WE really need to get rid of this guy
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No hard hitting articles from Canada's paid for MSM
The WE scandal and Justin Trudeau’s testimony: A primer
Trudeau denies, deflects — and apologizes — in testimony to committee looking at WE scandal
5 takeaways from Trudeau’s testimony in WE Charity scandal investigation
Matt Gurney: It's hard to imagine that any minds were changed by Trudeau's testimony
WE fallout expected to continue as MPs seek more info, witnesses
The Calgary Herald is the only paper I read that shows any sign of questioning Trudie's testimony
Corbella: Trudeau's WE scandal testimony leaves him battered and bruised
The WE scandal and Justin Trudeau’s testimony: A primer
Trudeau denies, deflects — and apologizes — in testimony to committee looking at WE scandal
5 takeaways from Trudeau’s testimony in WE Charity scandal investigation
Matt Gurney: It's hard to imagine that any minds were changed by Trudeau's testimony
WE fallout expected to continue as MPs seek more info, witnesses
The Calgary Herald is the only paper I read that shows any sign of questioning Trudie's testimony
Corbella: Trudeau's WE scandal testimony leaves him battered and bruised
GUNTER: WE trips seem like charity done Kardashian-style
“Your well-being is our top priority — whether it’s airport transfers, tailor-made excursions, turndown service or bespoke private cottages and luxury tents.”
Nothing wrong with that. Except isn’t the WE Charity touting international development as its primary goal?“Your well-being is our top priority — whether it’s airport transfers, tailor-made excursions, turndown service or bespoke private cottages and luxury tents.”
Doesn’t this seem as if WE is offering international development like a cruise-ship excursion or a theme park ride for rich kids?
On the way downriver to their Minga Lodge in Ecuador, guests will “pass by families panning for gold at the river’s edge” and “carving out their lives in the midst of lush green trees.”
On the road to Bogani in Kenya, you’ll be driven past “homesteads and farms,” where “you’ll be greeted with friendly smiles, waves and excited calls of “Jambo!” (Swahili for hello) from local children.”
In Araveli, in India, you’ll see “towering white temples, wheat fields, bustling villages and colourful markets,” as world-class staff whisk you to “hot showers, delicious meals and beautiful, comfortable accommodations … expert local guides and friendly staff.”
(I thought they were bringing water to the villages, not the presidential suite.)
There is plenty of “early morning yoga” and “community walks,” shopping from local artisans and cultural presentations.
And the purpose of all this pampering and comfort?
“Letting you focus on being present and connected.”
Oh, right, if you want to get the most out of your experience learning how people in developing countries scratch and claw to survive, you’ll want to be sure to be “present and connected.”
nationalpost.com/opinion/columnists/gunter-we-trips-seem-like-charity-done-kardashian-style/
Commons committee puts spotlight on a WE empire often viewed with skepticism
Former WE Charity board chair Michelle Douglas made numerous damning statements about the governance of WE Charity to the House of Commons finance committee on Tuesday, July 28, 2020. parlvu.parl.gc.ca
Former WE Charity board chair Michelle Douglas made numerous damning statements about the governance of WE Charity to the House of Commons finance committee on Tuesday, July 28, 2020. parlvu.parl.gc.ca
"But if the WE Movement is under threat, it’s in part because the national media, politicians, and business partners are now scrutinizing an organization that has been viewed skeptically by people involved in the non-profit sector and analysts such as Charity Intelligence. (The Kielburgers singled out Charity Intelligence for criticism during their testimony, alleging it has been providing misinformation to the media about WE.)
The main source of skepticism has been the relationship between WE Charity, the primary charitable arm, and ME to WE, a for-profit sibling organization that the brothers say supports the work of the charity as an innovative “social enterprise.” But WE also includes a myriad of subsidiaries, foundations and international branches, and the boundaries between them are not always crystal clear.
It has been revealed, for example, that Trudeau family members were paid for WE Day appearances by WE Charity when they were supposed to be paid by ME to WE. It has also been revealed that the government’s funding agreement to run the grant program was signed by the newly-formed WE Charity Foundation, despite it being WE Charity that was actually running the program.
Yet immediately preceding the Kielburgers’ appearance, the committee had heard from Michelle Douglas, the former WE Charity board chair. Douglas made numerous damning statements about the governance of WE Charity, including that WE Charity’s management refused to provide her with more financial information in March when mass layoffs were happening.
“I demanded that the executive team produce those (financial) records,” she said about a phone call taking place on or around March 23. “The call was abruptly concluded.”
She said Craig later asked her to resign, and she chose to do so. “I resigned because I could not do not my job,” she said. “I could not discharge my governance duties.”
The Kielburgers disagreed with her characterization of events, saying they had differed with Douglas over what level of reporting was sufficient, and that they had already planned to have a “board renewal” in 2020.
Even before Douglas’ testimony, significant questions had been raised in the past few weeks about the state of WE Charity’s finances and its relationship with ME to WE.
WE says that the primary function of ME to WE is to support the work of WE Charity through multiple forms, including donating most of its profits to the charity, creating jobs in nine different “WE Village” regions by selling products made in those countries to Western consumers, and hosting “voluntourism” trips.
