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Justin Trudeau Faces Ethics Probe Over Government’s WE Charity Contract

The charity and feds pulled the plug Friday on a $900-million partnership amid backlash.

UPDATE - July 8, 2020: Prime Minister Justin Trudeau confirmed at press briefing that he did not recuse himself from discussions at cabinet and the decision surrounding the WE Charity contract. “No, I did not,” he told reporters.

“I had long worked on youth issues both before I got into politics and since I’ve been in politics as youth critic, getting young people involved in serving their country, recognizing their desire to build a better Canada, particularly through this time of crisis is something I believe in deeply.”

OTTAWA — The Prime Minister’s Office would not say Friday whether Justin Trudeau recused himself from a cabinet decision awarding a multimillion-dollar contract to a charity with close ties to his family — a question that is now at the heart of an investigation by Canada’s ethics watchdog.

Mario Dion, the conflict of interest and ethics commissioner, confirmed Friday he has accepted a complaint by Tory MP Michael Barrett and will look into concerns alleging Trudeau broke the Conflict of Interest Act when the government awarded WE Charity a sole-sourced contract that did not follow the normal contracting process.

The announcement came hours after Trudeau and the WE Charity announced they were ending their partnership.

Trudeau’s director of communications, Cameron Ahmad, declined to tell HuffPost Canada Friday whether the prime minister had recused himself from the decision and discussion at cabinet surrounding a $912-million program placing post-secondary students and recent graduates with paid volunteer opportunities.

“I’ll let you know if we can be more specific in our answers,” Ahmad said.

“We will of course collaborate with the commissioner and answer any question he may have,” he later offered. “[I] just can’t add anything further right now.”

If Trudeau did not recuse himself from the discussion surrounding the WE Charity contract, Duff Conacher, the co-founder of Democracy Watch, believes the prime minister is in breach of the law.

The act states that public office holders are in a conflict of interest when they exercise their official duties in a way that provides an opportunity to further their private interests or those of their relatives or friends.

Watch: Trudeau had said WE Charity was only organization capable of running COVID-19 volunteer program

“You’re also not allowed to give preferential treatment to any organization on the basis of the identity of the people who represent the organization, and given, again, the ties between his family, especially Sophie and her work for the charity, it would also violate that preferential treatment rule,” said Conacher.

Trudeau’s wife, Sophie Grégoire Trudeau, co-hosts the WE Well-Being podcast with Craig Kielburger’s wife, Leysa Cerswell Kielburger.

She has interviewed her mother-in-law, Margaret Trudeau, on the podcast, and the two, along with the prime minister, are regular guests on the WE Day stage in Canada, as well as in Britain and in the United States where they motivate young people to help others. Trudeau has appeared at WE Day more than half a dozen times since becoming a member of Parliament in 2008.

UPDATE - July 9, 2020: The Prime Minister’s Office issued a statement saying “according to Speaker’s Spotlight records, Sophie Grégoire Trudeau received $1500 for participation in an event in 2012, before the prime minister was leader of the Liberal Party. The Prime Minister has never received payment for any events with WE.”

PMO: Grégoire Trudeau not paid for podcast

Trudeau’s spokesman said Grégoire Trudeau is not compensated for the podcast although her travel, accommodation and expenses are paid for by the organization when she attends WE events.

“She is not paid,” Cameron Ahmad told HuffPost. “It is volunteer work, but when there are expenses related, her expenses incurred as part of the volunteer work, they have been covered.”

In a tweet, Dion’s office confirmed they had been in touch with Trudeau’s office and were looking into possible contraventions of three parts of the act.

“Examinations are conducted in confidence & report is released when completed,” the ethics watchdog’s office wrote.

Trudeau has twice been found to have violated the Conflict of Interest Act. Last year, Dion found the prime minister improperly pressured his former attorney general, Jody Wilson-Raybould, to intervene in the prosecution of SNC-Lavalin. In 2017, Dion’s predecessor, Mary Dawson, ruled Trudeau had broken the law when he accepted family vacations on the Aga Khan’s private island.

Friday morning, Trudeau said WE Charity, the not-for-profit arm of Craig and Marc Kielburgers’ WE organization, would no longer manage the Canada Student Service Grant (CSSG) program. In a statement, the government said WE Charity had also “decided to return any funds that had already been received.”

