its funds, a temporary manager known technically as a Receiver and Manager was appointed. He was appointed to carry out a range of duties including: –
The management of the affairs of the charity whilst the Inquiry took place
An assessment of the methods used by the charity to distribute its funds
Formulating recommendations as to the long-term viability of the charity.
9. As soon the Receiver and Manager took control of the charity’s bank accounts the Commission unfroze them.
10. The Commission served Orders on the trustees requiring them to provide the charity’s records and in particular, those relating to payments to its beneficiaries.
11. On 6 November 2000, following a period of public notice, the Commission established a scheme. This had the effect of directing the Receiver and Manager to dissolve the charity and pass its net assets to a newly established independent charity, the Iran Aid Foundation (Charity 1082759). This new charity had been formed, following discussions by the Commission with supporters of the charity, for the purpose of receiving these assets.
12. In establishing how the charity operated and how it spent its funds the Commission came to the following findings and conclusions.
13. The Commission’s Inquiry identified a number of concerns about the charity’s fund-raising methods. These concerns included:-
That some donors were misled into believing that they were personally sponsoring individual children when this was not in fact the case. The Commission concluded the sponsorship to be spurious and misleading.
14. During the previous Inquiry into the charity’s fund-raising activities, the Commission warned the trustees of the importance of conducting public fundraising properly. The present Inquiry highlighted similar concerns over the propriety of fundraising activities. In particular there were examples of misleading promotional literature, complaints by donors about high pressure “selling” techniques and an apparent failure to separate funds raised for different projects.
15. The Commission’s attempts to investigate fundraising issues further were hindered by the inability of the trustees to identify properly those volunteers responsible for fund-raising, and more particularly by the trustees’ inability or unwillingness to identify the co-ordinators apparently responsible for organising the volunteers.
The charity’s records
16. From the Commission’s enquiries it was apparent that the trustees had not met their obligations to maintain proper accounting records. These obligations arise under the requirements of the charity’s own governing document, statute and the common law duties of trustees. The Commission and the Receiver and Manager were unable properly to examine the books and records of the charity or to ascertain fully what accounting records existed. This was caused by a lack of co-operation on the part of the trustees, and an unlawful occupation of the charity’s premises that occurred between October 1998 and June 2000. As a result, the Commission was unable to conclude that the accounting records required by law existed or were properly kept. The occupation raised the following issues:-
17. The occupation of the charity’s premises started with the expressed intention of denying the Commission and Receiver and Manager the full access to records that both were legally entitled to receive. The trustees said that they played no part in this illegal occupation and could not identify any of those responsible, but the occupation had a deleterious effect on the Commission’s ability to scrutinise the charity’s records.
18. The occupation also raised serious concerns about the charity’s ability to operate in the future. Those in occupation made it clear that they were unwilling to permit any access to the charity’s premises and records unless the Commission allowed the charity to function as it did before the Receiver and Manager was appointed. The occupation ended with the destruction of all records that might have been expected to show how the charity distributed its funds.
19. Prior to the occupation the trustees had applied to the courts for a temporary injunction preventing the removal by the Receiver and Manager of the charity’s records. The High Court refused an application by the trustees of the charity to extend this temporary injunction and made it clear that the Receiver and Manager had a right of possession and control over the charity’s records. In the Court’s view the assurances given to the trustees about the security of the records were proper and entirely adequate.
Transmission of funds to Iran and their application.
20. During the course of the Inquiry neither the Commission, nor the Receiver and Manager, were able to see any substantive and verifiable evidence to show how the charity spent its funds in Iran, or even that the funds eventually arrived there. As a result the Commission was unable to confirm that funds reached Iran or were applied in the furtherance of the charity’s objects.
21. The trustees maintained that the methods used to transmit and distribute funds were necessary, taking into account the vulnerability of the recipients and the circumstances in Iran. However the way that this was carried out was inherently unaccountable, and was incapable of any independent verification.