The brands are inextricably linked despite the fact that one is a for-profit corporation. When a potential donor goes on a ME to WE trip to say, Kenya, the idea is that the donor will eventually park some money in WE Charity. “This model has resulted in tens of millions of dollars directly donated by these funders to WE Charity,” WE said in a statement to the Post.
ME to WE says it has donated $21.4 million to its charitable arm in the last 11 years, which would account for barely five per cent of WE Charity’s total revenue since 2009. But of that, $8.6 million were “in-kind” contributions — in other words, not actual money. WE told the Post it includes items such as “donated ME to WE Trips hosting donors and youth on scholarship, donated printing of educational materials, donations of ME to WE Artisans from women in Kenya.” It did not answer the Post’s question about whether the Kielburgers’ time spent on the charity is included as an in-kind donation.
The money flows in both directions. In fiscal 2019, the charity paid rent to ME to WE for the first time — $170,400 for leasing a building owned by ME to WE that it was allowed to use for free in 2017 and 2018. WE told the Post it was advised to do this as a transaction for insurance reasons.
According to audited financial statements, the charity has paid ME to WE more than $11 million since 2009, all in cash. The financial statements say much of this is for the purchase of promotional items or travel and leadership training services. But given the overlap between the two organizations, such as the fact they share the same chief financial officer, it raises questions about how these prices are set. “ME to WE Social Enterprises seeks to provide the select items which WE Charity purchases at the most significant reduced cost possible, either wholesale costs or hard cost,” WE told the Post.
The charity had also violated its loan covenants for two years in a row, failing to pay back millions in bank loans despite having the assets to do so. As of August 31, 2019, WE Charity had to request an extension of their bank covenants on two short-term loans that amounted to just over $9 million, financial statements show. The deferments were granted by the bank — a move that made sense according to one auditor the Post spoke with, only because WE Charity had tens of millions in real estate secured against these loans.
“It is certainly slightly unconventional that they would choose to have these revolving debt facilities when they have enough in other securities and assets to simply not be in debt,” said the auditor who spoke to the Post on the condition of anonymity because he was not authorized to speak with the media. “Of course there’s nothing wrong with structuring your finances this way, but it is more typical of a private corporation than a charity.”
nationalpost.com/news/politics/commons-committee-puts-spotlight-on-a-we-empire-often-viewed-with-skepticism
Sure sounds like the perfect vehicle to deliver - a tax-payer funded program worth millions of dollars - for the liberals who never miss a chance to help out their pals./s
The main source of skepticism has been the relationship between WE Charity, the primary charitable arm, and ME to WE, a for-profit sibling organization that the brothers say supports the work of the charity as an innovative “social enterprise.” But WE also includes a myriad of subsidiaries, foundations and international branches, and the boundaries between them are not always crystal clear.
It has been revealed, for example, that Trudeau family members were paid for WE Day appearances by WE Charity when they were supposed to be paid by ME to WE. It has also been revealed that the government’s funding agreement to run the grant program was signed by the newly-formed WE Charity Foundation, despite it being WE Charity that was actually running the program.
Yet immediately preceding the Kielburgers’ appearance, the committee had heard from Michelle Douglas, the former WE Charity board chair. Douglas made numerous damning statements about the governance of WE Charity, including that WE Charity’s management refused to provide her with more financial information in March when mass layoffs were happening.
“I demanded that the executive team produce those (financial) records,” she said about a phone call taking place on or around March 23. “The call was abruptly concluded.”
She said Craig later asked her to resign, and she chose to do so. “I resigned because I could not do not my job,” she said. “I could not discharge my governance duties.”
The Kielburgers disagreed with her characterization of events, saying they had differed with Douglas over what level of reporting was sufficient, and that they had already planned to have a “board renewal” in 2020.
Even before Douglas’ testimony, significant questions had been raised in the past few weeks about the state of WE Charity’s finances and its relationship with ME to WE.
WE says that the primary function of ME to WE is to support the work of WE Charity through multiple forms, including donating most of its profits to the charity, creating jobs in nine different “WE Village” regions by selling products made in those countries to Western consumers, and hosting “voluntourism” trips.
The brands are inextricably linked despite the fact that one is a for-profit corporation. When a potential donor goes on a ME to WE trip to say, Kenya, the idea is that the donor will eventually park some money in WE Charity. “This model has resulted in tens of millions of dollars directly donated by these funders to WE Charity,” WE said in a statement to the Post.
ME to WE says it has donated $21.4 million to its charitable arm in the last 11 years, which would account for barely five per cent of WE Charity’s total revenue since 2009. But of that, $8.6 million were “in-kind” contributions — in other words, not actual money. WE told the Post it includes items such as “donated ME to WE Trips hosting donors and youth on scholarship, donated printing of educational materials, donations of ME to WE Artisans from women in Kenya.” It did not answer the Post’s question about whether the Kielburgers’ time spent on the charity is included as an in-kind donation.
The money flows in both directions. In fiscal 2019, the charity paid rent to ME to WE for the first time — $170,400 for leasing a building owned by ME to WE that it was allowed to use for free in 2017 and 2018. WE told the Post it was advised to do this as a transaction for insurance reasons.
According to audited financial statements, the charity has paid ME to WE more than $11 million since 2009, all in cash. The financial statements say much of this is for the purchase of promotional items or travel and leadership training services. But given the overlap between the two organizations, such as the fact they share the same chief financial officer, it raises questions about how these prices are set. “ME to WE Social Enterprises seeks to provide the select items which WE Charity purchases at the most significant reduced cost possible, either wholesale costs or hard cost,” WE told the Post.
