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Jehovah’s Witnesses facing tax turmoil
Former Jehovah's Witness Lara Kaput says revocation of Watchtower’s charity status would be a ‘watershed moment’.
Picture: Rob Leeson.
EXCLUSIVE
KIERAN GAIR JOURNALIST
@KieranGair
• AN HOUR AGO APRIL 18, 2021
The Jehovah’s Witnesses have taken legal action against Australia’s charity watchdog after it revoked the organisation’s tax-exempt status over concerns with the religion’s opaque global donations structure and alleged failure to protect vulnerable people.
The organisation’s charitable arm, the Watchtower Bible and Tract Society of Australia, which posted an income of $32m in the year to August 31, has been - accused of pushing cash offshore after directors splashed $16m of its total expenses on undisclosed donations and “overseas aid”.
The Australian Charities and Not-for-profits Commission informed Watchtower in November of its intention to revoke the organisation’s charity status, citing a litany of concerns about alleged contraventions of the Corporations Act and a failure to comply with a host of governance and conduct standards.
Lawyer and abuse survivor Alec Spencer, a PhD candidate at James Cook University, said the ACNC’s decision was comparable to the abolition of the socalled “Ellis defence” in NSW in 2018, which ended the Catholic Church’s longstanding immunity to lawsuits.
“If registration were to be removed, it would serve as a wake-up call for many other religious charities who have systemically failed to protect sexually abused children,” he said.
“The removal of charitable registration would be an extraordinary outcome, both for the commission and the religious charity sector in particular.” The charity, which is seeking judicial review of the ACNC’s decision in the Federal Court, has been accused of “operating outside of Australia” and breaching its requirement to protect vulnerable people, including children, when conducting operations overseas.
In a statement, Watchtower director Terry O’Brien denied the ACNC had moved to strip the organisation of its charity registration. “The ACNC has assured the - directors that they do not intend to revoke Watchtower Australia’s charity status,” Mr O’Brien said.
However, court documents filed last week reveal the ACNC sent a notice to revoke Watchtower’s charity registration to the group’s directors in November.
The ACNC has accused Watchtower’s directors of failing to comply with key conduct standards, including a requirement to disclose conflicts of interest and a requirement to protect children who are accessing benefits under the charity’s programs.
If the court upholds the ACNC’s decision, Watchtower will lose its status as a registered charity and will not be entitled to receive tax concessions, including lucrative tax breaks.
According to an application for judicial review filed by Watchtower, the ACNC’s decision is “unlawful” and an “unreasonable and inappropriate exercise” of its discretion.
The organisation, which has nearly 70,000 members in Australia, has allocated almost $120m from 2014-20 to “donations and overseas aid”.
“As a donor, I would be very troubled by this,” Mr Spencer said. “And as a regulator, their hands are tied due to the differential treatment bestowed on basic religious charities.
“The ACNC could deregister a charity but the decision and why that occurs is not disclosed,” he said. “It allows them to operate in a cloud of secrecy.”
Watchtower argues that the decision contains multiple errors of law, including that the legislation confers “no function with respect to child protection” on the ACNC.
The Royal Commission into Institutional Responses to Child Sexual Abuse warned that there were systemic problems within the Jehovah’s Witness religion in dealing with abuse, including a failure to report credible allegations to the police.
The commission heard Jehovah’s Witnesses had documentation of abuse allegations by 1800 children involving more than 1000 perpetrators since 1950.
Former church member and child abuse survivor Lara Kaput said revocation of Watchtower’s charity status would be a “watershed moment” if it were upheld by the Federal Court.
“They were reticent to revoke their charity status because the charity commission knew it would set a precedent, and they don’t want that to happen,” Ms Kaput said.
An ACNC spokeswoman said it was unable to comment on the “particular circumstances of a charity” and whether or not a charity was being investigated.
JOURNALIST Kieran Gair is a reporter at The Australian. He has previously reported and produced for the ABC, Sky News, Sky News Business, and The Sydney Morning Herald. He studied Law and Journalism at UTS.