Gates of Mercy
Gates of Mercy and The Beth Oloth Charitable Organization
Originally registered as a charitable organization in 1991, Gates of Mercy operated as what I’ve termed a ‘burner charity’ and conducted minimal business up to 2007. In 2008, however, Gates of Mercy experienced a significant increase in activity, receiving total donations of over $5.4 million CDN. Over the next several years Gates of Mercy’s activity grew exponentially; between 2009-2011, it brought almost $47 million CDN in donations.
In 2012, Gates of Mercy experienced its first audit – for activities conducted between 2008–2010. The CRA’s audit found that Gates of Mercy had “failed to retain direction and control over the use of its funds,” and had no means to demonstrate or ensure these funds were being utilized for its own charitable activities. Gates of Mercy had also failed to keep “adequate books and records”, had “issued receipts not in accordance with the [Income Tax] Act” and had failed to “file an information return in prescribed format”.
Rather than trigger a criminal investigation, Gates of Mercy simply entered a compliance agreement with the CRA in 2012, signed by Shmuel Reidel, a director at Gates of Mercy. Reidel’s 2012 signing is an important data marker; while Gates of Mercy continued to move millions of dollars CDN in charitable donations per year offshore, the charity’s financial activity and total number of donors experienced a marked decrease, post-2011. Most donors – and their charitable donations – moved en masse to another Reidel-directed charitable organization, ‘The Beth Oloth Charitable Organization’.
Incorporated in 1980, CRA records show Beth Oloth largely inactive until 2012, just as Gates of Mercy entered into a compliance agreement with the CRA. Beth Oloth then experienced a massive uptick in reported revenue; the charitable organization took in over $9.4 million in revenue for the year. Revenue would skyrocket in the ensuing years: Between 2013-2014, Beth Oloth reported over $62 million CDN in received donations.
The CRA responded in 2016 with an audit of Beth Oloth’s 2011–2014 activities. As with Gates of Mercy, Beth Oloth was found to be non-compliant with the Income Tax Act on a variety of levels. The CRA also evinced concern that Beth Oloth was depositing cheques made out to Reidel and Gates of Mercy. Representatives from Beth Oloth would claim that Reidel no longer held a formal association with the charity and maintained an “advisory role” only. But the cross-writing of cheques between the two charities suggested to the CRA the existence of an undisclosed relationship or arrangement between the two organizations.
As for its charitable activities, between 2012-2014 Beth Oloth claimed that it had moved over $63 million CDN to a stable of thousands of international intermediaries, the vast majority of which were in Israel. While the CRA identified multiple instances where Beth Oloth’s self-claimed Israeli intermediaries were actively involved in supplying financial support to the illegal settlements and the IDF, the general conclusion was that the sheer scope of Beth Oloth’s operations were impossible to direct or control. The CRA revoked both Gates of Mercy’s and Beth Oloth’s charitable status in 2019.[1]