Paul Watson and the Sea Shepherd Society:
A Financial Expose
By Myles Higgins
Friday, October 7, 2005
It appears that one of my recent articles on seal hunt protest groups sparked a strongly worded response / rebuttal from Mr. Paul Watson, President of the Sea Shepherd Conservation Society.
In his comments Mr. Watson took it upon himself to question my research and belittle both my intelligence and character. In fairness to Mr. Watson, I must admit that referencing the SPCA in that article was indeed a mistake on my part. I had intended to refer to the Human Society of the U.S., but rather than HSUS I referenced the SPCA. For that, I sincerely apologize.
With regard to Mr. Watson’s other comments, I stand by the piece.
Since I have written several articles on sealing in the past, without comment from Watson, I can only assume that broaching the subject of finances is what spurred his venomous and childlike response.
Watson stated that the Society’s financial dealings are a matter of public record and available for anyone who wants t o view them. As we all know financial records are what you make of them and can sometimes create more questions than they answer.
With this in mind, the following information has been gathered by myself and other interested parties including members of an U.S. based lobby group. All information, as Watson has stated, is a matter of public record. Various sources have been used including IRS returns.
This list is by no means all-inclusive.
The Public Record:
1 - In 2000 Sea Shepherd reported income of $129,749 from consulting fees however there was no indication what sort of consulting this was, or for whom it was performed. Coincidentally, in the tax year immediately following, Paul Watson, who has long prided himself in not taking any salary from the society, began doing just that.
2 - In 2002 the Sea Shepherd Society passed out $35,000 in grants. Despite IRS requirements to do so, the Society did not divulge the recipients of those grants.
3 - In 2003 Sea Shepherd made a grant of $8,000 to OrcaForce International, a group supposedly started by Watson’s ex-wife. Even though the Sea Shepherd Society’s tax return shows this $8,000 amount as a contribution, at the time, the OrcaForce address was listed on the society’s web site as a Sea Shepherd International address.
Over the years several instances have been identified where assets have been moved between Sea Shepherd and OrcaForce and although OrcaForce appears to have a Canadian address, investigation did not uncover any registration or structural information on this group in either the U.S. or Canada.
4 - The liabilities of the Sea Shepherd Society jumped from $2,122, which was about normal for this group, to $222,889 in 1999. Most of this amount was related to a Mortgage at Washington Federal Savings and Loan however as far as could be determined, no details of what this loan is related to is available.
5 — Although the Sea Shepherd Society does not have a large number of donors those who contribute do so in a very big way and many of these gifts are one time donations. This would appear to be a little out of the ordinary for an organization of this type since most non-profits rely on large numbers of smaller gifts to operate.
Often, rather than hard cash, gifts to Sea Shepherd take the form of stock in major corporations. Contributions to the society have been made in everything from Harley Davidson stock ($122,000 from guitarist Mike Galesi) to Exxon-Mobile stock valued at nearly 100,000 gifted by a Ms. Whilhelmina Angel of Florida.
The donation of Exxon-Mobile stock may have been purely legitimate, however it appears to be an odd gift for Mr. Watson to accept when one considers his comments at a speaking engagement just last month.
"I won't give one penny for Katrina relief. Ill give for the animals but not for relief efforts until the oil companies pony up millions for the destruction caused by global warming."
Although many of the Society’s contributors are from the U.S, there have been some Canadian donors as well, including one whom made her donation by way of Wappel Law in Toronto. This law firm works with non-profit organizations and boasts Tom Wappel the Liberal Party member for Scarborough Southwest, who recently voted in Parliament on a bill related to non-profit organizations, as a Senior Partner.
6 — The following is a rather lengthy and complex set of circumstances. Most of the items listed below might not appear interesting on their own, however when viewed together they are rather disconcerting.
- One of Sea Shepherd’s biggest financial supporters is Ms. Ann Johnston, wife of Florida land developer Mr. Pritam Singh (not his original name). Mr. Singh, (original name Paul LaBombard) was banned from banking for life in 1995 and ordered to pay $1.2 million dollars by federal bank regulators for his financing activities on a Key West business. According to the Key News Journal, Singh has also been investigated by the FBI for his questionable business practices and a Key West attorney has filed a lawsuit against him, alleging almost 20 years of criminal activity -- including racketeering and fraud.
- Both Singh and his wife are very closely connected with both the Sea Shepherd Society and the Watson family.
- The relationship between Johnston, Singh and Watson goes back a number of years. In September of 2003 Ms. Johnston’s signature appears, along with Watson’s and his wife’s, on a loan for property listed at the same address in Washington State as the Society’s headquarters. A Deed of Trust was filed in September of that year stating that a property in "Friday Harbor" Washington was used to secure this loan valued at about $221,000.
According to a recent St. John’s Telegram article, the same day this transaction took place, in fact just 5 hours afterward, Ms. Johnston gave a 66% interest in the land to the Watson’s for $10 dollars. This gift was not to the Society itself, but rather to the Watson’s directly. Also at that time, Johnston granted the Watsons another option on property. The Watson’s secured additional mortgages of $50,000 and $30,000 on April 15, 2004. Within two months all debts were paid off in full.
IRS returns for the Society in that year reported that Sea Shepherd had sold a property listed as "Friday Harbor land and buildings" for $165,938, reporting a loss on the transaction of $184,862. Is this the same property that was used just a couple of months before to secure a $221,000 loan?
Although a search of San Juan County records did not reveal the "Friday Harbor" transaction having taken place, they do show a flurry of transactions involving both Paul Watson and Ann Johnston.
- In addition to her involvement in a property loan, Ms. Johnston cemented herself as a premier contributor by making a donation to the Society claimed to have been valued at nearly 2.7 million dollars. This gift consisted of a company called "Northern Development Associates", a for-profit business with holdings in Alaska.
