TORONTO, Ontario / The Star / News / April 8, 2011
Seniors charity executive Morris Jesion is under fire for stockpiling gold using charity funds.
Dale Brazao/Toronto Star
By Jesse McLean and Moira Welsh, Staff Reporters
A lottery and government funded charity that is supposed to improve quality of life for Ontario seniors has used a big chunk of its donated money to stockpile gold. The Ontario Society (Coalition) of Senior Citizens’ Organizations (OCSCO) is under fire from some directors on its board who say it must use that gold to help the elderly and also stop spending so much money on travel and salaries.
Frustrated directors say demands that he open the books have led to heated arguments with executive director Morris Jesion in the society’s Wilson Ave. boardroom near Bathurst St. An independent audit ordered by a board committee in 2009 was never done.
“I have never heard of a non-profit having gold bars stored in some unknown location,” said board co-vice chair Arlene Patterson. “We do not receive a balance sheet showing the assets of the organization. It’s bizarre.”
Saying its mission is to “improve the quality of life for Ontario’s seniors,” the society collects about $500,000 each year, from break-open lottery ticket proceeds as well as provincial and federal grants. However, about 60 per cent of that goes to pay salaries, consultants and administrative costs.
Money that is supposed to be spent on education programs for seniors is instead used to reimburse board members who travel across Ontario for meetings every two months — some paying $900 for each trip.
A lumbering man with a beatific smile, Jesion said the society’s advocacy and education programs, from multicultural fairs to computer training, have helped seniors across the province.
“We help thousands and thousands of seniors, low-income, in many, many different ways. Advocacy alone is worth more than the $500,000 in benefits, let alone the programs that we’re funded to do,” he said.
“Our focus is on the people who can’t speak for themselves because they don’t have the wherewithal.”
But when asked about the independent audit that was never done or charity money being used to buy gold, Jesion’s smile vanished.
“You have information that is private information,” he said.
Roughly half of the charity’s assets are invested gold, totalling at least $208,000, according to 2009 investment documents.
Former staff members said Jesion would keep gold in the charity’s office before depositing it in a bank.
Jesion said the gold (which appear to be both gold wafers and gold shares) weren’t bought with grant money or lottery proceeds, but with other donated money. He defended the purchases as a “smart” investment that is separate from the charity’s day-to-day operations.
“It’s for our reserves,” Jesion said in an interview. “You prudently put away money for a rainy day.”
The charity posted a $36,000 deficit last year but Jesion said it “isn’t large enough” to dip into the gold stash.
Instead, he said the society will try to plug the budgetary hole by raising more money — the lion’s share of which came from lottery ticket sales over the past two years.
The society is licenced to sell break-open tickets by the Alcohol and Gaming Commission of Ontario. The charity pays a handful of marketers to help sell the 50-cent cardboard tickets in convenience stores from Chatham to Manotick.
Board secretary Mary Hynes said the people buying the tickets are vulnerable seniors — the very people the charity seeks to help.
“The (lottery ticket) money is coming off the backs of seniors and poor people across Ontario and we are putting it into salaries — I don’t think that is the best use of money,” she said.
In 2010, the society pulled in $348,224 from lottery tickets and another $164,000 mainly from grants, bingo events and donations.
Nearly $304,000 went to salaries for Jesion, two full-time staff, a part-time bookkeeper and consultants.
There are limits on how a charity can spend lottery earnings. When it applies for a break-open ticket licence, an organization must outline what charitable programs the money will fund, said Lisa Murray, spokesperson for the alcohol and gaming commission.
The funds go into a trust account so the province can track that “you pay for the things you say you’re going to pay for,” Murray said.
Charities must also file periodic reports on their ticket sales.
The charity has been approved to spend the lottery money on three areas: education programs, joint programs with member organizations, and counselling, information and referral.
The Star obtained copies of the charity’s 2010 budget expenses and found it had tucked questionable costs into these approved areas. Rent appears under counselling and information, while travel is in education.
Jesion defended the expenses.
“This is all program expenditure. Some are salaries, some are non-salaries. I look at it like they’re all programs,” he said.
Expenses from the society’s bi-monthly board meetings are classified as education because the charity hosts speakers at each meeting, Jesion said.
Typically, the Canada Revenue Agency encourages charities to use dollars earmarked for education to educate a broad sector of people.
Jesion’s charity insist the board meetings are educational because “the actual board meeting is a learning experience,” said charity co-chair Colin Benjamin. Board members are informed about issues from pensions to healthcare and the information appears in the society’s newsletter.
The charity started in 1985 when two busloads of seniors’ activists trekked from Toronto to Ottawa to protest a proposal that would reduce benefits for the old age security pension.
Today, the society’s membership includes about 170 seniors’ organizations from across Ontario, Jesion said.
However, several board members and former employees say the charity has done little in recent years.
The society’s 2010 annual report boasts three pages of programming. It details a workshop in Sudbury to discuss the challenges seniors face in rural areas; computer training for seniors across the Greater Toronto Area; and five multicultural fairs.
But critics say the society is piggybacking on the success of other groups, which organized and ran several of the events and programs while the society either helped fund or oversee them.
“I think it’s puffed-up. It’s a good PR exercise that we’re not getting a half-million dollars value out of it,” said board member Paul Delahanty.
Jesion dismissed the charges that the society’s programming is overvalued, pointing to the charity’s advocacy work. Jesion said he has regular meetings with the Ontario Seniors’ Secretariat.
The board is composed of 19 members including luminaries in the world of seniors’ activism, such as Ethel Meade and Bea Levis, who support the society’s role as advocator and educator. Meade crafts position papers for the society on issues such as retirement home regulations.
The Star found that much of the charity’s important advocacy work is free by volunteers. Meanwhile, board members are kept in the dark.
“We get very little details of the activities, costs or results. We are simply told that a lot of people came and were delighted,” Delahanty said.”
Following several staff complaints in 2009 about the charity’s operations, the board created a special committee to investigate.
Among its findings, the committee concluded that information was purposely being kept secret and that “full disclosure and transparency are less than expected.”
The board agreed to have an independent audit to show exactly how the charity money was being spent. The audit was never done because the cost (several thousand dollars) was deemed excessive.
Directors instead met with a volunteer consultant service. Benjamin, who was also on the special committee, said there was no need for an audit.
“We strive for an open, fair, transparent board, regardless of what comes down the pipe,” he said.
But whenever some board members demand answers, they say they’re shut down.
“I don’t suggest anything is fraudulent but we certainly have a lack of transparency,” said Delahanty. “Even as board members it’s difficult getting basic information.”