Morneau’s office, Kielburgers described as ‘besties’ in newly released documents

PAUL WALDIE
PUBLISHED AUGUST 19, 2020

Co-founders of WE Charity Craig, left, and Marc Kielburger, right, arrive for WE Day California at the Forum in Inglewood, Calif., on April 25, 2019.
ROBYN BECK/AFP/GETTY IMAGES

Former finance minister Bill Morneau’s office was so close to the co-founders of WE Charity that his department referred to them as “besties” and Mr. Morneau pushed hard to ensure the charity administered the government’s $543.5-million volunteer program, newly released documents reveal.

The documents include 5,000 pages of internal memos, e-mails and handwritten notes made by officials as they scrambled to put together the Canada Student Service Grant in April and May. The program was supposed to pay students up to $5,000 for volunteer work over the summer. The government expected as many as 100,000 students to participate and WE Charity was in line to receive up to $43.5-million to cover expenses for administering the program. The charity pulled out on July 3, weeks after the program was announced, amid a growing controversy over WE’s close ties to Mr. Morneau and Prime Minister Justin Trudeau.
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Michelle Kovacevic, an associate deputy minister at finance, added in another email to officials that 'WE is connecting with my [minister]. They are all besties.'

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The documents portray the chummy relationship between WE co-founders – Craig and Marc Kielburger – and government ministers and bureaucrats. E-mails from Craig Kielburger to Mr. Morneau begin with “Hi Bill” and in one, Mr. Kielburger thanks the minister for a phone call about the volunteer program. “It was incredibly thoughtful of you to call,” Mr. Kielburger wrote Mr. Morneau on April 26. Youth Minister Bardish Chagger also had high praise for Mr. Kielburger and added in a memo on April 20: “I believe there is a lot of complementarity in our efforts.”

In another e-mail, Michelle Kovacevic, an assistant deputy minister at Finance, thanked departmental colleagues for “keeping the relationship with WE strong. I think this is the right organisation for a call to action for national service. They are pretty snazzy. Like me.” She added in another e-mail to officials that “WE is connecting with my [minister]. They are all besties.”
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In another email, Michelle Kovacevic thanked departmental colleagues for 'keeping the relationship with WE strong.'

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Rachel Wernick, a senior assistant deputy minister at Employment and Social Development Canada, which developed the volunteer program, held so many weekend phone calls with Craig Kielburger that he told her in an e-mail, “I embrace our Sunday phone calls.” In return, Ms. Wernick thanked Mr. Kielburger for his “thoughtful engagement.” In an e-mail to Marc Kielburger, she joked about him being late for a meeting because of a speaking engagement. “No rush if your speech runs a bit late (or you want to keep listening to all the applause),” she wrote.


Prime Minister Trudeau and WE Charity: The controversy explained

How WE got here: A timeline of the charity, the contract and the controversy

Mr. Morneau, who resigned as finance minister this week, and Mr. Trudeau have apologized for not recusing themselves from a cabinet meeting on May 22 when the program was approved. It was announced on June 25. Mr. Morneau later revealed that he and his family had taken trips with WE to Kenya and Ecuador. He also confirmed that his two daughters had ties to WE. Last month, Mr. Morneau paid WE $41,000 to cover the cost of the trips. Mr. Trudeau’s family also has close ties to WE and his mother, Margaret Trudeau, received $312,000 for speaking at 28 WE events.

The documents were released by the House of Commons finance committee, which is investigating the volunteer program and the WE contract. However, on Tuesday Mr. Trudeau prorogued Parliament until Sept. 23, which will suspend the committee’s work.
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Rachel Wernick, a senior assistant deputy minister at Employment and Social Development Canada, which developed the volunteer program, held many weekend phone calls with Craig Kielburger.

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The documents reveal that in early April, Craig Kielburger approached Mr. Morneau as well as Small Business Minister Mary Ng and Ms. Chagger about a $12-million Social Entrepreneurship Initiative that WE would run to encourage up to 8,000 young people to become engaged in voluntarism. Mr. Kielburger said the charity would leverage its network of corporate sponsors, including Royal Bank of Canada, Telus, KPMG and Microsoft, to provide mentorships. Participants would also take a course and receive a $500 grant to help set up a social enterprise along with a letter from Mr. Trudeau.

Officials contacted WE in late April to rework the idea so that it would fit into the national volunteer program the government was drafting at the time. On April 21, Mr. Morneau earmarked $900-million toward the volunteer program and approved WE’s social entrepreneurship venture. A few days later, his staff pressed officials at Employment and Social Development to pull the volunteer program together. Amitpal Singh, a policy adviser in the Department of Finance, said in an e-mail that Mr. Morneau was “concerned the government will drop the ball” on the idea.
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The documents portray the chummy relationship between WE co-founders – Craig and Marc Kielburger – and government ministers and bureaucrats.

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The social enterprise venture was eventually dropped, but WE’s role in the volunteer program intensified despite indications the charity had run into financial issues. In an e-mail on May 23, WE’s executive director Dalal Al Waheidi told Ms. Wernick that the COVID-19 pandemic had significantly affected the charity and that it had to suspend its travel service, which operates tours to countries such as Kenya and India, and halt its annual WE Day events for 18 months. As a result, she said the charity had to “significantly reduce our staffing numbers.” Ms. Al Waheidi did not say how many jobs were cut and she insisted that WE would still be able to deliver the volunteer program. The documents don’t include any follow-up from Ms. Wernick or any indication that bureaucrats examined WE’s operations more closely.




During testimony to the finance committee last month, WE Charity’s former chair, Michelle Douglas, indicated that the organization was embroiled in turmoil in late March. Ms. Douglas said she was asked to resign on March 25 by Craig Kielburger after she raised concerns about more than 200 layoffs and expressed discomfort at the lack of financial transparency. Several other directors were replaced in April. Craig Kielburger has said the board was fully informed of the financial situation and that changes to the board had been planned.
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In an email to Marc Kielburger Wernick joked about him being late for a meeting because of a speaking engagement.

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Officials also raised few questions about the WE Charity Foundation, which WE initially set up in 2019 to hold the organization's real estate assets. No assets were put into the foundation and it had no operations. It was repurposed for the volunteer program and the government contract to run the Student Service Grant was with the WE Charity Foundation, not WE Charity.

Sofia Marquez, who handled government relations at WE, told officials in an e-mail on May 26 that the foundation had been created to “receive, hold and disburse funds to other registered charities in the WE family for greater accounting ease and administrative simplicity.” The documents don’t indicate that there was any follow-up by government officials about why the contract was with the WE Charity Foundation.

Craig Kielburger told the finance committee last month that the foundation was used for the volunteer program to shield the charity from legal liability. Ms. Douglas told the committee that the board had “a number of concerns” about the foundation and did not understand its purpose.
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What appears to be messages between officials after the program is cancelled. Wernick starts to worry about her conduct.

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WE Charity did not immediately respond to a request for comment on Wednesday.

The documents show that some concerns were raised about the volunteer program. The charity Volunteer Canada refused to participate because it was “uncomfortable with the notion of providing a grant for volunteer work.” Some government officials also objected to one of WE’s volunteer proposals, which involved students writing and collecting recipes that were “easy to make” for seniors and front-line health care workers. The idea drew a rebuke from Ms. Wernick, who said in an e-mail to colleagues that it was “going to become the poster child of not being ‘quality’ – I have to say it doesn’t communicate well.”

Editor’s note: An earlier version of this story said documents revealed that Bill Morneau was so close to the co-founders of WE Charity that they were referred to as "besties." In fact, the documents refer to his office, not Mr. Morneau himself.