- Both Johnston and her husband Singh have not only shown great financial generosity to the Sea Shepherd Society, Mr. Singh has also been listed as a member of the financial and management advisory board for the Society, despite his less than spotless financial history.
- When Paul Watson was elected as director of the Sierra club in 2003 he listed his home as "Misty Fjords Lodge", even though he has admitted that he never actually lived there. This lodge, which was a part of the 2.7 million dollar "Northern Development Associates" gift, has been identified by Watson as a research facility however the lodge is registered with the US forestry service as having a permit as a fishing lodge. It appears to qualify as the only licensed fishing lodge inside Misty Fjords National Monument in Alaska.
- A corporate search shows two relevant entities named "Northern Development Associates". One of these is in Alaska (where the lodge is located), the other is in Florida (where Ann Johnston and her husband, developer Pritam Singh, live). Records show major overlap between both the names and addresses of many board members of the Sea Shepherd society, "Northern Development Associates" and various companies owned by Singh / Johnston.
For example, records show that in 1999 Watson’s ex-wife Lisa Distefano, who has been connected with the mysterious OrcaForce organization, was a board member of "Northern Development Associates". At the time her address of record was listed as that of Mr. Singh’s golf course development in Key West. In addition to Ms. Distefano, several other members of the Sea Shepherd Society board have shown multiple addresses and many of these can be traced directly back to Singh properties.
- IRS documents also show that the non-profit, donation run, Sea Shepherd society made a series of loans to its wholly-owned affiliate, the for-profit "Northern Development Associates", between 1998 and 2003.
- Tax returns for "Northern Development Associates" show losses of $222,611 in 2000, $201,180 in 2001 and $127,633 in 2002. All the while, "Northern Development Associates" was receiving loans from the tax exempt Sea Shepherd Society to the tune of nearly $900,000.
- In 2002, for the first time in history, Sea Shepherd's tax return showed the Society had incorporated the losses of "Northern Developments Associates" into its own bottom line even though it was gifted to the Society years before.
- On November 8, 2004, the Misty Fjords Lodge (the primary asset of "Northern Development Associates"), was sold to a newly-formed company, Misty Fjords, LLC, located at 6805 Overseas Highway, Marathon, Florida. Online records at the Florida Department of State’s Corporations Division name the President/Director of Misty Fjords, LLC as none other than Pritam Singh, the husband of the original donor Ms. Johnston.
At the time of sale the property was identified by the realtor as being listed for $1 million dollars under the appraised value.
- In April of 1999 the Sea Shepherd Society received a donation of a "Key West Home and Land" in Florida which the Society claimed was valued at $329,500. They re-sold this property less than 2 months later for $850,000 yet claimed an overall loss on the transaction of more than $265,000 due to related costs.
According to sources, a search of Monroe County, Florida (Marathon, Key West) records show that Sea Shepherd sold a "Single Family Home" at 5 Crane Blvd., Sugarloaf Key, FL for $850,000 on June 2, 1999. A mapquest and 1999 satellite photo search find no structures at this location.
Sea Shepherd reported $64,070 in expenses for maintenance at the Key West property as "Program Service Expenses," indicating the money was spent to further the organization’s tax-exempt purpose.
It is not known if Singh or Johnston were involved in this transaction since the name of the donor was not found in available documents however this information may be contained in Statement 1 of Sea Shepherd’s Form 990 tax return for fiscal 1998 submitted to the IRS.
What does it all mean?
Consider that this organization enjoys tax exempt status but appears to be involved very closely with questionable business interests. The Society and its leader have been involved in everything from intentionally sinking ships to booby trapping trees which loggers must try to harvest (the practice of which is suspected of seriously injuring at least one mill worker) and they've been involved in generally disrupting legal business enterprises.
Sea Shepherd claims to have multiple vessels in ports around the world yet there is some question as to exactly how many vessels they really own and operate at any given time.
Consider as well that this organization is run by a man who, even while the world grieved over 9/11, stated, "There's nothing wrong with being a terrorist, as long as you win." In fact, just recently with regard to people who do not accept his view of nature conservation, Watson said, "If [you] shot and killed a bank robber, you would be given a medal"
Again, what does all of this mean?
Perhaps it means nothing or perhaps it means everything.
It is difficult to understand how a group, which employs terrorist tactics can be given tax-free status by the U.S. government. Having said this, since Sea Shepherd is indeed considered a non-profit organization, it should not bother Watson to respond to what has the appearance of questionable financial activities and business relationships.
An explanation might prove worthwhile if for nothing else than to ease the minds of anyone who may have donated money to his organization.
Do these facts show illegal or even immoral activities? That question would be best answered by U.S. federal officials / authorities, but these items don’t reflect well on the organization and it would perhaps be in Mr. Watson’s best interest to clear them up for the public record.
According to sources, much of this information and more has already been presented to the IRS but due to a lack of resources and the perceived low priority of the case, a thorough investigation has yet to take place. After all, Mr. Watson does not practice is brand of what some refer to as "eco-terrorism" in that country as often as he does in others.
Some citizens of the U.S. and Canada have contributed to this group. These people, along with the governments of both nations and in particular the government of Newfoundland and Labrador, which has long been the target of the Society’s activities, should be more than interested in getting answers and in requesting that the IRS investigate these matters fully.
I'm sure the public would love to hear Mr. Watson’s explanation, however if he chooses not to respond that’s his decision. In reality his explanations should be given to IRS investigators.
Unlike Watson, I don’t underestimate anyone’s intelligence. I’m confident that our readers are more than smart enough to draw their own conclusions if he chooses not to officially clear these items up once and for all.
