Questions swirl around circus organizers

2007-03-29

Matt Driscoll, Bracebridge Examiner

Despite a checkered legal past, the company working to bring the Shrine Circus to Bracebridge said last week that it is a “responsible corporate citizen.”

Xentel DM, which is currently fighting a proposed ban on animal circuses in Bracebridge, has previously faced legal action in several U.S. states and the province of Alberta. It has also been alleged that only a small portion of the money Xentel receives ever finds its way to the charities it represents.

The Examiner has learned that in December of last year, the government of Alberta launched an investigation into Xentel DM, which provides direct marketing for special events across North America. According to the Edmonton Journal, the government determined Xentel had committed six breaches of Alberta’s Fair Trading Act between December 2005 and March 13, 2006.

Xentel subsequently agreed to change its telemarketing practices and pay out $2,500 to cover the costs of the province’s investigation.

Earlier that year, Xentel came to a similar agreement with the State of South Carolina, after the secretary of state’s office alleged that telemarketers had failed to disclose they were paid solicitors and misrepresented how the donations would be spent.

The company agreed to pay $100,000, the largest fine in the history of the South Carolina Secretary of State at the time, and not to call citizens on behalf of the two charities they had been representing until 2009.

In August 2006, Colorado’s attorney general sued Xentel for allegedly violating the registration requirements of Colorado’s Charitable Solicitation Act.

In Missouri, Xentel was required to pay out $75,000 under a court order in May 2004. The state’s attorney general alleged that Xentel used manipulative and high-pressure tactics to solicit donations, and denied or interfered with requests to be put on a “do not call” list.

In November 2004, an Iowa district court entered a consent judgment and order against Xentel, after the state’s attorney general sued the company the previous year. According to the office of the attorney general, the company was employing abusive and misleading practices in its fundraising for the Iowa Professional Fire Fighters Association.

“Our lawsuit alleged that Xentel telemarketers claimed that they themselves were firefighters, that donations would benefit the donor’s own community, and that most or all of the funds raised would go to help firefighters,” said Attorney General Tom Miller, in a press release. “In reality, the callers were professional fundraisers calling from outside Iowa. Donations did not go to local departments, and about 76 per cent of donated dollars went to the telemarketers.”

The Office of the Secretary of State for Washington pegged that number even higher. Its commercial fundraiser profile report for the fiscal year ending December 2005 stated that of the $20,906,846 in contributions received by Xentel, about 14 per cent was returned to its charity clients.

Xentel representative Len Wolstenholme said their legal troubles can largely be attributed to the stringent controls placed on telemarketing at the state level.

“Regulations and requirements vary widely from state to state and involve compliance with the various laws,” he said.

Wolstenholme admitted the company had entered into agreements with several attorneys general, but he stressed “in each of these settlements there has been no finding or admission of wrongdoing.” He also noted that none of the matters had involved allegations of fraud or misuse of funds.

Wolstenholme’s said Xentel’s Canadian operations have been on the forefront of instituting “do not call” service, and providing information to customers on the charity they are representing.

“By the time they write that cheque, they’ve spoken to our agent, spoken to the verifier, received and read the event information, and had the opportunity to obtain more information if they feel it necessary,” he said. “Only then do they mail in the cheque . . . and if any consumer wants their purchase refunded before the event, they get a refund. Notwithstanding the few who claim otherwise, Xentel is a very consumer-conscious, responsible corporate citizen.”

As for the percentage of the profit the Shrine Club would receive from the Bracebridge circus, Wolstenholme said he didn’t know.

The Rameses Shrine, which is based in Toronto and oversees most of the Shrines in Ontario, including the Muskoka Branch, was equally ambiguous on where the money goes.

Robert McGregor, recorder for the Rameses Shrine, said he would not comment on what portion of the profit is given to Xentel.

“That’s a personal question,” he said. “That’s like me asking how much the newspaper makes in a year and how much (employees) get paid.”

McGregor did say the Bracebridge circus generated $5,000 last year, all of which went to the Shrine Hospital.

As for the local debate on allowing animal circuses, McGregor said the Shrine would respect the decision of the town.

“We stay out of political problems. If the town of Bracebridge doesn’t want a circus, then they aren’t going to have a circus. We respect the law of the land . . . but we have a job to do as well and we try to do it,” he said. “We don’t want to see animals being treated cruelly. If we ever saw it, we’d be on the circuses faster than you can shake a stick.”