LEGAL QUESTIONS
What is the current situation of the Child Foundation and what caused it?
As you may be aware, in July 2008 US Federal Agents seized computers, cell phones, fax machines and documents from the main office of the Child Foundation in Portland, Oregon. No explanation was provided for the government’s actions. Within a month, equipment and documents were returned to the Child Foundation with no instruction to alter or discontinue our operations.
Two and half years after the raid, the government advised us that it intends to bring the following charges against the Child Foundation: Accusation of violations of sanctions laws against Iran for the transfer of funds and accusation of violations of IRS granted non-profit tax exemption status by allowing specific donors oversight and authority over expenditure of their donations
What do these charges mean?
The Child Foundation dispute with the US government is related to alleged acts performed by the Child Foundation several years ago. The charges are based solely on alleged violations of US sanctions against Iran and provisions of the US treasury tax codes which set unprecedented difficulties for any organization or individual in America providing humanitarian aid to people living in politically unpopular nations.
Is Child Foundation permitted to continue its operations?
At no time has Child Foundation ceased operations nor have we been given a directive from any U.S. government agency or a court order to stop providing services.
Has any member of Child Foundation Board of Directors or Staff been charged or found guilty of money laundering or found guilty?
No, none of Child Foundation’s present Board of Directors and staff has been charged for money laundering or any other crime. Our lawyers’ discussions with the prosecutors confirm that no charges against board members or staff are contemplated.
What is your relation to Mr. Lahiji and Mrs. Vahid?
Dr. Lahiji and Mrs. Vahid have donated generously to Child Foundation in the past and sponsored a number of children. Presently they are not among our sponsors.
Why is the Iran-based Mr. Iranshahi referred to as a fugitive in the media and in legal papers?
Mr. Iranshahi has never travelled or lived in the United States. The use of word “fugitive” in the US Attorney’s indictment means “he is not reachable.” It does not mean that Mr. Iranshahi is an escapee or is in hiding. According to a statement released by Mr. Iranshahi through the media, the U.S. Attorney’s office has never reached out to or contacted him. Mr. Iranshahi only became aware of his indictment through the news media.
What is the Child Foundations response to the charges against your previous donors and current partners in Iran?
Due to ongoing legal proceedings against these individuals, the Child Foundation does not have any comment about the charges others are facing. Questions about their activities should be posed to their legal teams.
If Child Foundation is not pleading guilty to money laundering or misuse of public donations, what are the charges?
The charges against the Child Foundation relate to the following items, and took place several years ago:
* Accusation of violations of sanctions laws against Iran for the transfer of funds: Five years ago, there were no explicit terms in the sanction law prohibiting humanitarian organizations from sending money to Iran to alleviate human suffering. At that time, the Child Foundation’s interpretation of the law was that sending money to Iran was within the boundaries of the sanction laws. Though sending money to Iran by a humanitarian organization is not prohibited, the US Government has asserted that Child Foundation should have contacted the Treasury Department’s Office of Foreign Asset Control and first obtained a license for sending money to Iran for Humanitarian causes. The charges against Child Foundation are focused on the means by which the funds were transferred, an area as to which there has been considerable lack of clarity in the past.
* Accusation of violations of IRS granted non-profit tax exemption status by allowing specific donors have oversight and authority over expenditure of their donations: In this case Child Foundation tried to accommodate wishes of specific donors who donated large sums of money for humanitarian purpose to be involved and have direct knowledge of how their money is being expended for humanitarian purposes. Our intention was to remain loyal to our donor wishes and felt that this responsible act was within the boundaries of the law. We now understand that this was not the case.
After arduous deliberation and consultation with our attorneys we had no choice but to accept a settlement.
How can we independently verify the charges against Child Foundation?
