12/06/2013 04:14 EST | Updated 02/04/2014 05:59 EST

Horse charity HAPPA may have given wrong info to regulator

A Newfoundland horse-protection charity under fire over accountability and oversight issues appears to have filed incorrect information with federal charity regulators, claiming that all board members are “arm’s length” from each other.

That does not appear to be the case, CBC News has learned.

The only current active members of the Horse and Pony Protection Association (HAPPA) board are what appear to be a mother and daughter and what appear to be a long-time couple.

Family members and common-law partners are considered “not at arm’s length” by the Canada Revenue Agency — something that can affect how the agency assesses a charity’s status.

Charities are required to file a form outlining those relationships.

The most-recent HAPPA filing with federal charities regulators available on the agency's website is for the year ending Dec. 31, 2011.

There are eight directors listed. They are all listed as being “at arm’s length” from each other.

Last week, after CBC News started asking questions about HAPPA’s activities, president Dennis Bishop updated the group’s list of directors in the Newfoundland and Labrador registry of companies — something that hadn’t been done in four years.

According to a provincial government form signed by Bishop on Nov. 26, there are now six directors of HAPPA: himself, Erin Walsh, Stephanie Harnum, Lois Banton, Tom Hughes and Cornelius Korpel.

Korpel told CBC News he has no idea what is going on with the charity. He said there have been no board meetings in years.

Another board member, Tom Hughes of Ontario — a nationally renowned champion of animal welfare issues — has been critically ill for a lengthy period.

According to the Animal Welfare Foundation of Canada 2012 president’s report, Hughes “was struck by a very severe illness which has left him physically and mentally incapacitated, and from which he almost certainly will not recover.” That happened nearly two years ago.

Deborah Hughes Davis, who answered a CBC News inquiry sent to Tom Hughes’s email address, said he actually resigned from the board of HAPPA in February 2011.

“He is a 92-year-old man now with failing health,” she noted.

Remaining board members

That leaves four HAPPA board members.

Stephanie Harnum and Lois Banton appear to be daughter and mother.

That relationship is considered “not at arm’s length” by the Canada Revenue Agency.

But HAPPA’s 2011 filing with the agency lists both of them as “at arm’s length” from other directors.

Five former HAPPA board members and insiders said Dennis Bishop and Erin Walsh have been a couple for years.

Common-law spouses are also considered “not at arm’s length” by the Canada Revenue Agency.

But both Bishop and Walsh are described as "at arm's length" in HAPPA's 2011 filings with the federal government.

Bishop filed the forms.

Public records dating back to 2007 list Bishop and Walsh as living at the same address. Other records have her living at her parents’ home.

When Walsh first joined HAPPA six years ago, Bishop’s home address was listed as her home address on the charity’s corporate documents.

A month later, an unrelated federal financial filing listed her as living at her parents’ house.

Bishop got involved with HAPPA in 2009, and was required to list his own home address on the charity's provincial corporate form. Walsh’s address on HAPPA documents filed with the province changed to her parents’ home at that time.

But two years later, when Walsh filed a 2011 civil lawsuit at Newfoundland and Labrador Supreme Court after being involved in a car accident, the statement of claim listed her as living at Bishop’s address.

Last week, Bishop filed a form with the provincial registry of companies, listing Walsh as living at her parents’ address.

On Wednesday, CBC News called the phone number listed for her parents at that address. The woman who answered said Erin does not live there.

Messages left Wednesday and Thursday for Bishop, Walsh, and Harnum were not returned.

CBC News could not locate a phone number for Banton, who, according to HAPPA’s corporate filings, lives in Heart’s Delight.

Questions raised about charity

Earlier this week, a CBC News investigation uncovered questions about HAPPA’s corporate governance and financial oversight.

The charity continues to take donations from the public 18 months after closing its flagship horse sanctuary in Hopeall, N.L.

HAPPA’s revenues — and expenses — tripled in the years after Bishop took over as president. In 2011, the charity says it spent about $60,000. Years earlier, the entire operation was run for under $20,000.

Five former or current board members expressed concerns about the operation of the group, citing a dearth of board meetings and a lack of audited financial statements.

Those statements, while not required by law, were prepared in the past — before Bishop took over as president.

Meanwhile, HAPPA’s treasurer told CBC News she has never seen any financial statements for the charity.

Bishop, who has been president of HAPPA for the past four years, disputes all of those concerns.

“We’re doing the right things for the animals,” he said in a recent interview.

“We haven’t done anything wrong with the animals. We haven’t done anything wrong. There’s no money spent on anything that is not 100 per cent directly related to the animals.”

But a year and a half after the sanctuary’s closure, the HAPPA website continued to solicit donations for hay, and stressed its role in caring for abused horses and ponies in the province.

“Our organization is a registered charitable organization, which operates the Hopeall sanctuary,” the website’s main page noted.

“Our budget is lean and all funds raised through donations go directly to providing care for our horses and ponies.”

On Wednesday, the day after CBC News first aired reports on HAPPA, the website went offline.

Confidentiality provisions

Judith Kays, a spokeswoman for the Canada Revenue Agency, told CBC News she could not answer questions specifically about HAPPA, citing confidentiality provisions of the Income Tax Act.

But in general terms, Kays indicated that it is a charity’s responsibility to fill out the form on relationships between directors annually, so the groups can be properly classified by the agency.

“In filing its annual return, the charity certifies that the information contained in the return is, to the best of its knowledge, correct, complete, and current,” Kays noted in an email.

“As stated on the return, it is a serious offence under the act to provide false or deceptive information.”

And the penalties can be severe.

Kays said a charity that files a return containing false or misleading information can have its registration revoked. 

And any person who knowingly provides such false information could be found guilty of an offence under the Income Tax Act.