Noraid fund-raisers elude compliance with US laws

The Irish Northern Aid Committee has been singularly successful over the years in keeping details of its fund-raising operations as secret as possible. This report takes a close look at Noraid. The New York-based group considered to be a prime American fund-raising arm of the IRA has failed to comply with a series of state and federal disclosure laws since it began raising money in the United States in the early 1970s, according to federal and state officials and public documents.

According to federal officials, the Irish Northern Aid Committee (Noraid) -- which US Department of Justice officials consider an agent of the outlawed Provisional Irish Republican Army -- has failed since 1971 to satisfy federal disclosure requirements as outlined under the Foreign Agents Registration Act of 1938 (FARA).

The group has yet to comply with a 1981 federal court order requiring a detailed accounting under FARA of its finances, operations, and its pro-IRA propaganda efforts aimed at influencing US public opinion.

A Monitor investigation of Noraid has also revealed that the organization:

Is not registered as a charity in New York State and in at least five other states where it has highly active fund-raising chapters -- Massachusetts, California, Pennsylvania, New Jersey, and Connecticut. Such registration is required by law in each of these states. A Noraid chapter in Illinois has registered as a charity.

Is not a recognized tax-exempt organization, yet has not filed any form of tax information with the US Internal Revenue Service, as required by law.

Does not conduct an annual audit of its books, as is standard practice with most recognized US charities.

Declines to open its books to members of the public and press, although it says its sole purpose is to raise relief funds for Ireland-based charities.

``Here you seem to have a fairly visible organization that just seems to exist outside the law,'' says a US government source familiar with the fund-raising group.

Noraid has some 125 chapters nationwide and has reported sending between $120,000 and $300,000 to Ireland each year. The collections are conducted by placing glass jars and passing collection plates in neighborhood pubs across the US, through dinner-dance benefits, by selling advertising in benefit publications, and through direct-mail solicitation.

Michael Flannery, Noraid's 82-year-old founder and director, charges that the US government is waging a campaign of harassment, including the use of wiretaps and surveillance, designed to put the group out of business. He vows it will not happen. And he stresses that, asAmerican citizens, Noraid members have a constitutional right to be able to speak out and raise funds to affect issues and causes that concern them.

Noraid officials have been outspoken supporters of the Provisional IRA's use of assassinations and bombings as a means of trying to end British rule in Northern Ireland.

But they say the funds they raise do not go toward the purchase of bullets and bombs. Rather, they say, Noraid funds are earmarked exclusively for charitable relief programs that help the families of imprisoned IRA members. The funds are distributed through groups like An Cumman Cabhrach in Dublin and Green Cross in Belfast, they explain.

It is clear from public records and interviews with government officials and Noraid officers that Noraid would prefer not to make public any of the details of its inner workings or finances. What is not clear is why an organization claiming to do exclusively charitable fund-raising work should be so secretive about its operations.

Security officials in Northern Ireland, Britain, and the US have long suspected that part of the reason for Noraid's reluctance to make full, public disclosures is that some of the group's funds may be diverted for other than charitable relief work. They say Noraid may also be bankrolling part of the IRA's supplies of guns and explosives.

Why doesn't Noraid simply keep detailed books, permit an independent annual audit, and publish the results? Wouldn't that silence once and for all charges and speculation that Noraid funds were being diverted to gunrunners?

``It's not as easy as that to do,'' says the lanky, ruddy-cheeked Flannery in an interview at Noraid headquarters in the Inwood section of Manhattan. ``What would we audit?''

Asked if an audit might just show what comes in and what goes out, Flannery snaps back: ``We can say what we like in it.''

He adds: ``We figure that the Justice Department is good enough. They don't leave any stone unturned.

``Whoever does the audit down there has every penny we collect and goes through to see that it's right,'' Flannery says. ``I think anyone would accept that.''

There is no Justice Department audit of Noraid's books, according to Justice officials. Nor are they able, government officials say, to confirm, with the sparse information Noraid discloses, the accuracy of Noraid's financial reports. One source says Justice Department officials take the reports they receive from Noraid ``at face value.''

``There are penalties for making misstatements, but basically it's an honor system,'' says an official with the Justice Department's Internal Security Section, which oversees the registration of foreign agents in the US.

Donald J. McGorty, who heads the international terrorism section of the Federal Bureau of Investigation office in New York, has his own theory on why there are no independent audits at Noraid: ``It would pinpoint exactly how much money they are actually collecting, and maybe they don't want that known.''

The most recent financial reports made public by Noraid were submitted to the Justice Department last August and September. These public documents raise serious questions about the veracity of Noraid's record-keeping.

Noraid filed two financial reports covering the first half of 1984. The first report said that $43,000 had been sent in early 1984 by Noraid to An Cumman Cabhrach in Dublin.

Shortly after the first report was received at Justice, Noraid attorney Henry Furst of Newark cabled a message to Justice officials. It said in part that the recently submitted financial statement ``was inaccurate.'' It added: ``Please do not disseminate it or consider it. An accurate statement shall be forthcoming shortly.''

In September, the second, ``corrected,'' report was submitted. It said that $93,000 had been sent to An Cumman Cabhrach.

Why the $50,000 discrepancy?

It was not explained in the wire by Mr. Furst or by Noraid.

Contacted by telephone, Furst declined to answer questions about Noraid and its finances. ``I don't talk to reporters,'' he said.

Martin Galvin, Noraid's publicity director, said in a telephone interview that the person who normally handles Noraid's books was on vacation in Ireland at the time the first report was sent to the Justice Department.

``There were a number of places in our books in which monies were sent to Ireland which were not reflected in the first statement.'' said Galvin. ``We reviewed it -- the person who normally does it reviewed it -- and found that there were entries that were not included on the form.''

He stressed: ``It was not an intentional error. There was no attempt to deceive anyone.''

But there was another discrepancy between the first report and the second report -- this one a $60,596.32 discrepancy in the amount of money Noraid said it had raised in the first half of 1984.

In the first report Noraid said its total fund-raising receipts were $60,588. But in the second, ``corrected,'' report, Noraid said its total receipts were $121,184.32.

Where did the extra $60,596.32 come from?

``I'm not sure exactly where the mistakes were made; I don't deal with the financial books extensively myself,'' Galvin said.

A government source familiar with Noraid, who asked not to be named, said it appeared that a Noraid record-keeper might have discovered that the group had sent $50,000 more to Ireland than stated in the first report. The source said it appeared the Noraid record-keeper, in seeking to correct the discrepancy, simply boosted the receipts figures in the second, ``corrected,'' financial report to cover the discrepancy.

An examination of the two reports shows that the extra $60,596.32 came about as a result of boosting the figures in the group's fund-raising receipts columns by exactly $10,000 in five of the six months in question. In the other month, May, the month's fund-raising receipts were boosted by $10,596.32.

Where was the extra money raised? Who made the donations? There is no documentation in the public file, as is required by law.

How did it happen that fund-raising accounts, made up mostly of small donations, were mistakenly underreported by exactly $10,000 in five out of six months?

Because Noraid uses a variety of means to transfer its funds to Ireland -- including couriers -- it is extremely difficult, if not impossible, for US or Irish law-enforcement officials to verify that $93,000 was, in fact, received in Ireland or was, in fact, ever sent to Ireland in 1984.

``Their books consist of a torn envelope, a piece of paper here, the back of a newspaper there,'' says the FBI's McGorty. ``It's not your regular double-entry bookkeeping, a set of books you would expect if you went to the Ford Foundation or some charitable organization.

``The situation is very difficult because you don't know if they collect $1 or $1 million. If you are doing business by cash, it is very difficult to keep track of.''