22. The charity’s funds were all sent via a middleman based in the Middle East, but not in Iran. The Commission interviewed this intermediary in Germany with the aim of establishing the reason for the charity transmitting its funds in this way and how these funds might then reach the charity’s beneficiaries in Iran. Despite this interview, investigators were unable to establish sufficient details about the individual or his activities to suggest he was an appropriate person to handle these significant amounts of money. The trustees claimed to have references for him but would not show them to investigators.
23. The trustees effectively had no control over the distribution of funds once these left the charity’s bank accounts in this country. Furthermore the trustees were unable to provide a satisfactory explanation for certain missing funds having admitted that by their own reckoning, 10% of the funds sent to Iran could not be accounted for. The trustees were also unable to show that adequate financial controls were in place over the distribution of funds through a complex network of intermediaries.
24. During the Inquiry investigators sought information from other Government Departments including the Department for International Development and the Foreign and Commonwealth Office. These bodies had no knowledge of the charity operating in Iran. Representatives of Charities that operated in Iran were also asked whether they had had any contact with Iran Aid during their relief work; none had. These discussions also gave rise to serious doubts that a charity would be able to run such a large covert organisation inside Iran, supporting some 14,000 children, without it being detected by the authorities and stopped.
25. The trustees did not co-operate fully with requests for information from the Commission’s investigators or the Receiver and Manager. Notwithstanding the trustees’ claims that records and evidence existed but were no longer available to them, the trustees did not assist even when the information requested was expected to be within their control and ability to deliver.
26. Having fully considered the evidence, including the trustees’ responses to our enquiries, the Commission was satisfied that that there had been, at the very least, mismanagement in the affairs of the charity. It was also necessary or desirable for the Commission to act to protect the property of the charity, or secure a proper application for the purpose of the charity. The conditions prescribed by section 18(1) of the Charities Act 1993, needed before the Commission could take formal remedial action, were therefore met.
27. A remedial scheme was established which had the effect of directing the Receiver and Manager to dissolve the charity and pass its assets to a new independent charity, the Iran Aid Foundation.
28. During the occupation of the charity’s premises Commission staff held meetings with a number of people who might have been able to influence the occupiers to allow the Commission access to the records. A final decision on the future of the charity was delayed while these discussions took place. During these discussions the idea of setting up a new charity to carry on the charitable work of Iran Aid, but under a differently constituted trustee body, emerged. The Commission was pleased to be able to facilitate this.
29. The Commission reported the illegal destruction of the records to the police, as an offence under section 11 of the Charities Act 1993 appeared to have been committed. At the time of publication of this report police enquiries are ongoing.
30. In order to support public confidence in the integrity of charity generally, the activities of any charity must be verifiable and accountable and permit effective supervision by the Court or the Commission should that prove necessary. A charity may be required to produce any document to the Commission where it is relevant to the Commission’s statutory functions.
31. Charities working in circumstances where the identity or other information about beneficiaries needs to remain confidential have the same requirement of any other charity to keep records that will, if called for, allow for effective supervision by the Commission.
32. S41 of the Charities Act 1993 requires charity trustees to ensure that accounting records be kept which are sufficient to show and explain all the charity’s transactions.
33. S 506 of the Income and Corporation Taxes Act 1988 provides that a payment made (or to be made) to a body situated outside the United Kingdom shall not be qualifying expenditure for the purposes of tax concessions unless the charity concerned has taken such steps as may be reasonable in the circumstances to ensure that the payment will be applied for charitable purposes.
34. Charities that fundraise, especially when the fundraising activities take place across a wide area or through a network of volunteer collectors, must ensure that their control systems are sufficiently rigorous to ensure proper compliance with good practice so as not to bring the name of the charity, or charities in general, into disrepute.
35. Trustees must be able to devote sufficient time to their duties to effectively monitor the actions of their senior volunteers or staff. In the case of a charity which is run effectively on a day to day basis by volunteers the trustees should be aware of the identities and addresses of these individual and the duties they carry out.