POLITICS
07/31/2020 08:50 EDT | Updated 07/31/2020 11:20 EDT

Trudeau’s WE Testimony Spurs New Questions About His Office, Morneau’s Future (Analysis)

Both the prime minister and his chief of staff suggested they didn’t believe there was a conflict.

Sean Kilpatrick/CP
Prime Minister Justin Trudeau appears as a witness via videoconference during a House of Commons finance committee on July 30, 2020.

OTTAWA — Prime Minister Justin Trudeau may have put to bed Thursday the notion there was political interference in the awarding of a multimillion-dollar contract to a charity with ties to his family, but he opened up a series of questions about the running of his office and the political lifespan of his current finance minister.

“I did not influence the public service to choose this organization,” Trudeau told MPs on the finance committee. The prime minister said he first heard that WE Charity had been selected as the administrator of the Canada Student Service Grant (CSSG), a program he announced to the country in late April, on May 8, when the proposal was to be approved by cabinet. That’s when, Trudeau said, he and his chief of staff, Katie Telford, who was also only just hearing about this, “put the brakes on it.” He said he was concerned that the choice of WE might bring on more public scrutiny and that there might be the “perception” of a conflict of interest “because of the connections with my family on this.”

Watch: Trudeau insists intentions were good with WE deal

 

But both Trudeau, who testified for 90 minutes, and Telford, who sat in the chair for more than two hours, suggested they didn’t believe there was a conflict. 

The work of the prime minister’s wife, Sophie Grégoire Trudeau, as a volunteer “ambassador” for WE had been cleared by the ethics commissioner; and the refunds for her travel expenses — incurred during the course of her work — were also approved by the watchdog, he said. While he had appeared on the WE Day stage multiple times, Trudeau was not paid. His family would not be reaping any benefits from the charity's being awarded the program, he added. Trudeau repeated again that he had been unaware his mother, Margaret, and his brother, Alexandre, were paid tens of thousands of dollars to speak at the charity’s events — often sharing the stage with him and Grégoire Trudeau.

Trudeau and Telford repeatedly stated that the advice they received was that WE Charity was the only organization capable of administering the CSSG.

“The public service came forward with a recommendation to cabinet to move forward either with this specific third-party provider that was WE Charity, or else not move forward with the program at all — that was the binary choice proposed to us,” Trudeau told the committee.

But why? Could the program not have been structured differently to allow for multiple bidders or providers? Neither Trudeau nor Telford were asked that question.

Trudeau told Canadians he had envisaged, when the program was announced, that the Canada Service Corps — an outfit he’d designed to encourage youth volunteerism across the country — would be tasked with the job. But during her appearance, Telford suggested to the Green Party’s Elizabeth May that that no one told the prime minister that his baby, the Canada Service Corps, was too small to take on the task. Trudeau, however, acknowledged that he knew of the program’s limitations and was unsurprised by the news.

In fact, on May 8, the selection of WE as the program administrator was practically a done deal. On May 5, cabinet’s COVID committee — chaired by Deputy Prime Minister Chrystia Freeland — had approved the plan. That same day, the prime minister’s policy director had a conversation with WE and, Telford said, they were redirected to Employment and Social Development Canada (ESDC), from where the program emanated. 

That same day, WE started spending money working on the program.

The co-founders of WE, Craig and Marc Kielburger, told MPs earlier this week that the agreement “technically began on May 5” and that they were working with ESDC with the understanding that if the agreement didn’t go forward, WE would be on the hook. “We accepted that risk because we really wanted to help,” Marc Kielburger told MPs. 

Unclear what due diligence was done in May

Two weeks later, on May 22, cabinet approved the sole-sourced contribution agreement with WE. On June 25, the program with WE Charity was announced to the public. The contract for the deal had been signed on June 23 but was backdated to May 5.

On June 30, WE received $30 million from the government for expenses it had incurred for the planning and building of the program. A few days later, on July 3, the government and WE announced that they were parting ways, and WE said it would return all the funds it had received in developing the grant program. 

