Japanese Fail in Their Attempts to Remove Sea Shepherd’s Tax-Exempt Status in the United States

Commentary by Captain Paul Watson

Excerpt from IRS letter closing our auditExcerpt from IRS letter closing our auditBack in 2011, Wikileaks released some very interesting information concerning Sea Shepherd Conservation Society, the Japanese whalers, the U.S. Commissioner to the International Whaling Commission and the Internal Revenue Service (IRS).

According to the leaked report, Japanese and American officials discussed taking action to weaken Sea Shepherd, with Tokyo insisting that Sea Shepherd's confrontations on the high seas were costing them both politically and economically, and that Sea Shepherd had to be dealt with for the sake of international trade relations.

The U.S. representative to the International Whaling Commission, Monica Medina, discussed revoking the U.S.-based conservation group's tax-exempt status during a meeting with senior officials from the Fisheries Agency of Japan in November 2009, according to the documents released by WikiLeaks.

“Action against Sea Shepherd would be a "major element" in achieving success at international negotiations on the number of whales killed each year,” the cables cite the director general of Japan's fisheries agency, Katsuhiro Machida, as saying.

Referring to Sea Shepherd, it was reported in the cable that Medina said that she believed the USG (U.S. government) could demonstrate that “the group does not deserve tax-exempt status based on their aggressive and harmful actions.”

Japan had previously pressured foreign governments to take action against Sea Shepherd, such as revoking the registration of its ships. Although this pressure was successful in forcing the removal of Canadian, British, Cayman Island and Belizean flags, it failed with the removal of the Dutch and Australian flags.

Sea Shepherd had also been audited in 2007 for the second time before the exchanges detailed in the cables.

Sea Shepherd USA has had a 501(c)3 tax status since 1981.

The diplomatic cables, posted on the WikiLeaks secret-sharing website, dated Jan. 1, 2011 documented Japanese officials repeatedly telling U.S. counterparts the group's actions were making whaling a political issue and hurting any chance of a compromise on the numbers of whales killed each year. It was in the interest of the United States according to Japan, to shut down Sea Shepherd’s activities.

The cables were dated before the International Whaling Commission meeting in 2010. Sea Shepherd was described as an "irritant" in international relations between the United States and Japan.

"Action on the SSCS (Sea Shepherd Conservation Society) would be a major element for Japan in the success of the overall negotiations," a Japanese official said, according to one cable.

Sea Shepherd did not believe there was cause for concern because it is illegal under U.S. law for a foreign government to use the Internal Revenue Service to shut down a U.S.-registered charitable organization for political reasons.

Sea Shepherd was naïve. Not only did the IRS initiate a third audit of Sea Shepherd Conservation Society, the Japanese also petitioned the U.S. Courts for an injunction to prohibit Sea Shepherd USA from approaching within 500 yards of any whaling ship in the Southern Ocean.

The injunction was refused in February 2012 by Judge Richard Jones in Seattle based on his observation that Japanese whalers were in contempt of the Australian Federal Court and had “unclean hands.”  Thus preparations by Sea Shepherd continued to resume for interventions against illegal Japanese whaling activities for Operation Zero Tolerance for the 2012/2013 season.

After two of the Sea Shepherd ships had departed, the decision by Judge Jones was overturned and the injunction was granted to the Japanese whalers by the U.S. 9th Circuit Court on December 18, 2012.

Although well past the eleventh hour (two of the ships had already departed) Sea Shepherd USA had no choice but to abide by the injunction and immediately dropped out of the Southern Ocean campaign. I immediately resigned as campaign leader and stepped down as captain of the Steve Irwin.

The ships carried on with the campaign without Sea Shepherd USA and myself (although I was onboard without the means to depart, I took no part in the campaign other than as an observer). The three large ships were owned and flagged by the Netherlands and the Brigitte Bardot was owned and flagged by Australia.

There was nothing that Sea Shepherd USA could do to control the decisions made by the Australian campaign leaders and the ship’s captains.

Despite this, myself, and the directors of Sea Shepherd USA were charged with contempt of the injunction.

The case was heard in November 2013 and Commissioner Shaw delivered his report that in his opinion based on the evidence he heard, none of the defendants were guilty of contempt.

This decision was then returned to a three-judge panel of the 9th Circuit for deliberation and this court hearing took place last week on October 27th.

This panel has not yet rendered a decision on the case.