The charges against Child Foundations will become public record once they are formally filed and will be available on the Internet. Child Foundation has been actively and voluntarily cooperating with US Federal authorities and is required as part of its agreement to provide the donors and sponsors accurate and true information. Throughout this investigation of Child Foundation Operations we have never been accused of public misinformation. We intend to keep ourselves transparent and truthful.
What will the Child Foundation do in response to government allegations?
Despite our objections to the accusations against us by the US Government, we have had to make some very difficult decisions as an organization. We were faced with the following two options:
Continue to contest the accusations against us in court. This would entail retaining lawyers to defend the foundation in legal battles that would likely last several years, and could cost in excess of a million dollars. Taking this course of action would have imperiled our ability to continue our work and deprived the children we aim to serve of vital assistance.
Accept a settlement with the US government. By agreeing to plead guilty to some of the alleged sanctions and tax code violations, the Child Foundation would avoid lengthy legal battles by paying a monetary fine and agreeing to an increased monitoring during a probationary period. Agreeing to this settlement offer would close the government’s case against the Child Foundation, and the organization would be able to continue the sponsorship program.
What has the Child Foundation decided is in the best interest of the organization and the children?
After arduous deliberation and consultation with our attorneys we are faced with the fact that in order to honor the nearly 3,000 children we currently serve in Iran who rely on us for food each month, and to maintain the standard of service expected of us by our donors, we have no choice but to accept a settlement.
FINANCIAL QUESTIONS
What happened to the money we have donated?
The Child Foundation has delivered your donated money to needy children as intended less administrative costs. In this endeavor, we have had the courage of standing up to major difficulties and passing through challenging regulations, while consistently and securely delivering your well-intentioned donations to the appropriate recipients: the children.
We need to know where our money is invested.
Your money is not invested. Your money is used to purchase food items. Food items are then delivered to our sister organization in Iran: Bonyad Refah Koodak (BRK) for final delivery to sponsored children.
How can Child Foundation continue to send funds to Iran in lieu of US Government sanctions?
CF sends collected donations in form of food items, which is, permitted under an exemption to the US sanction regulations.
News reports imply a link between Child Foundation and Hezbollah. Is there any truth to this?
This is absolutely not true and we strongly reject this misinformation. Child Foundation has never worked with or been associated with any political or military group in any Country. For the past several years there has been an ongoing investigation by US Government on all aspect of Child Foundation’s Operation. We have reached a plea agreement with the government and that does not include any charges regarding funding of Hezbollah or any religious or military group.
Child Foundation is referred to in news reports as transferring millions of dollars illegally to Iran. Please clarify your position and legal status with the United States Government regarding new sanctions imposed against Iran?
Through 16 years of operation millions of dollars have been donated to Child Foundation to be used in Iran for humanitarian purposes through children sponsorship programs. Child Foundation has transferred the donated money to Iran for its intended humanitarian purposes in the form of food for the past five years and in form of direct fund transfer prior to 5 years ago. The fund transfer activities of 5 years ago and prior have been subject of an ongoing investigation between Child Foundation and the US Government for which we have reached a plea agreement.
Regarding new sanctions on Iran, we believe our present services of sending bulk food to Iran to relieve human suffering meets the exemption provisions of the existing sanction rules against Iran. Due to past confusions in our methods of compliance to the sanction rules we intend to disclose details of our food transfer to Iran and distributions to children to the Treasury Department’s Office of Foreign Asset Control and obtain their concurrence/guidance. We also intend to apply for expanded license for continued operations in Iran meeting any new regulations that they may have.
The Associated Press reported that Mr. Mehrdad has funneled millions of dollars out of the United States. Who is Mr. Yasrebi and why did he deposit this money to his personal account?
Dr. Yasrebi is a research engineer residing in Oregon. He was the founder of Child Foundation USA in 1994. The acts of Dr. Yasrebi mentioned in his indictment relate to the years that he had been serving as President of Child Foundation. Because of his position, the Child Foundation is legally liable for his activities on its behalf.
