Wednesday, December 14, 2016
Money began to rain on Trudeau Foundation once Justin took over Liberals, analysis shows
Last Monday, interim Conservative leader Rona Ambrose wrote to the conflict of interest and ethics commissioner and to the lobbying commissioner, asking them to investigate Liberal fundraising practices — and in particular, whether people might be using donations to the charitable Trudeau Foundation to gain influence with the government.
“Given that Prime Minister Trudeau is a former member of the Trudeau Foundation,” she wrote, “that his brother Alexandre Trudeau is a current member of the board of directors of the foundation, that the Minister of Industry appoints two directors of the Trudeau Foundation, and that the Foundation has two representatives of the Trudeau family, any efforts by Mr. Trudeau to use his position as Prime Minister to encourage donations may be a violation of the definition of a conflict of interest.”
A National Post analysis of the Trudeau Foundation’s public disclosures has found that gifts to the foundation have increased significantly since Justin Trudeau’s April 2013 election as leader of the Liberal Party of Canada. The amount of money contributed to the foundation by foreign donors has grown each year since Trudeau claimed the party’s leadership. Moreover, a significant proportion of the charity’s donors, directors and members have ties to companies and organizations that are actively lobbying the federal government.
Whether or not the foundation violates conflict-of-interest laws, its operations represent another challenge to the high ethical standard Trudeau has established for his government. The Open and Accountable Government guide, codified after Trudeau became prime minister in October 2015, specifies that when fundraising or dealing with lobbyists, “Ministers and Parliamentary Secretaries must avoid conflict of interest, the appearance of conflict of interest and situations that have the potential to involve conflicts of interest.”
Critics say the Trudeau family’s ongoing attachment to the Trudeau Foundation could violate those rules, since making a donation might help curry favour with the prime minister’s family. The National Post’s analysis confirms about 40 per cent of 108 donors, directors and members of the foundation since 2014 — or one in six, if academic institutions are excluded — have affiliations with organizations that currently lobby the government, which could indeed create the perception of a conflict.
The Trudeau Foundation hosts conferences on what it considers important public policy issues and grants scholarships in memory of Pierre Elliott Trudeau, the late former prime minister and Justin Trudeau’s father. Founded in 2001, it attracted controversy in its early years because it is largely funded by taxpayers’ money.
Industry Canada — not usually a source of funding for academic research in the social sciences and humanities — granted the foundation a $125 million endowment in 2002. The foundation’s net assets grew 1.2 per cent in fiscal year 2015, closing out the year at $150 million.
Critics raised concerns about public money being used to fund academic research into ideas championed by the late prime minister, especially when the Social Science and Humanities Research Council already gives out similar grants.
“People that might defend the Trudeau Foundation, would they defend a Harper foundation funding with tax money things that Stephen Harper liked? I don’t think so,” said Aaron Wudrick, federal director of the Canadian Taxpayers Federation. “And they’d be equally right.”
After the initial controversy, the foundation’s operations continued relatively peacefully over the next decade. But as Justin Trudeau’s political career advanced, his ties to the foundation became more problematic. He formally withdrew from involvement in the foundation’s affairs in December 2014, and Liberal Party of Canada spokesman Braeden Caley told the Post in an email that the party “has no relationship to the Pierre Elliott Trudeau Foundation, and Mr. Trudeau has no involvement with it.”
However, Justin Trudeau’s brother Alexandre and the Trudeaus’ close family friend Roy Heenan have been on the board since the foundation’s inception. The organization’s bylaws grant Justin Trudeau, Alexandre Trudeau and Heenan the right to have a say in the appointment of two directors, even though the prime minister no longer exercises that right. Correspondence between the foundation and prospective event sponsors shows the charity listed Justin Trudeau as a member in marketing materials as recently as September 2014, by which time he had been a sitting member of parliament for six years and leader of the Liberal Party for a year and a half.
Errol McGihon / PostmediaAlexandre Trudeau (L) with his brother Prime Minister Justin Trudeau, September 13, 2016
Since Trudeau became Liberal leader in April 2013, gifts to the foundation have increased significantly. Donations went from $172,211 in the 2014 fiscal year to $731,753 in 2016 — a four-fold increase. From 2008 to 2013, the foundation had no foreign donations, but it has brought in a growing amount of foreign money in 2014, 2015 and 2016. Foreign donations jumped from $53,000 in the 2014 fiscal year to $535,000 in 2016 — a ten-fold increase.