The charity had also violated its loan covenants for two years in a row, failing to pay back millions in bank loans despite having the assets to do so. As of August 31, 2019, WE Charity had to request an extension of their bank covenants on two short-term loans that amounted to just over $9 million, financial statements show. The deferments were granted by the bank — a move that made sense according to one auditor the Post spoke with, only because WE Charity had tens of millions in real estate secured against these loans.
“It is certainly slightly unconventional that they would choose to have these revolving debt facilities when they have enough in other securities and assets to simply not be in debt,” said the auditor who spoke to the Post on the condition of anonymity because he was not authorized to speak with the media. “Of course there’s nothing wrong with structuring your finances this way, but it is more typical of a private corporation than a charity.”
nationalpost.com/news/politics/commons-committee-puts-spotlight-on-a-we-empire-often-viewed-with-skepticism
Sure sounds like the perfect vehicle to deliver - a tax-payer funded program worth millions of dollars - for the liberals who never miss a chance to help out their pals./s
Property brothers: Kielburgers facing scrutiny over WE organization's $50M real estate empire
www.thechronicleherald.ca/business/perspectives-on-business/property-brothers-kielburgers-facing-scrutiny-over-we-organizations-50m-real-estate-empire-
WE Charity's plan to pay teachers to recruit students for grant program posed ethical dilemma for some
OTTAWA — A proposal by WE Charity to pay teachers $12,000 for recruiting student volunteers into the Canada Student Service Grant program would have put many teachers in violation of their professional code of conduct, experts say.
But even though the grant program is now being run by the federal government instead of WE, it’s unclear whether the $12,000 payments might still happen. A week after the National Post asked Employment and Social Development Canada if the teacher payments are happening, the department still hasn’t answered.
“It’s at the very least a moral conflict of interest, but it’s also in violation of many elementary (ethics) rules,” said Marc Boudreau, a labour lawyer and partner at Quebec firm Marceau Boudreau. “The question is: ‘Does the teacher have a personal interest in this situation?’ And the answer is yes, $12,000.”
“Absolutely there is a conflict of interest for teachers,” said Gilles LeVasseur, a law professor at the University of Ottawa. “If you recruited people as a teacher…and you never say ‘I’m doing it on a personal basis,’ you open yourself to disciplinary measures when there’s a violation of the code of conduct.”
The teacher payments came to light when WE Charity published a posting promising to pay $12,000 to any teacher who recruited at least 75 student volunteers (or 55 volunteers in rural areas). That’s more than double the maximum grant of $5,000 available to students under the federal program.
At the time, WE Charity referred all questions about the payment plan to the federal government. After a week of controversies surrounding the government’s decision to outsource the grant program, WE Charity pulled out of the deal on July 3, leaving it in the government’s hands.
On July 20, the Post asked Employment and Social Development Canada — the federal department now running the grant program — whether teacher incentive payments are still part of the program or may still be paid out this summer. One week later, the department has still not responded.
Though the professional code of conduct for teachers varies by provinces and teacher associations, the proposed $12,000 payments would likely violate the code in most cases, experts said — including one teachers’ union.
The Alberta Teachers’ Association (ATA) code, for example, stipulates that teachers “may not take advantage of a professional position to profit from the sale of goods or services to or for pupils in the teacher’s charge.”
According to the ATA’s Executive Secretary and CEO Dennis Theobald, the $12,000 proposition to teachers may expose them to a complaint of unprofessional conduct.
“A teacher who received payment from a charity (or government or a private sector enterprise) as an incentive to recruit students with whom they are otherwise personally engaged or responsible for as a teacher may place themselves at risk of such a complaint,” Theobald said in a statement to National Post.
There is similar language in many other codes. The Manitoba Teachers’ Society code says that each one of its members “recognizes that a privileged relationship with students exists and refrains from exploiting that relationship for material, ideological or other advantage.”
The code of the New Brunswick Teachers’ Association says teachers must not “accept personal gifts which would not directly benefit the school program, from companies servicing the needs of schools or student extracurricular activities.” It also says teachers must not “use his/her position to profit from the sale of goods and services to or for pupils in the teacher’s charge.”
According to the Ontario College of Teachers, “practising the profession while the member is in a conflict of interest” is considered to be a professional misconduct that can lead to a disciplinary hearing.
A spokesperson for the College declined to answer if WE Charity’s offer to students put teachers into a situation of conflict of interest.
But both LeVasseur and Boudreau say even that definition may be clear enough to get teachers in trouble if they take the payments.
Now that the Canada Student Service Grant is back in government hands, LeVasseur says it should scrap any plans to pay teachers because the idea was fundamentally problematic from the start due to a teacher’s position of authority.
For example, a student may have felt obliged to sign up as a volunteer after being approached by a teacher simply because they feared their grades could be affected negatively if they refused, LeVasseur pointed out.
“They have to cancel and restart the program from scratch,” he said. “You have a duty to serve the best interests, especially because you’re in a position of authority like a teacher.”
