Trudeau did not break federal ethics rules in WE Charity scandal — but Morneau did: report

Prime Minister Justin Trudeau did not break federal ethics rules in what has become known as the WE Charity scandal — but his former finance minister, Bill Morneau, did.

Mario Dion, the conflict of interest and ethics commissioner, issued his reports into the conduct of both Trudeau and Morneau on Thursday and found that while Trudeau did not violate the rules, Morneau broke three provisions in the Conflict of Interest Act.

The reports, titled Trudeau III and Morneau II, mark the third time Trudeau has been investigated for accusations of breaking federal ethics rules since he became prime minister in 2015, and the second time for Morneau, who quit federal politics last year.

The first report looked at Trudeau’s vacation on the Aga Khan’s private Bahamian island, while the second probed accusations of political interference at the heart of the SNC-Lavalin scandal.

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The prime minister was found to have broken the rules on those first two occasions, but not in relation to his family’s ties to the WE Charity.

“There was no opportunity to further Mr. Trudeau’s own interests or those of his relatives from WE’s role as administrator of the CSSG or from its Social Entrepreneurship proposal,” Dion said.

The CSSG refers to the Canadian Student Service Grant, the now-cancelled $912-million student program the government had selected WE Charity to administer last summer.

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

Trudeau’s mother and brother have financial ties to WE Charity and have been paid to appear at its events. Sophie Gregoire-Trudeau has also appeared at events and received payment for doing so before the Liberals formed government in 2015.

She has also had tens of thousands of dollars in expenses reimbursed for her appearances.

Dion said he found no evidence those ties and Trudeau’s handling of the file violated the rules.

“I am satisfied that there was no opportunity to further Mr. Trudeau’s own interests or those of his relatives from WE’s role as administrator of the CSSG or from its Social Entrepreneurship proposal,” he wrote, noting that federal rules apply only to actual conflicts of interest, not the appearance of them.

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“In this regard, I determined that without an actual conflict of interest or a clear legislative prohibition against apparent conflicts of interest, I could not conclude that a contravention occurred.”

Yet Dion said Morneau’s ties to the controversial organization did break the rules.

Bill Morneau a ‘walking conflict of interest;’ Fife – Sep 13, 2020

Dion found that Morneau violated conflict of interest provisions on three specific aspects and that those findings were directly linked to the fact that Morneau’s relationship with WE Charity co-founder Craig Kielberger meets the definition of a “friend” under the rules.

Public office holders are prohibited from making or participating in making decisions that they know or reasonably should know would further the private interests of themselves, their relatives or friends.

They are also deemed to be in conflicts of interest when they exercise their duties or powers in any way that “provides an opportunity to further their private interests or those of their relatives or friends or to improperly further another person’s private interests.”

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They also must recuse themselves from any matters where they would be in a conflict of interest.

READ MORE: Morneau says he’s made ‘significant’ WE Charity donations, just repaid $41K for trips

Dion said that Morneau broke all three of those rules and that WE Charity got “preferential” treatment.

“The examination found the relationship between Mr. Morneau and WE included an unusually high degree of involvement between their representatives and afforded WE unfettered access to the Office of the Minister of Finance, which amounted to preferential treatment,” Dion’s office said.

“Commissioner Dion also found that the preferential treatment was based on Mr. Morneau’s relationship with Mr. Craig Kielburger, the co-founder of WE.”

The report noted that Morneau “should have recused himself from discussions on these matters due to his friendship with Mr. Kielburger,” but did not do so.

READ MORE: Trudeau government has announced at least $5.5M in funding to WE Charity since 2015

Morneau resigned in August 2020 after coming under significant scrutiny for his handling of the file and his family’s ties to WE Charity. Those ties include what Morneau described last year as two “significant” financial donations worth tens of thousands of dollars made by his family to the organization..

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Both of those were worth $50,000 — one of those was made in June 2018 and one in June 2020.

That June 2020 donation came the same month that WE Charity was named as the administrators of the now-cancelled $900-million student grant program on June 25, 2020.

Morneau said last year during an appearance at the House of Commons finance committee that he had earlier on the same day as his testimony repaid $41,366 in expenses he said he had not realized his family incurred while accepting trips from WE Charity to visit its operations in Kenya and Ecuador.

Ministers are not allowed to accept sponsored travel under federal rules.

Morneau’s daughters also have ties to WE — including one who works in an administrative arm of the organization.

“The evidence makes clear that Mr. Morneau and Mr. Kielburger were more than passing professional acquaintances or simply members of the same broad social circle,” Dion stated in his report.

He pointed to several key indicators: invites to WE Day events were personally given by Kielburger to the entire Morneau family, while Kielburger wrote to Morneau more than once about the friendship between their families and praising his daughter’s participation in WE Day events.

“They addressed each other by their first names, even in correspondence relating to professional activities,” said Dion, noting Kielberger shared personal news like the birth of his child with Morneau, and that Morneau said he likely gave Kielburger a gift to mark the occasion.

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“Mr. Morneau also wanted to personally deliver news of funding approval to Mr. Kielburger. On at least one occasion, the families socialized together at the Morneau residence,” said Dion.

“All these indicators point towards a friendship.”

Dion noted while the appearance of a conflict of interest crossed the line into a real conflict of interest when Morneau was called upon to “make a decision that would provide an opportunity to further WE’s private interests,” and did not recuse himself.

It is unclear at this time whether Morneau will face penalties for breaking the rules.

Morneau reimburses $41,000 in unpaid bills to WE – Jul 22, 2020

More to come. 

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