In the meantime, the audit against Sea Shepherd was underway and it was a difficult and costly affair, as audits usually are.

Because of the Wikileaks report, Sea Shepherd made a request to the IRS to name their source for the complaint that initiated the audit. They refused. Sea Shepherd filed a Freedom of Information Act request to discover the source. It was never revealed. Sea Shepherd then threatened to take the IRS to court to obtain a court order to release the name of the source.

On October 31st, Sea Shepherd USA received notice that the IRS audit was complete and there would be no penalty.

Sea Shepherd Conservation Society USA remains a 501(c)3 charitable organization.

At least the IRS ordeal is now over.

Sea Shepherd will never know for sure if the meeting between Monica Medina and the Japanese whalers was the motivation for the audit.

Sea Shepherd USA is happy to report that the organization has been cleared of any improper behavior by the IRS.

Sea Shepherd USA still awaits the verdict of the 9th Circuit Court on the matter of the injunction.

The Japanese whaling fleet will not be killing whales for the 2014/2015 season and they may not be killing whales for the 2015/2016 season. The intention of the whaling fleet is to return to the Southern Ocean for the 2016/2017 season.

The letter from the I.R.S. stated:

"Internal Revenue Service
Tax Exempt and Government Entities Division
1100 Commerce Street MS 4900 DAL
Dallas, TX  75242-1100

October 29, 2014

Dear Sea Shepherd Conservation Society:

Our examination of the information return(s) indicated above disclosed that your organization continues to qualify for exemption from Federal income tax. Accordingly, we accept the return(s) as filed."

-------------

The letter went on to explain that the complaints concerning Sea Shepherd activities have not been proven by any court of law or government authority to be illegal and that it is not within the authority of the IRS to characterize Sea Shepherd actions as illegal.

Sea Shepherd USA intends to continue non-violent and legal opposition to illegal activities exploiting life in the Ocean. Sea Shepherd works within the boundaries of the law and within the ethical boundaries of non-violence.

Sea Shepherd USA is satisfied with the decision by the IRS although disappointed that the source of the complaint was never revealed. This is understandable of course politically, because it would open up the possibility of revealing criminal behavior by a representative of the United States government.

Report from Wikileaks: January 6, 2011

WikiLeaks / Cablegate: Sea Shepherd, Not Greenpeace, A Threat To Japanese Whaling

JANUARY 6, 2011

At the peak of Sea Shepherd Conservation Society’s anti-whaling activities in 2008, Greenpeace made public their opposition to the tactics of Paul Watson’s group, which coincided with Greenpeace’s refusal to help the Sea Shepherd vessel stop the refueling of the Japanese whaler Nisshin Maru (Greenpeace later claimed to have driven off the same ship merely by their presence).

Greenpeace have long been antagonistic to the tactics of Sea Shepherd, something their statement makes clear:

Paul Watson has made many public requests for Greenpeace to reveal the location of the whaling fleet or otherwise cooperate with SSCS in the Southern Ocean when the ships of both organizations have been there simultaneously. We passionately want to stop whaling, and will do so peacefully. That’s why we won’t help Sea Shepherd. Greenpeace is committed to non-violence and we’ll never, ever, change that; not for anything. If we helped Sea Shepherd to find the whaling fleet we’d be responsible for anything they did having got that information, and history shows that they’ve used violence in the past, in the most dangerous seas on Earth. For us, non-violence is a non-negotiable, precious principle. Greenpeace will continue to act to defend the whales, but will never attack or endanger the whalers… In addition to being morally wrong, we believe the use of violence in protection of whales to be a tactical error. If there’s one way to harden Japanese public opinion and ensure whaling continues, it’s to use violent tactics against their fleet. It’s wrong because it puts human lives at risk, and it’s wrong because it makes the whalers stronger in Japan.

The last paragraph is key: if Greenpeace are correct then Sea Shepherd’s activities would not register in Japanese diplomatic circles – if anything it would be Greenpeace which would be seen as a threat. However, what is made very clear in the following cable (final paragraph) is that it is SSCS, not Greenpeace, that are considered a major obstacle to Japanese commercial whaling efforts. It seems that for all Greenpeace’s rhetoric, Paul Watson’s tactics are having the desired effect.