Sending money outside of the US is in reference to sending donations gathered in US to Iran supporting Child Foundation’s sponsorship program. This money has never been deposited in the personal account of Mr. Yasrebi. Mr. Yasrebi has dedicated many years of selfless service to Child Foundation with no monetary compensation.
IRAN RELATED QUESTIONS
Does Child Foundation have any connection with Iranian government?
Child Foundation is non-profit, non-political and non-governmental entity with no connections to any governments including that of Iran.
Why did Child Foundation deposit collected donations to Bank Melli, which is considered sanctioned by the US government?
Given the current sanctions laws against Iran, the Child Foundation has not sent cash to Iran in over five years. The US government did not add Bank Melli to its list of sanctioned banks until December 3rd, 2008.
Who is the Iran based organization, Refahe Koodak (BRK)? Does Refah Koodak work independently of Child Foundation? How?
Bonyad Refah Koodak (BRK) is an Iranian registered charity organization with its own fundraising program in Iran. Widely known and respected by the Iranian public as a non-religious, non-government private entity; BRK solicits and receives donated funds from organizations and individuals around the world. BRK is also known as Child Foundation-Iran but has no legal affiliation with Child Foundation-USA. BRK has built an extensive social workers network, comprising of volunteers, who identify the needy children in Iran eligible for aid. CF-USA uses BRK as a sister organization to deliver food items to the needy children.
BRK compliments CF-USA food donation with other necessities such as money, medicine, school supplies and other variety of food items to each children ensuring a balanced support is provided to sponsored children. Cost of supporting each child would require more than one sponsor and therefore CF-USA provided food items provides only a portion of the aid for each child.
Who is Mr. Ahmad Iranshahi and what is his relation with Child Foundation?
Mr. Iranshahi is Director of Bonyad Refah Koodak (BRK) also known as Child Foundation Iran, which is a non-profit non-government charity organization registered in Iran.
Because of the economic sanctions against Iran, Child Foundation USA (CF-USA) is not permitted to have an office in Iran and provide direct humanitarian activities. Therefore, CF-USA has been closely working with BRK to deliver sponsors donation in the form of food items to sponsored needy children. The CF-USA relationship with BRK includes:
Locating and creating files for children in need and introducing them to CF-USA in US for sponsorship.
BRK distributes CF-USA provided food items to sponsored children in Iran.
BRK is mandated to provide CF-USA a bi-annual report of the children’s status to be presented to US sponsors by CF-USA
BRK has been Providing CF-USA annual audited financial statements showing that donated food has been received by BRK and delivered to sponsored children as intended.
How does Child Foundation work with Iran based clergy?
Child Foundation is a non-sectarian organization that welcomes donations from people of different religions backgrounds and belief’s from all over the world. However, given our non-religious and non-political mandate, Child Foundation has never assisted any of these groups. We strongly reject any suggestion that we work with Iranian clergy in or outside Iran. Our only purpose is to ensure we send donor funds to the children they are intended for, there are no financial transactions outside of this purpose.
Confusion in media reports stems from clergymen who instruct their congregations to allocate a portion of their religious dues (zakkat) to their trusted clergies so that the clergies disseminate part of the donated funds to orphaned children. Individuals like Mr. Makarem Shirazi has instructed his followers to send 50% of their religious dues to trusted charity organizations that work with orphans. Child Foundation is widely accepted as a legitimate and trusted charity organization. Therefore some of our donors have been instructed by their trusted clergies to pay portion of their religious due to Child Foundation.
DONATION QUESTIONS
How is the Child Foundation sending sponsors’ donations to Iran?
Existing sponsor donations are being delivered to Iran in bulk food commodities, in accordance with the US Treasury Department’s existing exemption from the sanction rules against Iran.
Does CF have the proper permits to send food to Iran?
According to the sanction rules food and medicine are exempt from obtaining license. In close coordination with attorney’s specializing in US sanctions laws, CF is using the exemption clause to send bulk food items to Iran and believe that no license is required.
