National Post (National Edition)
HOW WE CHARITY BECAME A VICTIM OF OTHERS' ERRORS
New book outlines fall of Kielburger brothers
EVEN IF WE HAD THE STAFF AT THIS TIME, OUR PR TEAM WAS NEVER BUILT TO BE A CRISIS COMMUNICATIONS DEPARTMENT. THEIR FOCUS HAS ALWAYS BEEN TO SHARE POSITIVE NEWS WITH THE PUBLIC, LIKE WE DAY CELEBRATIONS. — CRAIG KIELBURGER
In the early days of the global pandemic, the Trudeau government wanted to provide students with an opportunity to work during the summer while helping their communities. It announced that the Canada Student Service Grant (CSSG) was to be administered by The WE Charity, part of a well-known organization founded by Toronto brothers Craig and Marc Kielburger. A political maelstrom ensued, leading to the closing of The WE Charity in Canada. In the new book What We Lost, author Tawfiq Rangwala, a Toronto-born lawyer who was on WE Charity's board, writes that the CSSG announcement came as a shock to WE management and board, as they hadn't even signed a contract and there were many details to be ironed out.
At a press briefing on July 8, 2020, Prime Minister Justin Trudeau was asked by Marieke Walsh of the Globe and Mail if he had recused himself from cabinet discussions about WE Charity and the CSSG. He said no. Then he dodged the question when asked why. “I have long worked on youth issues, both before I got into politics and since I've been in politics as a youth critic,” he said. “Getting young people involved in serving their country, recognizing their desire to build a better Canada, particularly through this time of crisis, is something that I believe in deeply.”
Just two days later, the CBC ran a story revealing that Finance Minister Bill Morneau had also failed to recuse himself from conversations about the organization.
After some initial defiance, the finance minister backtracked and posted a written apology to Twitter.
The fact that Trudeau and Morneau did not recuse themselves from the cabinet decision to appoint WE as the administrator of the CSSG came as a complete shock to the organization. This bears repeating because it is so misunderstood: WE Charity and the Kielburgers had no idea whether politicians had recused themselves or what steps they did or did not take to comply with their own ethics rules on government process. After all, from WE's perspective, nothing about the organization's involvement with the Trudeaus or Morneau was a secret. In fact, WE advertised Trudeau's involvement to the world by putting him and his wife on stage and having his mother and brother speak at dozens of public events. Similarly, WE Charity was proud that the Morneau-McCains (Morneau's wife is Nancy McCain, of the New Brunswick potato dynasty) were donors and had visited international projects. The hope was that they would tell everyone who would listen about their experiences— that was the point.
For everyone at WE, the assumption was that all government rules were followed and those who should have recused themselves did. No one asked anyone at WE for an opinion about whether Trudeau and Morneau should recuse themselves, and no one at WE offered one. And that is precisely as it should be.
In a one-two punch, WE Charity learned from the press at around the same time that the CSSG was a sole-source contract. This also came as a complete surprise. The organization had been told by various civil servants that they were asking other groups to submit proposals to deliver part or all of the program. In testimony before the finance committee Rachel Wernick, an assistant deputy minister at Employment and Social Development Canada (ESDC), and others would later explain that they had explored multiple options but finally determined that no other group had the capacity to administer the CSSG. Due to the tight time frame and the lack of viable options, the civil service asked only WE Charity to submit a formal proposal.
Unlike WE — which had no idea it was entering into a solesource contract — the cabinet members making the decision could of course have learned of this fact. Looking back, it is mind-boggling to me that in addition to failing to recuse themselves, both Trudeau and Morneau did not ask, did not care, or did not perceive how a sole-source contract might appear to the public or be exploited by opposition parties. In any event, their failure to hold up a stop sign and demand additional proposals from ESDC was catastrophic for WE Charity.
As both a board member and in the course of writing this book, I have been surprised by the number of people — including those who continue to
be supportive of WE Charity — who suggest that the organization was foolish not to see a conflict-of-interest issue coming.
How did WE not make sure there was no conflict when dealing with the government? Did the Kielburgers just miss this conflict because they were in a rush? Was the board asleep at the wheel? Perhaps WE should have had someone experienced in government procurement issues in the room?