“The decision taken by WE this morning to withdraw from this work with the government is one that we support,” Trudeau told reporters assembled at the Moisson Outaouais food bank in Gatineau, Que.

“This situation unfolded in a way that is truly unfortunate, because one of the things that ends up happening with this is that young people won’t, maybe, have the same kind of access to programs that they … would have [had],” he said.

Trudeau added that the government would “need to reflect carefully on what exactly went wrong and how we can make sure that we’re doing a better job of supporting young people in the coming months and years.”

In its own statement, WE Charity said questions had been raised about the program’s origins, the outsourcing of the program’s operations, its own selection as a government partner, and about the merits of paid volunteer service.

“These are all valid questions, and the government has provided explanations for each,” WE’s co-founders Craig Kielburger and Marc Kielburger said. “However, controversy has not abated.”

“Our concern is that to continue in this way, the program itself will begin to suffer — and as a consequence, opportunities for students might be negatively affected.”

WE Charity said it would hand the program’s operation back to the government. A senior Liberal not authorized to speak publicly about the matter said WE would complete the placing of 20,000 students and the government would go back to the drawing board on implementing the next round of volunteer contracts. The CSSG program, first announced on April 22, offers post-secondary students or new graduates, under 30 years of age, payments of $1,000 for every 100 hours of volunteer service, up to a maximum of $5,000.

Craig (left) and Marc Kielburger introduce Prime Minister Justin Trudeau and his wife Sophie Gregoire-Trudeau as they appear at the WE Day celebrations in Ottawa on Nov. 10, 2015.
Adrian Wyld/CP
Craig (left) and Marc Kielburger introduce Prime Minister Justin Trudeau and his wife Sophie Gregoire-Trudeau as they appear at the WE Day celebrations in Ottawa on Nov. 10, 2015.

WE Charity stood to receive $19.5 million to administer the program, but, the co-founders said in order to put questions to bed about its motivations for getting involved in the initiative, they would waive all costs associated with establishing and administering the CSSG and would return any money earmarked for the organization and its staff.

The Kielburgers wrote that they were approached in late April by officials at Employment and Social Development Canada to lend support to the program, citing a likely reason being WE’s relationship with more than 125 school boards across Canada. In a June 12 call obtained by the National Post, however, Marc Kielburger says his organization was asked directly by the Prime Minister’s Office (PMO) to help implement the CSSG the day after it was announced. WE Charity told the paper that Kielburger “misspoke.”

Trudeau, who appeared defensive about the original contract, repeated Friday that the selection of WE Charity was a decision made by bureaucrats.

“We knew from the beginning that because of work that has been ongoing between this government and WE, that this was a decision made — that needed to be made by our professional public service. They made the decision in a transparent and open way … and a rigorous way … to ensure that we have the right partnerships to move forward on this opportunity for young people,” he said.

Trudeau has appeared as a volunteer several times at WE Day events since becoming prime minister. Ahmad said he did not know whether Trudeau or Grégoire Trudeau had been paid by the WE organization before his becoming a member of Parliament.

Trudeau’s chief of staff formerly had ties to charity

The spokesman was unable to say whether other members of Trudeau’s cabinet may have dealings with WE, or how frequently they or the PMO had been lobbied by the Kielburgers or other staff from the WE organization.

WE Charity did not respond to inquiries from HuffPost Canada.

Trudeau and his family aren’t the only people in his entourage with former ties to WE.

His chief of staff, Katie Telford, is a co-founder of Artbound, a Toronto charity that puts on glamorous parties to raise money in support of arts education abroad. Their first project involved funding an arts program in a school run by WE Charity (then known as Free The Children). According to the latest Canada Revenue Agency filings, Artbound’s largest donation was a $30,000 gift to WE Charity in 2018 for a project in Haiti. It also gave WE Charity more than $50,000 the previous year.

Telford is not involved in the running of the organization, and her ties ceased before she became Trudeau’s chief of staff, Ahmad said. According to WE Charity’s annual reports, she was last listed as an “outstanding partner and supporter” in 2017. (Gerald Butts, Trudeau’s former principal secretary is also listed that year, as is AOL Canada, which is a sister brand to HuffPost. Both are now owned by Verizon Media).