Will donors be affected or face legal problems by making donations to Child Foundation?
No, donating to Child Foundation is legal and all of your donations are fully tax-deductible.
How can we be sure that our current methods of sending relief to Iran are not in violation of sanctions?
We believe our present services of sending bulk food to Iran to relieve human suffering meets the exemption provisions of the existing sanction rules against Iran. Due to past confusions in our methods of compliance to the sanction rules and difference of our interpretation of the rules with the US government we intend to disclose details of our food transfer to Iran and its distribution to the needy children to the Treasury Department, Office of Foreign Asset Control. We intend to obtain their concurrence and guidance regarding our present business practice and apply for expanded license to have independent control on distribution of food in Iran. As part of our plea agreement with the US government there will be a probationary period that CF must show full and accurate compliance to the rules and regulations. Therefore, we intend to be more cautious and develop a close line of communication with the Treasury Department’s Office of Foreign Asset Control ensuring details of our operations meets the expectation of the sanction laws.
Why do you solicit medical or Back to School supplies if we are unable to send it? And where does the payment made for that go?
Often time’s children have multiple-sponsors from different countries. Medicine, school supplies and cash are provided to sponsored children through funds raised in Iran or donated from countries other than USA.
For back to school and other events we allocate a specific amount of food equal to our sponsor’s donations. BRK, our sister organization in Iran; delivers the allocated food subsidy to our sponsored children as directed by us.
Many of the sponsors are asking for their children’s direct phone and address. Can you provide them please?
Hundreds of sponsors have visited their sponsored children in Iran. We have their testimonials on record. It would be our pleasure to provide our Sponsors contact number and address of their sponsored children so the sponsors and their relatives in Iran make contact and visit their children
How has the investigation affected Child Foundation humanitarian programs in Afghanistan and Indonesia?
Child Foundation’s sponsorship and humanitarian programs in Indonesia and Afghanistan has not been the subject of any of the US government’s allegations and has not been affected.
What changes have been made at the Child Foundation to prevent future problems?
In the past five years, we have welcomed three new board members to the Board of Directors and intend to add more.
Child Foundation’s Executive Officers and staff regularly confer with the organization’s paid and pro-bono attorneys to ensure that the Child Foundation’s compliance with all applicable laws and regulations is properly documented.
Recently, the Child Foundation began a special operational audit of its food delivery program in Iran. This has provided an in-depth view of details of food delivery, business accounting, and organizational management process and procedures and sponsorship programs in Iran.
HOW TO HELP
How can we offer our continued support?
Now that our long and arduous legal wrangling with the US government is over, we need you more than before. Though the settlement allows us to continue our operation, we have many challenges ahead of us. As ever, our first priority is to continue to provide life-saving assistance to nearly 3000 children in Iran and beyond. In addition, we must continue to fulfill our duty to donors who rely on and trust the Child Foundation to ensure donor dollars reach the children.
The following is a list of challenges that our organization will be facing. Now more than ever, we rely on your moral, social, political, and financial support:
The sanction laws against Iran include very limited exemptions in humanitarian efforts. Organizations like the Child Foundation are forced to apply and obtain specific licenses for humanitarian activities. Contact your Congressperson or Senator to express your support of easing the sanctions against Iran to allow an exception for direct humanitarian work.
Due to the Child Foundation’s recent settlement, the Office of Foreign Asset Control of the US Treasury Department may not look positively on granting CF future licenses to continue and expand its humanitarian work in Iran. Your support in contacting the Treasury Department and your elected officials in support of your organization will be duly appreciated.
Your continued support of sponsoring children in Iran and any additional financial support for our humanitarian projects are needed more than before. Specifically, we could use additional financial support in fulfilling our legal obligations and to pay the future assigned fine.
We desperately need volunteers in different US cities to manage fund-raising activities by arranging specific programs attractive to donors.