For Boudreau, it all boils down to whose interests teachers want to serve. “The best way for an employer to ensure that its employees’ decisions are taken in the best interest of the organization is forbid them from accepting gifts from external sources,” he said.
o.canada.com/news/canada/we-charitys-plan-to-pay-teachers-to-recruit-students-for-grant-program-posed-ethical-dilemma-for-some/wcm/
Feds considered other groups before WE deal but most were never told about program
OTTAWA -- New documents indicate the public service considered at least 20 organizations to work on the Canada Student Service Grant (CSSG), including the United Way and the Canadian Red Cross, before concluding that WE Charity was the best fit.
However, many of these organizations say they were never actually contacted about the program itself.
The new documents, which were given to the House of Commons finance committee on Monday, explain that public servants with Employment and Social Development Canada made calls to multiple organizations in mid-April, including the Boys and Girls Club of Canada, the YMCA and 4-H Canada.
Other organizations, including the Canadian Red Cross, United Way, and Volunteer Canada, were "assessed" to administer the program, though the documents do not indicate what that assessment entailed or how a decision was made.
Despite being considered to deliver this program, many of these groups say they were never specifically contacted about the CSSG — and at least one of them, the YMCA, asserted that it was capable of delivering the program.
"At no point did the government contact YMCA Canada about delivering that program," Peter Dinsdale, president and CEO of YMCA Canada, told CTV News in an interview.
He added that his organization "absolutely" would have been capable of administering the program. However, he noted that COVID-19 has presented new challenges for YMCA Canada.
"It would have been tough given the state of YMCAs across the country, given the impact of COVID — really fighting for basic survival," Dinsdale said.
"In normal times, (this) 100 per cent would have been something we could have done."
Dindsale added that he hasn’t heard from the government since they cancelled the WE Charity contract and decided to allow the public service to deliver the grant.
In addition to YMCA Canada, the Canadian Wildlife Federation, United Way, Chantiers Jeunesse, 4H Canada, and the Boys and Girls Clubs of Canada all said the government never contacted them about the CSSG — despite all of the organizations' names appearing on the government's list of groups it considered to deliver the program.
Colleges and Institutes Canada, whose name also appears on the list, did confirm that it was approached about the program.
The question of whether other organizations were capable of administering the program is a key one in the WE Charity controversy. After granting WE Charity the now-cancelled sole-source contract, Prime Minister Justin Trudeau had said that the public service "determined that the WE organization was the only one that could deliver that program as ambitious as it was this summer."
However, that assertion came under scrutiny as Trudeau's ties to WE Charity were revealed. His mother, brother and wife had all been paid to speak at WE Charity events, while Finance Minister Bill Morneau’s daughter Clare has spoken at WE events, and his daughter Grace is currently employed by WE Charity.
The ethics commissioner is now investigating whether either Trudeau or Morneau breached the Conflict of Interest Act in relation to the decision to award WE Charity the contract. Both have issued apologies for not removing themselves from conversations about the now-cancelled decision to grant WE Charity the student volunteer program, given their personal connections to the organization.
On the same day Trudeau apologized for not recusing himself from the discussions, he continued to emphasize WE's unique ability to administer the program.
"The amount in the contract to WE was about $20 million for delivery of thousands – tens of thousands of youth placements across the country. They are the ones that have the network that was able to do that quickly," Trudeau said during a press conference on July 13.
"That was the recommendation by the professional public service."
Rachel Wernick, an assistant deputy minister with Employment and Social Development Canada, said she was the one behind the recommendation that WE Charity be the one to administer the program. Speaking to the finance committee on July 16, she noted that while other organizations were indeed considered, WE Charity emerged as the front-runner.
"In our assessment [of other organizations], we were unable to identify a single organization that adequately met the need for broad geographic reach, technological capacity and experience working with youth, particularly youth from underserved communities," Wernick told the committee.
She also noted that while WE had sent her a proposal regarding a program to help students, no other organization had done so — though no call for proposals was put out.
During the same July 16 meeting, Paula Speevak, the president and CEO of Volunteer Canada — one of the organizations public servants had "assessed" to administer the program — also testified. She said there are "many organizations" that have different areas of expertise related to the CSSG.
When asked about whether WE Charity was uniquely suited to administer the program, she said "there are many organizations in the sector that have some of the experience and expertise that could be required for that type of program."
While she did not outright say whether her organization could have administer the program on its own, she did say they had "been involved in a number of large-scale projects" carried out in collaboration with others.
Speevak also testified that WE Charity, after having won the contract, approached Volunteer Canada to ask them for help with program. She said that after raising concerns about the nature of the program — particularly with the fact that it would pay volunteers less than minimum wage, they informed WE Charity they would "not be working with them on the program."
While Wernick testified that Volunteer Canada was considered for the administration of the program, Speevak said that her organization was never specifically approached about the program and learned about its existence when the prime minister publicly announced the grant on April 22 — the same day WE Charity co-founder Craig Kielburger sent Wernick a detailed, unsolicited pitch for the program.
Speaking at the committee, Speevak was asked if she knew what Wernick could have meant by this consideration if the Volunteer Canada had never actually been approached prior to the program's announcement.
"No, I don't know. I don't know what happened with us," Speevak replied.
FUNDING AGREEMENT ONLY EARMARKED $543 MILLION
Despite the prime minister's initial announcement that the CSSG would be worth $912 million, the funding agreement with the WE Charity Foundation of Canada only detailed funding worth a maximum of $543.5 million — a little over half of the initially reported cost.