Note: Despite accusations by Greenpeace, Sea Shepherd has never undertaken violent activities and in the entire history of Sea Shepherd 1977 – 2014, not one single physical injury has been caused to any person nor has Sea Shepherd crew suffered any serious injuries or fatalities.

Part of the the leaked cable courtesy of Wikileaks.

Reference ID: 10TOKYO171 2010-01-27 08:08 Released: 2011-01-01 21:09 Classification: CONFIDENTIAL//NOFORN Origin: Embassy Tokyo

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C O N F I D E N T I A L SECTION 01 OF 02 TOKYO 000171

NOFORN SIPDIS

STATE FOR EAP/J AND OES/OA - LPHELPS STATE PASS CEQ USDOC FOR NOAA/NMFS - RWULFF BRIDGETOWN FOR ANTIGUA AND BARBUDA E.O. 12958: DECL: 01/26/2020 TAGS: EFIS KSCA PREL SENV IWC JA SUBJECT: WHALING: GOJ NONCOMMITAL ON ENCOURAGING ICELAND TO LOWER QUOTA

Classified By: EMIN Marc Wall, reasons 1.4 b and d

¶1. (C/NF) Summary: EMIN urged MOFA State Secretary Fukuyama and Fisheries Agency Deputy Director General Yamashita to press Iceland to lower its proposed quota for whaling in order to facilitate an overall agreement on whaling. Both Fukuyama and Yamashita said the GOJ is reluctant to take such action. Fukuyama cited a lack of desire to raise the profile of whaling to the political level, while Yamashita said Japan could not use trade measures to stop the importation of whale meat from Finland. EMIN made the case that the parties are close to an agreement and Japan should advise Iceland to come to the table with a reasonable offer. Yamashita the Sea Shepherd's harassment of the Japanese whaling fleet could limit domestic support for a compromise. End summary.

¶6. (C/NF) Turning to harassment of the Japanese whaling fleet by the Sea Shepherd Conservation Society (SSCS), Yamashita said the NGO's actions have kept the fleet from reaching its quota the last few years. Yamashita said the GOJ would come under pressure domestically if SSCS harassment continues to keep Japanese whalers from filling their quota after an agreement on reduced numbers is reached within the IWC. EMIN said the USG is concerned about the safety of life at sea and is looking at the activity of the SSCS.

Excerpt from the L.A. Times.  January 3rd 2011:

WikiLeaks releases documents about anti-whaling group Sea Shepherd

Japanese and American officials discussed taking action to weaken a prominent anti-whaling group, with Tokyo insisting that Sea Shepherd's confrontations on the high seas actually hurt efforts to reduce whaling, U.S. diplomatic cables show.

The U.S. representative to the International Whaling Commission, Monica Medina, discussed revoking the U.S.-based conservation group's tax-exempt status during a meeting with senior officials from the Fisheries Agency of Japan in November 2009, according to the documents released by WikiLeaks on Monday.

Sea Shepherd Conservation Society's yearly protest campaigns -- which chase Japan's whaling fleet in boats trying to disrupt the hunt by fouling fishing lines and throwing rancid butter at whalers -- have drawn high-profile donors and volunteers, and spawned the popular Animal Planet series "Whale Wars." In Japan, the harassment is seen by some as foreign interference in national affairs, making politicians wary of getting involved.

Action against Sea Shepherd would be a "major element" in achieving success at international negotiations on the number of whales killed each year, the cables cite the director general of Japan's fisheries agency, Katsuhiro Machida, as saying.

Referring to Sea Shepherd, Medina said "she believes the USG [U.S. government] can demonstrate the group does not deserve tax exempt status based on their aggressive and harmful actions," according to the cables.

Paul Watson, founder of Sea Shepherd, said Japan has previously pressured foreign governments to take action against the group, such as revoking the registration of its ships. He said the organization had last been audited about two years ago, which is before the exchanges detailed in the cables.

"We have had our tax status since 1981, and we have done nothing different since then to cause the IRS [Internal Revenue Service] to change that," he told the Associated Press by telephone from his ship.

The diplomatic cables, posted on WikiLeaks' secret-sharing website early Monday but dated New Year's Day, show Japanese officials repeatedly told U.S. counterparts that the group's actions were making whaling a political issue and hurting any chance of a compromise on the numbers of whales killed each year. ( end of L.A. Times story)

Linked story: Wall Street Journal.  January 3, 2011 WikiLeaks Japan: Whale Diplomacy

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