The majority of donors to the Trudeau Foundation also have ties to the foundation itself, with many directors, mentors and scholarship recipients making contributions. Anonymous donations made up less than three per cent of all gifts in 2015, according to information supplied by the foundation.
Many of the foundation’s donors, directors and members also have ties to corporate Canada and advocacy groups, organizations with an interest in influencing federal policy.
Patrick Pichette, a Canadian who until 2015 was senior vice-president and chief financial officer of Google, and who sits on Bombardier’s board of directors, is also a director of the Trudeau Foundation. Correspondence between Pichette and the Trudeau Foundation in 2014, released as part of an access-to-information request, shows he helped secure US$25,000 from Google for sponsorship of a Trudeau Foundation conference.
Google has lobbied federal officials 22 times since Justin Trudeau became prime minister. The company was under investigation by the Competition Bureau for alleged anti-competitive activities at the time Google made the donation in December 2014. The Competition Bureau concluded its investigation without charges last spring.
Lobbyists are required to file a report with the lobbying commissioner every time they interact with a federal official, regardless of whether the communication is a sit-down meeting or a brief phone call. Critics say enforcement is lax and it’s likely the record doesn’t fully capture all interactions between companies and the federal government. Nonetheless, those reports show a close relationship. Google only lobbied the Harper government seven times in 2015. Of the 22 times Google lobbied federal officials in 2016 two of those were with Justin Trudeau personally. In September, Google lobbied Justin Trudeau, his chief of staff Katie Telford and his principal secretary Gerald Butts.
Dario Ayala / PostmediaPatrick Pichette in 2011
Asked for comment on the perception of conflict of interest raised by the donation, Google spokesman Aaron Brindle responded with a brief emailed statement that did not address the issue. Brindle said the company supports many organizations dedicated to facilitating dialogue on public policy. “We will continue to support this important work,” he said.
Former NDP deputy leader Megan Leslie is another Trudeau Foundation director who donated in 2016. She is currently acting vice-president of oceans at World Wildlife Fund Canada, which has lobbied the federal government 29 times since Trudeau became Prime Minister.
In an emailed statement, WWF-Canada said Leslie’s donation to the foundation was not a large one — $10 per month. The conservation organization said its lobbying of the Trudeau government has been similar to its activity under previous administrations.
Some of Canada’s largest corporations — including Air Canada, BMO, Suncor and Resolute Forest Products — have sponsored Trudeau Foundation conferences since Justin Trudeau became Liberal leader. All those companies, which along with Google and Lafarge Canada account for half of all foundation event partners since 2014, are currently registered to lobby the federal government.
Megan Leslie in Halifax, September 2015
Asked for comment, Suncor, Resolute and Air Canada noted they all sponsored the 2014 conference before Justin Trudeau was elected Prime Minister, with Air Canada sponsoring the 2015 event as well. The theme of the 2014 conference was climate change, an area relevant to their industries. In an email, Resolute spokesman Seth Kursman said the company has not had any face-to-face meetings with anyone from the prime minister’s office. Disclosures filed with the lobbying commissioner show Resolute lobbied Jim Carr, minister of national resources, on March 22.
In addition to lobbyists, foreign donors have also been giving more to the foundation in recent years. Chinese national Bin Zhang, who made a $200,000 gift to the charity following a cash-for-access Liberal fundraiser with prime minister Justin Trudeau, has been the focus of heated debate in the House of Commons. The gift, which was first reported by the Globe and Mail, counted as a domestic donation, since it was made by a company registered in Canada.
Under Elections Canada rules, only Canadian citizens and permanent residents can make federal political donations, but foreigners with an interest in Canadian public policy are free to donate to the Trudeau Foundation. Foreign donations to the foundation have increased significantly in recent years.
The foundation attracted no foreign donations from 2008 to 2013, about $53,000 in 2014, $428,000 in 2015, and $535,000 in 2016. According to the charity, the Switzerland-based McCall MacBain Foundation has been responsible for the majority of the increase in foreign donations.
John McCall MacBain, a Canadian businessman, is a founder of the McCall MacBain Foundation and chairman of the Trudeau Foundation. MacBain is the 75th richest person in Canada and has a net worth of $1.37 billion, according to Canadian Business magazine.
He sold his global classified-advertising empire in 2006. Yellow Pages bought the Canadian branch, called Trader Canada, for $760 million. MacBain now lives in Switzerland but comes to Canada regularly to give money to universities and other education-related charities.