Of that amount, $500 million was earmarked to be disbursed directly to students eligible for the program. The other $43 million was for the WE organization to run the program itself.
While the document breaking down the agreement does not account for the hundreds of millions of dollars in absent funds, testimony from Ian Shugart, clerk of the Privy Council, helps to shine a light on where the rest of the money was hiding.
Speaking to the finance committee last week, Shugart said the $543 million was simply the first portion of the money. His comments echo what Wernick had also said in her testimony, which was that the amount of funding allocated — up to $912 million — would be dependent on the interest in the program.
"This is a common practice in contribution agreements. Additional payments would not be made until there was proof of uptake and the desired results were being achieved," Wernick said.
With files from CTV National News' Annie Bergeron-Oliver, CTV News' Michel Boyer and The Canadian Press
www.ctvnews.ca/politics/feds-considered-other-groups-before-we-deal-but-most-were-never-told-about-program
WE Charity Moved Millions To Private Kielburger Company
The idea that WE Charity was uniquely capable of executing the government’s $912m student volunteer program is challenged by an analysis of their audited financial statements by Charity Intelligence (CI), an independent charity watchdog group that helps donors “give intelligently and have impact with their generosity.”
CI’s legitimacy as a neutral authority on the charitable sector was recognized by none other than WE Charity itself, who previously used its CI rating to challenge Canadaland’s investigation.
“The information shared by Canadaland in its questioning about budgeting, data and numbers is incorrect….Charity Intelligence Canada awarded WE Charity a perfect four-star rating.”
When the pandemic began, WE Charity promptly laid off the majority of its workforce. Media reports assumed that this was a direct result of COVID-19, with its obvious impacts on donations and live events.
But in an interview with Canadaland, CI’s Managing Director Kate Bahen shares information from WE’s own audited financial statements that tells a different story – one of an organization that appeared to already be in crisis and making strange financial transactions when COVID hit, to anyone who bothered to look.
***
Jesse Brown: Kate, what was the first inkling you had that all was not perfect with WE Charity?
Kate Behan: I’m glad that people wave those star ratings around. But when you scratch beneath the veneer, there were lots of red flags. I hope that donors would read what was actually written in the text.
J: Your practice is based on numbers. It’s based on going through their audited financials line by line. What is it in their audited financial statements that raised concerns for you?
K: You could see the real estate holdings right there on the balance sheet. You could see the properties. This wasn’t a charity that had a lot of cash…It was investing heavily in real estate. The concern was also the leverage.
When you build a hospice, when you build a homeless shelter, you will go into debt very often and you will have a long term mortgage with regularly scheduled payments. But all of WE Charity’s debt was short-term, revolving, demand loans, at the beck and call of the banks. But it was the amount of debt on these properties. And it was always changing. So we always looked at the debt levels.
And then in 2018, the auditor flagged for the first time that WE Charity was in breach of its bank covenants. That is a massive, massive red flag. I have never seen that on any other charity in its audited financial statements.
source: WE Charity 2018 audited financials
J: For those of us who are less financially literate, when you say they’re in breach of their bank covenants — they’re racking up big debt to the bank while they’re buying major pieces of property. Am I getting that right?
K: It’s leveraged, they’re not using cash.
Some people live a certain lifestyle and you only ever see one side of the balance sheet. You don’t see how much debt that person has. WE Charity had the big offices, had the Global Learning Center, had all the assets, properties on Queen Street, but these were all backed — its lending practices were getting close to the max. Kind of like your credit card. You know, if you’ve got a credit card limit of ten thousand dollars, these guys were always at nine thousand five hundred. It was always pushing, pushing the limits.
So it was you know, [they] have to go to the bank every year and renegotiate this loan. God forbid the bank says ‘no’ this year. It’s kind of like a high wire act. It just isn’t seen in charities. So WE is different on so many fronts.
J: Your analogy to a soup kitchen or a hospice — those are facilities that directly do charitable work. The Toronto SUN’s Brian Lilley reported that WE quickly acquired $38.7m in Toronto real estate. How much money were they spending each year on their actual charitable works instead of on their headquarters and things like that?
K: That’s not disclosed. So I don’t see that. Let’s say that they bought a building on Queen Street for three million dollars to help children in Ethiopia, and they declare that the property is for that overseas work. Well, we are analysts, not auditors.
J: Any other [concerns]?
K: Related party transactions. So (the for-profit company) ME to WE is related to WE Charity by the two founders, Craig and Marc Kielburger. What ME to WE was giving to WE Charity and what WE Charity was paying ME to WE is a related [party] transaction and it needs to be reported. There’s a professional obligation by the auditors to report those.
It wasn’t just ME to WE, it’s very convoluted between holding companies and subsidiaries. It just didn’t make any sense.
In 2016, there was the WE 365 app and teachers were told that if you get kids to download this app, for every download a child will get vaccinations.
But the app didn’t work and it was glitchy. And, now if you go to the App Store and try and download it, there is no such thing as WE 365 to download.
But, you know, it was sold to WE Charity [by WE 365] for one dollar and all the debts incurred in creating this app that doesn’t exist anymore [now belonged to WE Charity], which is just bizarre.
J: That’s significant.
