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WE Charity agreed to run student grant program as ‘favour’ to Canada: Kielburgers

WATCH: The House of Commons finance committee hears testimony into the WE Charity scandal.

The founders of the controversial WE Charity, Craig and Marc Kielburger, defended what they described as the good intentions behind a sole-sourced contract for their group to administer a federal student service grant program worth nearly a billion dollars.

Craig Kielburger also billed the willingness of the group to run the program as “a favour we were doing to be helpful to Canada.”

Kielburger brothers testify, defending WE, denying financial trouble
Kielburger brothers testify, defending WE, denying financial trouble

The two spoke Tuesday as part of House of Commons finance committee hearings into the WE Charity scandal, which is working to determine how an organization with close financial ties to prominent members of the government received a sole-sourced contract to run the Canada Student Service Grant.

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READ MORE: WE Charity grant agreement planned to spend roughly half of promised amount, documents show

Administering that program would have seen the organization receive some $43 million.

It has already received roughly $30 million of that but says it will repay the amount in full.

The brothers said that money would be to cover expenses incurred in setting up the program and not as a benefit to themselves and their organization. They added that by returning the money they have received so far, the group will be out roughly $5 million.

“Some have suggested that WE Charity was in dire financial straits prior to the CSSG and that somehow motivated our actions. It simply isn’t true,” said Craig Kielburger.

“Because, like many Canadian nonprofits and businesses, we had already taken difficult actions to adjust staff numbers and pivot our programs to the new realities of COVID.”

“As per the contribution agreement, WE Charity would only be reimbursed its costs to build and administer the program,” he also said.

“To be clear, there was no financial benefit for the charity. WE Charity would not have received any financial gain from the CSSG program and it is incorrect to say otherwise.”

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READ MORE: A timeline of key events in the WE Charity, Trudeau controversy

Former WE board chair Michelle Douglas also testified Tuesday and said in her opening statement that WE co-founder Craig Kielburger asked her to resign on March 25 after she and other board members asked WE executives to hand over financial documents to justify mass layoffs during the coronavirus pandemic.

“I resigned because I could not do my job. I could not discharge my governance duties,” she said. “It was our view that you could not fire hundreds of people without very strong demonstrable evidence and even then should explore mitigation measures to save jobs.

“Instead, the executive team were dismissing employees with great speed, and in large numbers.”

She detailed a dramatic phone call on March 23 where she asked that WE executives turn over financial statements

“I demanded that the executive produce those records,” Douglas said. “I’ll simply say that the call was abruptly concluded.”

Former WE Charity board ‘always understood’ speakers were not paid for WE Day: Douglas
Former WE Charity board ‘always understood’ speakers were not paid for WE Day: Douglas

She also said it was understood by board members that “speakers were not paid by the charity or related organizations to speak at WE Days.”

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That appears to stand in contrast to the reports in recent weeks that the WE Charity paid out hundreds of thousands of dollars in speaking fees to members of the Trudeau family.

Douglas, a former human-rights activist and former military member, also said that WE board members had concerns with the newly created WE Charity Foundation.

Global News first reported the CSSG agreement was with a separate entity called, WE Charity Foundation, which had only received charity status in 2019 and whose stated purpose was to “hold real estate.”

READ MORE: Trudeau gov. contract for $912M student program was with WE Charity’s real estate holding foundation

“The board was never satisfied that the operation of this foundation was in the best interest of the charity or its various stakeholders, to the best of my knowledge it was not in operation as of my departure from the board,” Douglas said.

“We didn’t have enough information,” she said. “Frankly thinking about all the youth who had done fundraising and wanted to understand in a matter that was crystal clear why such a foundation would exist.

“Ultimately there was no resolution.”

WE Charity has previously said it decided to make the Foundation the “contracting party” with the government on the advice of its lawyers due to concerns about legal liabilities stemming from the federal student program.

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“The use of multiple corporate entities to isolate liabilities for particular projects is not uncommon,” the charity said in a statement.

WE Charity scandal: Global News story prompts heated debate in the House of Commons
WE Charity scandal: Global News story prompts heated debate in the House of Commons

The Kielburgers were pressed repeatedly during the hearing on that corporate structure and insisted that they were using the WE Charity Foundation because the government contract required them to assume full legal liability for the program in order to administer it.

“The government of Canada asked us to assume massive liability,” said Marc Kielburger, adding the use of the entity was intended to “limit liability.”

COMMENTARY: Justin Trudeau is WE-deep in trouble

The brothers also defended their decisions not to register as lobbyists and insisted their organization has not met the legal definition of lobbying even though it has paid hundreds of thousands of dollars in speaking fees to Trudeau’s family members and hired Morneau’s daughter.

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“These things, I don’t believe, are actually defined as lobbying,” said Marc Kielburger.

Craig Kielburger added that Saskatchewan Premier Scott Moe also came and visited the organization’s facilities in Kenya over the winter, and said NDP MP Charlie Angus’s children have taken part in work trips run by the group in Nicaragua.

He raised the participation of Angus’s children when questioned by the NDP MP about why MPs at the committee should believe that the brothers are being trustworthy and accountable, in particular light of the fact they have not registered as lobbyists.

“You trusted us with your own children. I hope you trust us now,” Craig Kielburger said.

“I don’t trust you now,” Angus said.

He suggested the organization has changed since its earlier days and that they made a practice of “buying the name” by paying people like Margaret and Alexandre Trudeau to attend their events as part of their strategy for fundraising with donors.

WE scandal: Co-founders Craig, Marc Kielburger defend taking on student grant program
WE scandal: Co-founders Craig, Marc Kielburger defend taking on student grant program

WE Charity had previously confirmed the prime minister’s mother Margaret Trudeau was paid about $250,000 for speaking at 28 events by Me to WE, the charity’s for-profit arm, while his brother Alexandre (often referred to as Sacha) spoke at eight events and received about $32,000.

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Craig Kielburger was asked repeatedly by MPs what qualifications those individuals had as speakers apart from their high-profile names and connections.

He said that it was the “lived experience” that made individuals like Margaret Trudeau deemed a guest worth paying, and insisted the payments were made not for their time on stage at WE Day events but rather for what the brothers described as “auxiliary” events like receptions.

Craig and Marc Kielburger acknowledged that WE had also paid roughly $64,000 worth Margaret Trudeau’s and none of Alexandre’s expenses.

Sophie Gregoire Trudeau attended seven WE events over the course of three years and was reimbursed an average of $3,618 per event, according to the testimony.

Craig Kielburger said a full breakdown of costs would be made available following their testimony.

Global News reached out to WE Charity for comment, who said a statement would be made available later today on payments to the Trudeau family.

WE scandal: Who are Craig and Marc Kielburger?
WE scandal: Who are Craig and Marc Kielburger?