The $53,000 foreign donation in 2014 was a single contribution from the McCall MacBain Foundation, with the Switzerland-based foundation giving $428,000 in 2015 and Google accounting for the rest. The McCall MacBain Foundation donated $500,000 in 2016, with the remaining $35,000 coming from four Canadians affiliated with the Trudeau Foundation and living outside Canada, according to the foundation.
The McCall MacBain Foundation did not respond to multiple requests for comment asking why their donations increased and what, if any, contact they had with Trudeau family members, federal cabinet ministers, or other Liberal party members since donating to the Trudeau foundation.
In an email sent on behalf of the charity, Trudeau Foundation executive director Elise Comtois said the rapid growth in overall donations and sponsorships since 2014 can be explained by an increased focus on fundraising since that year, in an effort to make up for sluggish returns caused by historically low interest rates. The foundation’s tax returns show significant surpluses of more than $2 million in 2014 and 2015, but the charity said that surplus really only exists on paper. It can’t spend the money, Comtois said, without cashing in securities it would prefer not to sell, causing a cash shortfall of $1.2 million in 2015.
Mike DiBattista / Postmedia NetworkJohn MacBain in Niagara Falls
“Unrealized gain on investments are not ‘real money.’ They are simply an accounting treatment to reflect the market value of the investments,” Comtois said. “In the current historically low interest rate environment, the revenues earned by the endowment are not sufficient to cover the Foundation’s expenses.”
Kate Bahen, managing director of the Canadian charity research organization Charity Intelligence, disagreed with the foundation’s assertion that its surplus is not “real.” The charity’s total funding reserves have grown to about $150 million, more than enough to cover its funding commitments even if investment returns take a hit, she said.
“The last thing I would do now is embark on a new fundraising drive,” Bahen said in an email. “There is no financial need for donations if the Foundation holds its current course — which I believe is having good results. It would remove any risk of reputational damage from innuendo (about) those trying to curry favour with the current Trudeau government.”
The Trudeau Foundation did indeed hire a director of development in June 2015 to help ramp up its fundraising efforts. The same access-to-information request that included the correspondence between Google and the foundation shows the charity was courting sponsorships aggressively in 2014, creating what chief executive Morris Rosenberg called “a program of sponsorship opportunities inviting corporations to invest in the Foundation’s work.”
A chart attached to the package of marketing materials sent to Google on Sept. 4 2014 expanded on those sponsorship incentives, including a section labelled “Networking opportunities.” A gift of $50,000 or more entitled a sponsor to convene a private event for up to 25 people, with “key members of the Trudeau Foundation Society.” Justin Trudeau, who was Liberal leader at the time, was named along with his brother at the bottom of a list of foundation members.
Justin Tang / Canadian PressConservative MP Candice Bergen asks a question during Question Period in the House of Commons, in Ottawa on Thursday, Nov. 17, 2016
Comtois noted in the foundation’s statement that Justin Trudeau had not yet formally withdrawn from its affairs at the time the list was sent. “It is true that we offer sponsors this opportunity (to network), not just with regard to members and directors but also with regard to our scholars, fellows, and mentors. This said, Justin Trudeau has not attended a single Foundation event for 10 years or so.”
Candice Bergen, the Conservative house leader and a vocal critic in the House of Commons of perceived conflicts of interest related to the Trudeau Foundation, told the Post she was troubled by the fact the charity continued to list Justin Trudeau as a member in marketing materials to potential sponsors more than a year after he was elected Liberal leader.
“The now-Prime Minister has been listed on this foundation all the way into 2014 as a selling feature,” she said. “It would stand to reason that people now would be assuming that if they’re donating to this foundation that they will see a benefit of having access to people in government.”
Last Wednesday, the office of federal ethics commissioner Mary Dawson announced it is reviewing Conservative leader Ambrose’s complaint about possible ethical breaches by the Liberals, including Zhang’s donation to the Trudeau Foundation.
Duff Conacher, cofounder of the government accountability group Democracy Watch, said the prime minister should be concerned about avoiding any appearance of a conflict of interest, regardless of whether one actually exists. His family ties to the Trudeau Foundation undoubtedly create such an appearance, he said.
“I don’t think anyone can justifiably claim that it’s a coincidence that the donations have increased since he became leader and increased again since he became Prime Minister,” Conacher said. “The question that has to be asked is: Would Justin Trudeau be pleased or gratified by donations to the Trudeau foundation? And I think the answer is yes.”