K: No, it’s not! We’re just talking about a $265,000 transaction at a $60m charity. Let’s focus on the $4.9m of debt that WE Charity had to pay the banks in May 2020. And it’s got another $4.3m due at the end of October. So let’s focus on the big numbers.
J: Ok, let’s focus on them. Were those dates determined before the pandemic? Were they in that kind of financial trouble before COVID?
K: Yes! And that’s what I’ve been sort of jumping up and down on the government’s due diligence. Before you give them an agreement to distribute $912m dollars, look at the board of directors.
Did WE Charity inform the government that its board had resigned or was replaced just weeks before, and that there was a gap in governance and oversight at the charity?
And if you read the audited financial statements, there it is in black and white, WE Charity is in breach of its bank covenants. Oh and by the way — it has no board.
J: Everything you’ve said so far might describe an organization that had a folly with an app that didn’t work out, that maybe got overambitious with its spending on properties. But that doesn’t really explain the other side of this, which is that money was flowing from charity to private company, in the opposite direction that it was supposed to.
K: The backwash. ME to WE backwash.
J: You have been public that in 2019, the same year that found them in breach [with the bank], that same year when they needed money, seven percent of all WE Charity’s revenue flowed to their privately held company.
K: That had grown. Before, it was one percent, two percent. What you see is them ramp up in fiscal 2018 when eight percent of WE Charity’s total revenues are going into the private business and in 2019, seven percent. And you’re dealing with a 60 million dollar charity here, so we’re not talking chump change.
source: WE Charity 2019 audited financials
J: Kate, people have said to me there’s nothing to see here. Sometimes a charity has to buy a few things from its related business. That’s true, isn’t it?
K: Yes.
J: So what’s wrong with this?
K: It’s the magnitude. Some private corporations play a little hard with their charities and say, you know, ‘we want you to pay the going rate’ and all the rest of it. But it’s [typically] a few hundred thousand dollars on a six million dollar charity. It’s not like this.
J: Have you ever seen this level of backwash?
K: No.
J: You would think that in the year when all their debts are due, that would be the year when they need to keep that money in the charity. But instead, they’re flowing it into their private company.
K: Yes
WE Charity’s response:
In the most extreme and, frankly, inaccurate, calculations, if someone dismisses (i) removed all value from the purchase of ME to WE services; (ii) removes all in-kind contributions from ME to WE, then WE Charity has still received $1.3-million more from ME to WE over the last five years.
J: Their argument has been: If you look at this the right way, overall, the charity comes out on top. Overall, the charity is benefiting from this relationship. Is that true?In the most extreme and, frankly, inaccurate, calculations, if someone dismisses (i) removed all value from the purchase of ME to WE services; (ii) removes all in-kind contributions from ME to WE, then WE Charity has still received $1.3-million more from ME to WE over the last five years.
K: The level of disclosure in their audited financial statements does not allow me to verify that claim.
J: You don’t have the information you would need to say, ‘yeah, that looks right.’
K: What it does say in the audited financial statement is not that ME to WE “donates” to WE Charity but that ME to WE “contributes” to WE Charity.
J: What’s the difference?
K: A donation is money. A contribution can be time, money or goods.
J: So when the WE Charity pays the Kielburgers’ private company, they pay in cash. But when their private company pays the charity, it’s a mixture of money, time and other benefits — and we don’t know the mix. Is that correct?
K: That’s correct.
J: If WE’s auditor were to dig down on that, you might find that everything’s fine. That in fact, it is cash going back to the charity. Or you might find that there’s no money or very little.
K: KRP have audited the books of WE Charity since these teenagers from Thornhill began over 25 years ago. It specializes in tax and small businesses. I believe WE Charity is the only charity it audits.
J: Well, that is weird.
K: It’s unsettling.
J: Back to the board of directors. WE has said the former board members were almost done their 5-year terms, and WE wanted a refresh. Is that not a credible explanation?
K: If a charity was to take the strategic decision to radically replace its entire governance structure, that needs to be signaled to donors and corporate sponsors well ahead. That needs to be posted on a web site. Everybody needs to know what’s going on, so that it isn’t a surprise that you find out on Twitter that the chairman of the board resigned in March…and since the chair of their board resigned, that doesn’t jibe with their story.
So you have an unprecedented turnover in governance that was not signaled.
When you have a scandal or a crisis at an organization, it’s the chairman that steps up and testifies in front of Congress. It’s the board chair who steps up and takes the mike.
And now we go into a crisis with a rookie slate of directors.
Almost all of the board of directors of WE Charity in Canada and the US) resigned or was replaced in March 2020. https://t.co/jtKInVhNa0
— Michelle Douglas (@MDouglas_YOW) June 29, 2020
J: The new board of directors, as I understand them, have long relationships with the Kielburgers. The new chair of the board, Greg Rogers, was Marc Kielburger’s high school teacher. — Michelle Douglas (@MDouglas_YOW) June 29, 2020
K: It’s a mismatch.
J: Did something happen for this sudden turnover in the board? When I look at all of these things together — not only do they have all this debt that’s coming due. At the same time, they’re flowing money out of the charity, into their private company. And then the board leaves. Do those all seem to you like discrete and unrelated events?
K: I guess it’s a compilation. Jesse, it’s just too many things.