As a lawyer who spends a lot of time thinking about and advising companies on conflict-of-interest issues, I find these questions both vexing and confusing. Let's be clear: entities and individuals have an obligation to monitor and, where necessary, disclose their own conflicts of interest. So I would have been concerned if someone within WE Charity had an undisclosed conflict because she was, for example, running an unrelated non-profit that would benefit from volunteer hours through the CSSG. WE Charity did not, however, have any responsibility to address conflicts of interest on the part of the government. Nor could it. How could any organization signing a contract with the government possibly know every rule that must be complied with, which employees might have conflicts, and whether internal checks and balances have been observed? Given that cabinet discussions are always confidential, outside groups have no insight into the decision-making process. If companies that engaged in activities with the government— whether selling pencils, providing health care, or delivering charitable services — were responsible for policing internal government compliance with its own rules, it would lead to paralysis and turn into a legal nightmare. How could any entity possibly be sure that every actor in the government had done the right thing?
This is why, with the CSSG, the obligation of recusal belonged to the ministers and other public office holders who were involved in making decisions. Period. To hold WE Charity accountable for ethics decisions by government actors is as ridiculous as holding a job applicant responsible for an employer's failure to comply with its internal hiring policies or labour laws. And yet, in peddling a scandal, this is the type of responsibility some politicians and media outlets tried to lay at the doorstep of WE Charity.
Morneau's failure to recuse was particularly thorny for the government.
Things only grew worse when Brian Lilley published a story about the Morneau family's Ecuador trip in the Toronto Sun on July 11.
“It's getting harder to tell where the Liberal Party of Canada ends and WE Charity begins,” Lilley wrote, before suggesting that it might be easier to ask which top Liberals didn't have a connection to WE than which did. The article also included a quote from Morneau's spokesperson, Pierre-Olivier Herbert, insisting that “the Morneau family covered all associated costs and expenses.” This statement turned out to be inaccurate. Eleven days later, Morneau told the finance committee that while preparing for his testimony, he realized ME to WE had not charged him for some of the expenses associated with his family's stay. His office, he said, had asked ME to WE for an invoice.
The costs of lodging, food, and in-country transportation were in the range of $13,000, but Morneau's team twice asked WE to raise the tally to the highest possible amount someone could pay for such a trip. The Morneau-McCain family had stayed for a shorter visit than was typical, but his office wanted a total with no deductions for the excluded days or any other discounts whatsoever. It probably seems unusual to most Canadians to dramatically overpay for a trip, but this request was likely made to avoid future issues with the ethics commissioner.
The morning of his finance appearance, Morneau wrote a cheque for $41,000, the maximum possible amount. The money was paid to WE Charity rather than ME to WE (with the social enterprise eating the costs for the benefit of the charity). And no, the minister did not receive a tax receipt.
Meanwhile, even though WE Charity had stepped away from the CSSG, the media's interest in the organization did not subside. In fact, the number of media requests grew exponentially in the aftermath of Trudeau's non-recusal admission. On a single day in July, four different CBC reporters contacted WE for comment on a variety of stories, as did dozens of other journalists from news outlets across Canada.
In the days, weeks, and months that followed, the organization's small public relations team — a fraction of its usual size because of the COVID layoffs — was pushed to its limits, responding to over five thousand media requests, many with deadlines of only a few hours.
“Even if we had the staff at this time, our PR team was never built to be a crisis communications department,” Craig explained. “Their focus has always been to share positive news with the public, like WE Day celebrations and impacts being made in partner communities overseas.”
THE MERE FACT OF HIRING PUBLIC SPEAKERS IS NOT AN ISSUE. HOSPITALS PAY HONORARIUMS FOR CELEBRITY GOLF TOURNAMENTS AND UNIVERSITIES FOR LECTURE SERIES, AND COUNTLESS CHARITIES PAY CELEBRITIES TO SPEAK AT GALA DINNERS. — TAWFIQ RANGWALA
And soon, the media had a new angle on WE's relationship with the Trudeaus. On June 26, in response to a question from CBC journalist Janyce McGregor regarding Trudeau family member appearances at WE Days, the charity stated that it had never paid honorariums to anyone in the family, although it had covered Sophie Grégoire Trudeau's travel costs. As it turned out, there were two problems with this statement. First, it was an overly technical answer. The organization should have proactively acknowledged that while the charity had not paid speaking fees, its social enterprise partner, ME to WE, had paid honorariums to Margaret Trudeau and Alexandre Trudeau for their participation at fundraising events that sometimes ran parallel to WE Days. Second, and more troublingly, it turned out that the accounting team at WE Charity had mistakenly paid certain honorarium bills instead of ME to WE. This error came to light when journalist Jesse Brown said he had an invoice showing WE Charity had paid an agency called Speakers' Spotlight $7,000 to hire Margaret Trudeau for an event on October 20, 2017.