Telford’s close friend, Liberal strategist and CBC pundit Amanda Alvaro, is fellow Artbound co-founder and remains one of the charity’s directors. She and Natural Resources Minister Seamus O’Regan, when he was still a CTV anchor and Artsbond’s honorary chair, travelled to Kenya in 2011 and stayed at WE’s for-profit social enterprise camp in the Maasai Mara when they went to help build their art school. (O’Regan’s office said he paid his own way. Telford did not go on that trip.)

The government’s contract with WE has drawn criticism from several corners.

Union casted doubt on government’s claims

The union of public servants, the Public Service Alliance of Canada, cast doubt on the government’s assertions that WE Charity was the only group that could administer the new grant program, saying that was not only “factually wrong” but also “insulting” to its members. Bureaucrats worked hard to support the government’s evolving response to the coronavirus pandemic, such as establishing the Canada Emergency Response Benefit (CERB), PSAC National President Chris Aylward said in a statement.

“Keeping administration of the [grant program] public would support accountability, oversight and proper handling of private applicant information,” Aylward said.

Conservative MPs have raised concerns about the contract and asked the procurement ombudsman and the auditor general to look into the matter. Taking the program outside of the government meant it was not covered by several transparency and accountability measures.

Conservative finance critic Pierre Poilievre tweeted Friday that opposition MPs on the finance committee were working to force an investigation into “how much Trudeau already spent on the WE boondoggle and how the scandal got this far.”

Some stakeholders have also wondered why Canada Service Corps, a national volunteer organization run by the federal government that Trudeau himself established in 2018, had not been tasked to do the job. Youth Minister Bardish Chagger’s director of communication, Dani Keenan, told HuffPost that Canada Service Corps already had 1,500 projects and “was not in a position to do a project of this scale.”

WE Charity also raised eyebrows earlier this week for posting on the program’s volunteer bank hundreds of applications for positions within its own organization. The Kielburgers said the postings, such as 1,250 opportunities as a “wellbeing digital resource creator” were the results of being “asked to provide a certain number of WE Charity service opportunities” in order to “help anchor the program at launch.”

Watch: Trudeaus draw big cheers at WE Day event in New York. Story continues below.

But with more than 24,000 placements available with other not-for-profit groups, WE’s co-founders said the volunteering guarantees were no longer necessary and WE would no longer offer the positions to avoid “any perceived undue benefit.”

Some teachers also raised concerns after receiving unsolicited emails from WE Charity offering them up to $12,000 this summer if they recruited, led and mentored 75 to 100 students into the program before the end of June. One teacher, who feared professional repercussions, told HuffPost she thought the offer was “very shady.” The Canadian Teachers’ Federation said it would seek more information but would be concerned if teachers were under pressure or required to recruit youth.

Greg Thomson, the research director at Charity Intelligence Canada, a group that pores over financial reports and helps donors make decisions about which charities to support, told HuffPost that his group has received several inquiries about the WE organization.

WE Charity’s relationship with ME to WE, the pro-profit arm of the Kielburgers’ organization, has led to questions, Thomson said, as has “the huge overhaul in their board earlier this year…[which] was almost unprecedented in terms of a large charity.”

Charity watchdog: ‘It was a bad decision-making process’

Discussions with WE Charity’s have not been as fruitful as Charity Intelligence Canada had hoped, Thomson said. “We’ve found them to be not as transparent as we would like, and getting less so,” he said, noting the charity has not provided its 2019 financial statements yet, or posted them online.

Thomson said he found the multimillion-dollar untendered contract to WE Charity “very, very odd.

“It was a bad decision-making process as far as we are concerned,” he said. “It doesn’t make sense.”

If WE Charity had been asked to work with middle school kids, Thomson said, it would make more sense, since the group has a good network with school boards, but administering a program for post-secondary students is not its usual focus.

Thomson said he thinks WE Charity was right to pull out of the project since the controversy was overshaddowing the program.

“I think ending the relationship was good all around. I’m sure WE doesn’t want to be under the microscope like they have been,” he said.

With files from Ryan Maloney

NOTE: The author of this article travelled to Free The Children/WE Charity’s Maasai Mara camp in 2014 as part of a corporate trip that was partly funded by the author and AOL.

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