***
www.canadalandshow.com/we-charity-was-in-financial-trouble-before-covid-says-charity-watchdog/
A ten year old child could have googled WE and come back with exactly the same amount of dirt on the charity.
YET, no one................NO ONE in the entire liberal government was able to find a single red flag.
Edit to add: For me, considering the enormous amount of money involved, this borders on criminal malfeasance.
YET, no one................NO ONE in the entire liberal government was able to find a single red flag.
Edit to add: For me, considering the enormous amount of money involved, this borders on criminal malfeasance.
Liberals being liberal , that’s what they do .WE Charity Moved Millions To Private Kielburger Company
The idea that WE Charity was uniquely capable of executing the government’s $912m student volunteer program is challenged by an analysis of their audited financial statements by Charity Intelligence (CI), an independent charity watchdog group that helps donors “give intelligently and have impact with their generosity.”
CI’s legitimacy as a neutral authority on the charitable sector was recognized by none other than WE Charity itself, who previously used its CI rating to challenge Canadaland’s investigation.“The information shared by Canadaland in its questioning about budgeting, data and numbers is incorrect….Charity Intelligence Canada awarded WE Charity a perfect four-star rating.”When the pandemic began, WE Charity promptly laid off the majority of its workforce. Media reports assumed that this was a direct result of COVID-19, with its obvious impacts on donations and live events.
But in an interview with Canadaland, CI’s Managing Director Kate Bahen shares information from WE’s own audited financial statements that tells a different story – one of an organization that appeared to already be in crisis and making strange financial transactions when COVID hit, to anyone who bothered to look.
***
Jesse Brown: Kate, what was the first inkling you had that all was not perfect with WE Charity?
Kate Behan: I’m glad that people wave those star ratings around. But when you scratch beneath the veneer, there were lots of red flags. I hope that donors would read what was actually written in the text.
J: Your practice is based on numbers. It’s based on going through their audited financials line by line. What is it in their audited financial statements that raised concerns for you?
K: You could see the real estate holdings right there on the balance sheet. You could see the properties. This wasn’t a charity that had a lot of cash…It was investing heavily in real estate. The concern was also the leverage.
When you build a hospice, when you build a homeless shelter, you will go into debt very often and you will have a long term mortgage with regularly scheduled payments. But all of WE Charity’s debt was short-term, revolving, demand loans, at the beck and call of the banks. But it was the amount of debt on these properties. And it was always changing. So we always looked at the debt levels.
And then in 2018, the auditor flagged for the first time that WE Charity was in breach of its bank covenants. That is a massive, massive red flag. I have never seen that on any other charity in its audited financial statements.
source: WE Charity 2018 audited financialssource: WE Charity 2019 audited financials
J: For those of us who are less financially literate, when you say they’re in breach of their bank covenants — they’re racking up big debt to the bank while they’re buying major pieces of property. Am I getting that right?
K: It’s leveraged, they’re not using cash.
Some people live a certain lifestyle and you only ever see one side of the balance sheet. You don’t see how much debt that person has. WE Charity had the big offices, had the Global Learning Center, had all the assets, properties on Queen Street, but these were all backed — its lending practices were getting close to the max. Kind of like your credit card. You know, if you’ve got a credit card limit of ten thousand dollars, these guys were always at nine thousand five hundred. It was always pushing, pushing the limits.
So it was you know, [they] have to go to the bank every year and renegotiate this loan. God forbid the bank says ‘no’ this year. It’s kind of like a high wire act. It just isn’t seen in charities. So WE is different on so many fronts.
J: Your analogy to a soup kitchen or a hospice — those are facilities that directly do charitable work. The Toronto SUN’s Brian Lilley reported that WE quickly acquired $38.7m in Toronto real estate. How much money were they spending each year on their actual charitable works instead of on their headquarters and things like that?
K: That’s not disclosed. So I don’t see that. Let’s say that they bought a building on Queen Street for three million dollars to help children in Ethiopia, and they declare that the property is for that overseas work. Well, we are analysts, not auditors.
J: Any other [concerns]?
K: Related party transactions. So (the for-profit company) ME to WE is related to WE Charity by the two founders, Craig and Marc Kielburger. What ME to WE was giving to WE Charity and what WE Charity was paying ME to WE is a related [party] transaction and it needs to be reported. There’s a professional obligation by the auditors to report those.
It wasn’t just ME to WE, it’s very convoluted between holding companies and subsidiaries. It just didn’t make any sense.
In 2016, there was the WE 365 app and teachers were told that if you get kids to download this app, for every download a child will get vaccinations.
But the app didn’t work and it was glitchy. And, now if you go to the App Store and try and download it, there is no such thing as WE 365 to download.
But, you know, it was sold to WE Charity [by WE 365] for one dollar and all the debts incurred in creating this app that doesn’t exist anymore [now belonged to WE Charity], which is just bizarre.
J: That’s significant.
K: No, it’s not! We’re just talking about a $265,000 transaction at a $60m charity. Let’s focus on the $4.9m of debt that WE Charity had to pay the banks in May 2020. And it’s got another $4.3m due at the end of October. So let’s focus on the big numbers.
J: Ok, let’s focus on them. Were those dates determined before the pandemic? Were they in that kind of financial trouble before COVID?
K: Yes! And that’s what I’ve been sort of jumping up and down on the government’s due diligence. Before you give them an agreement to distribute $912m dollars, look at the board of directors.