The mere fact of hiring public speakers is not an issue. Hospitals pay honorariums for celebrity golf tournaments and universities for lecture series, and countless charities pay celebrities to speak at gala dinners. WE Charity did not typically rely on traditional fundraising vehicles like lotteries, telemarketing calls, street canvassers, or TV commercials, and instead found it more cost-effective and impactful to at times pay high-profile supporters to attend smaller fundraising events, engage with guests, and hopefully boost donations. Speakers and performers were never paid for appearing at WE Day — that was viewed as a privilege.
Even big names like Selena Gomez, Jennifer Aniston, Demi Lovato, and Lilly Singh — people who could command hundreds of thousands of dollars for appearances — were not paid (other than being reimbursed in some cases for out-of-pocket expenses).
Fundraising events, however, were different because they required additional commitments that were not always easy to secure for free.
Dalal, Craig, and Marc explained to me that when speakers were willing to appear at no cost, that was the preferred option. But those who typically charged for their services and were perceived as likely to boost fundraising at these ancillary events were given honorariums. It was a discretionary decision by WE executive management. Other paid speakers at WE fundraising events included well-known Canadians like astronaut Chris Hadfield, wheelchair racer and senator Chantal Petitclerc, and rapper Kardinal Offishall. If funding for speakers was available from corporate sponsors for specific initiatives run by WE Charity, the bill was footed by those sponsors or included as part of the packaged cost of sponsoring an event. When funding was not available, ME to WE would step in and pay to assist WE Charity. This was the case with Margaret Trudeau.
According to WE Charity, between October 2016 and March 2020, she was hired to take part in twenty-seven events, and for each of those, she provided an average of three to five “extras” per engagement (things like meeting and greeting donors and guests before and after events). For this work, she received a total of $180,000 in fees, or an average of $6,666 per engagement. The total expenses for these appearances, which included several international trips to the U.S. and the U.K. and covered things like flights, food, hotels, and car services, were just over $163,600. These are hardly astronomical numbers given her profile as a bestselling author, well-known mental health activist, and yes, mother of the current prime minister and spouse of a former prime minister. For his part, Alexandre Trudeau was hired nine times and received $36,000, or $4,333 per engagement, to speak about his documentary films and environmental work. These honorariums were in line with those received by other well-known individuals who participated in WE fundraising events over the past decades. Everything was arranged and paid through Speakers' Spotlight, a large talent and speaker agency that represents celebrities of all types, including Joe Clark, Mary Walsh, and Peter Mansbridge.
It is important to note here that Margaret Trudeau is a professional speaker. Her relationship with WE Charity is not unique. She has for decades accepted paid engagements from companies and organizations.
Past clients listed on her speaking bureau website include the Economic Club of Canada, the Royal Inland Hospital Foundation, Northern Ontario Business, Pathstone Foundation, and AppDynamics, as well as many non-profits that receive government funding, such as the Canadian Mental Health Association, the University of Ontario Institute of Technology, the YWCA, and McMaster University. She has also been engaged by corporations that do business with the government, such as the Bank of Montreal.
Although I don't know how much Margaret Trudeau was paid by these organizations, I think it is fair to assume it is, in total, many times greater than the amount paid to her by WE. None of these entities are, to my knowledge, prohibited from working with the government or from accepting federal funding. And I am not aware of any public or private effort to investigate the extent to which these organizations have interacted with the Liberals over the years in which Justin Trudeau has been prime minister.
The bottom line is that any scrutiny regarding Margaret Trudeau's speaking engagements for WE Charity should have focused on whether her speeches created a conflict of interest for her son, and if so, whether he managed the conflict by recusing himself from the decision to award the CSSG to WE. The charity had no say in that decision.
But none of this mattered to the politicians, pundits, and journalists looking for scandal.