After Thursday’s testimony, it remains unclear what due diligence was done between May 8 and May 22 to give the prime minister satisfaction that the decision to give WE a half-a-billion-dollar contract would pass the smell test.

WE had been floated as a possible program administrator earlier, Telford said, towards the end of her testimony. On April 20, in a large briefing binder, WE was discussed at least twice — in Annex 4 as a potential outfit to run the CSSG grant, and in Annex 9 as the provider of social entrepreneurship grants for youth. On April 9, WE had sent a proposal to some cabinet ministers, including one of Telford’s best friends, International Trade and Small Business Minister Mary Ng, discussing an entrepreneurship grant. That proposal was rejected, the chief of staff said, because it was seen as perhaps a more useful program in the post-COVID economic recovery than in helping people survive the crisis at hand. Telford told committee members that she never spoke to Ng about “that proposal.”

If Telford or Trudeau had any concerns about WE’s administering either programs, they appear not to have raised any flags on April 20 or at any time until the morning of cabinet’s scheduled decision on May 8.

And perhaps why would they? The federal government had given WE some money before without any public outcry. The prime minister had no ethical screen involving WE. 

“In hindsight,” Trudeau said Thursday, “I should have recused myself, and perhaps the program would be delivering for students across the country right now, but I did not. Instead, I put the brakes on it and said let’s make sure that it is doing things the right way so that we don’t have any communications ... problems.”

Both Trudeau and Telford testified that neither was aware “until recently” that Finance Minister Bill Morneau — a member of the COVID cabinet committee — might have a conflict of interest, or be perceived to have one. Each said they were not aware Morneau and his family members had travelled to Kenya and Ecuador in 2017 on WE’s dime, or that one of his daughter’s was employed by WE.

They did know another daughter was involved with the charity, they said. Telford noted that Clare Morneau’s book on young refugee girls included a quote from one of the Kielburger brothers on its jacket.

“I believe the minister of finance has already said that he wished that he had recused himself,” Telford told the committee. “He’s apologized for that and does not believe there is a conflict beyond that, but that is for the conflict commissioner to spend time on, and everyone has agreed to co-operate fully.” 

Both Trudeau and Morneau had said that upon reflection, “they wished they had recused themselves — and that, I agree with,” Telford later added.

Last year, Morneau announced $3 million for social entrepreneurship grants with WE, an organization based in his riding. 

Sean Kilpatrick/CP
Katie Telford, chief of staff to the Prime Minister, is viewed on a laptop computer as she appears as a witness via videoconference during a House of Commons finance committee on July 30, 2020.

Having WE Charity administer the CSSG was also suggested by Finance department officials, according to testimony by Rachel Wernick, the senior public servant at ESDC tasked with coming up with options for a student service program. After those discussions, Wernick said, she volunteered to call WE Charity on April 19, because of her personal working relationship with Craig Kielburger. On April 22, she told MPs she learned of the program’s details — an education grant of up to $5,000 for students who volunteered in their communities this summer —when the prime minister announced a $9-billion package for students.

That same day, Wernick testified that WE Charity sent her a “detailed proposal to quickly develop tens of thousands of volunteer placements for youth within a few weeks.”

Although finance officials provided Wernick the parameters of the program, she said, she and her colleagues determined that WE’s draft proposal “was the best available option in the time we had to work with.” 

Morneau told MPs on the finance committee last week that he was unaware he had benefited from WE’s generosity. He cut the organization a $41,366 cheque to repay the expenses the day he testified.

Morneau’s future as finance minister in jeopardy?

While Trudeau faces his third ethics investigation over the WE Charity contribution agreement, Morneau now faces an expanded probe and questions about whether he broke the law when he accepted WE’s sponsored travel on a private charter.

Conservative MPs demanded to know Thursday how many ethics violations it takes to get booted from Trudeau’s cabinet. 

“Which minister will you fire?,” Ontario MP Michael Barrett asked.

It’s unlikely that even with three strikes Trudeau will demote himself. But could Morneau’s future as finance minister be uncertain?

In Liberal circles, tongues are wagging. 

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, HuffPost’s previous owner..