Did WE Charity inform the government that its board had resigned or was replaced just weeks before, and that there was a gap in governance and oversight at the charity?
And if you read the audited financial statements, there it is in black and white, WE Charity is in breach of its bank covenants. Oh and by the way — it has no board.
J: Everything you’ve said so far might describe an organization that had a folly with an app that didn’t work out, that maybe got overambitious with its spending on properties. But that doesn’t really explain the other side of this, which is that money was flowing from charity to private company, in the opposite direction that it was supposed to.
K: The backwash. ME to WE backwash.
J: You have been public that in 2019, the same year that found them in breach [with the bank], that same year when they needed money, seven percent of all WE Charity’s revenue flowed to their privately held company.
K: That had grown. Before, it was one percent, two percent. What you see is them ramp up in fiscal 2018 when eight percent of WE Charity’s total revenues are going into the private business and in 2019, seven percent. And you’re dealing with a 60 million dollar charity here, so we’re not talking chump change.
source: WE Charity 2019 audited financials
J: Kate, people have said to me there’s nothing to see here. Sometimes a charity has to buy a few things from its related business. That’s true, isn’t it?
K: Yes.
J: So what’s wrong with this?
K: It’s the magnitude. Some private corporations play a little hard with their charities and say, you know, ‘we want you to pay the going rate’ and all the rest of it. But it’s [typically] a few hundred thousand dollars on a six million dollar charity. It’s not like this.
J: Have you ever seen this level of backwash?
K: No.
J: You would think that in the year when all their debts are due, that would be the year when they need to keep that money in the charity. But instead, they’re flowing it into their private company.
K: YesWE Charity’s response:J: Their argument has been: If you look at this the right way, overall, the charity comes out on top. Overall, the charity is benefiting from this relationship. Is that true?
In the most extreme and, frankly, inaccurate, calculations, if someone dismisses (i) removed all value from the purchase of ME to WE services; (ii) removes all in-kind contributions from ME to WE, then WE Charity has still received $1.3-million more from ME to WE over the last five years.
K: The level of disclosure in their audited financial statements does not allow me to verify that claim.
J: You don’t have the information you would need to say, ‘yeah, that looks right.’
K: What it does say in the audited financial statement is not that ME to WE “donates” to WE Charity but that ME to WE “contributes” to WE Charity.
J: What’s the difference?
K: A donation is money. A contribution can be time, money or goods.
J: So when the WE Charity pays the Kielburgers’ private company, they pay in cash. But when their private company pays the charity, it’s a mixture of money, time and other benefits — and we don’t know the mix. Is that correct?
K: That’s correct.
J: If WE’s auditor were to dig down on that, you might find that everything’s fine. That in fact, it is cash going back to the charity. Or you might find that there’s no money or very little.
K: KRP have audited the books of WE Charity since these teenagers from Thornhill began over 25 years ago. It specializes in tax and small businesses. I believe WE Charity is the only charity it audits.
J: Well, that is weird.
K: It’s unsettling.
J: Back to the board of directors. WE has said the former board members were almost done their 5-year terms, and WE wanted a refresh. Is that not a credible explanation?
K: If a charity was to take the strategic decision to radically replace its entire governance structure, that needs to be signaled to donors and corporate sponsors well ahead. That needs to be posted on a web site. Everybody needs to know what’s going on, so that it isn’t a surprise that you find out on Twitter that the chairman of the board resigned in March…and since the chair of their board resigned, that doesn’t jibe with their story.
So you have an unprecedented turnover in governance that was not signaled.
When you have a scandal or a crisis at an organization, it’s the chairman that steps up and testifies in front of Congress. It’s the board chair who steps up and takes the mike.
And now we go into a crisis with a rookie slate of directors.Almost all of the board of directors of WE Charity in Canada and the US) resigned or was replaced in March 2020. https://t.co/jtKInVhNa0J: The new board of directors, as I understand them, have long relationships with the Kielburgers. The new chair of the board, Greg Rogers, was Marc Kielburger’s high school teacher.
— Michelle Douglas (@MDouglas_YOW) June 29, 2020
K: It’s a mismatch.
J: Did something happen for this sudden turnover in the board? When I look at all of these things together — not only do they have all this debt that’s coming due. At the same time, they’re flowing money out of the charity, into their private company. And then the board leaves. Do those all seem to you like discrete and unrelated events?
K: I guess it’s a compilation. Jesse, it’s just too many things.
***
www.canadalandshow.com/we-charity-was-in-financial-trouble-before-covid-says-charity-watchdog/
How much where the Families of these conservatives paid by WE? Where & when did these conservatives take their WE ‘Complimentary’ vacations in exchange for the Gov’t donated ‘millions upon millions’? I’m guessing that’s the difference....
I'm guessing we'll find out how many of the conservatives were paid by WE in due course.
R.B. Bennett testified before the special committee on March 3, 1932, responding to allegations of misuse of funds from the Canadian treasury. This was while he was the Conservative Leader & the Canadian PM. Supposedly the 'misuse of funds' was the taxpayers getting to pay for his sisters honeymoon during the depression which he denied. Maybe he did & maybe he didn't...but there was smoke enough for this committee to happen. It wasn't labelled an "Ethic's Committee" but....I'm assuming it's function was the same.