The so called "We Scandal" has been occupying the Opposition Parties and the media for some time because, you know, we are not living through a global pandemic. Then again, the Liberals have no one but themselves to blame. If they would just screw up their handling of the pandemic and its economic fallout the Opposition and the media would actually have something substantive with which to criticise them.
Oh well, we are stuck with WE.
I have largely been ignoring the whole thing but I did listen to the public servants who set it up because if we were going to hear facts it would be from them. They did not disappoint.
One fact that stood out was the deal with WE was set up using a Contribution Agreement (CA). That is a key fact. Grants and Contributions are the main avenues for governments to give money to companies and individuals. As a result there are a great number of rules and regulations around providing them.
So what is a grant and what is a contribution? A grant is the government giving money to a recipient after they have met some set eligibility requirements. If you meet the requirements, you receive the funds and there is no control over how you actually spend the funds. Think of grants to university students. You may apply for a grant to help with your tuition but once you receive it you buy a new top-of-the-line stereo system instead. (No that is not what I did with my first student grant in the '80s, during my first year of university)
Contributions are an agreement between the government and a person or organization where the government agrees to provide funds to assist recipients in achieving objectives that align with the priorities of the government. There are eligibility requirements. If the recipient meets them they can then gain access to the funds. How the funds are spent are closely monitored by the government. CAs are legal agreements between the recipient and the Government of Canada.
The key to a Contribution Agreement is the recipient is not given any of the money upfront.
What did this mean for WE? Simple, WE signed a Contribution Agreement with the government to distribute funds to students. The amount was around $900 million but that money was not transferred to WE. It was set aside by the government so that WE could draw down from it to achieve the objectives of the program they were to administer.
Normally, when a recipient enters into a CA they must first prove that they have sufficient funds to achieve the project objectives without government assistance. The CA then stipulates how much government assistance the recipient can expect. Usually it is around 50% of the total. Example: if the recipient has a project that will cost $1 million they can ask for 50% of that from the government. In order to receive this money, however, the recipient actually has to spend the money and then make claims to the government, providing all of the necessary financial documentation, in order to be reimbursed some of their expenses. Usually those expenses include administrative fees, which are usually between 8 and 10% of the original amount and which are not included in the original. So using my example: the recipient would sign a CA for 50% of a $1 million project, for which they would be able to claim $550,000. If a recipient submits a claim for work not agreed to in the CA then it is rejected and the recipient is not reimbursed any funds for that work.
For the WE program it would be unreasonable for the government to expect the charity to have $900 million. As a result the CA was set up to provide WE with a series of cash advances. This does not mean the government just cut them a check. In order to receive the cash advances WE would have had to request them, providing a highly detailed plan of how they would use the cash advance. Once the plan was approved and they received the funds they would then have to track how they spent the funds and submit that to the government. The government would then review those expenses to be certain that they used the money as agreed upon in the CA and the documentation submitted to request the advance. If it was found that they did not use it as agreed upon THEY WOULD BE REQUIRED TO PAY THE MONEY BACK. The cash advances would never be for the whole amount available. WE would have had to submit several cash advance requests over the life of the program in order to receive the funds.
All CAs include plans for auditing how the funds are used by the recipient. If an audit finds that the recipient did not use some of the funds as agreed upon in the CA the recipient WOULD BE REQUIRED TO PAY THAT MONEY BACK. And trust me, if you owe the government money as a result of contravening a CA they will be ruthless in collecting it.
This is a key point because regardless of the relationship of the WE Charity to any government official, or to members of their family, they would not risk putting themselves on the hook for owing the government money by using funds in a way that contravened a CA.
Or to put it another way the founders and the management of the WE Charity would have been taking a very big risk in misappropriating any of the funds made available for their own purposes.
So, the WE Charity was never going to receive $900 million without strings attached and the opportunities to cheat the government would have been almost none existent. Those are the key facts in this whole issue. Most of the rest is partisan BS.
1 comment:
This seems all too familiar and reminds me of when the media did not do their due diligence in the SNC scenario by explaining what a Deferred Prosecution Agreement was to the public. They preferred instead to push a narrative that Trudeau tried to "pressure" JWR to let a corrupt company off the hook with a "plea bargain" or "slap on the wrist".
A DPA is not a plea bargain but a way to, as Trudeau had reiterated, protect innocent employees from the actions of the C-suite while keeping said C-suite on a short leash. In the end, they got a plea bargain which was actually a less severe punishment than if they had entered into a DPA. Which shows JWR's intransigence and incompetence, but that reality gets in the way of their crafted narrative.
When even that bare minimum of legalese surrounding the alleged "pressure" on JWR got boring for them, and didn't generate the level of interest they wanted or damage to the Liberals and Trudeau in particular, the media switched to the "sexier" identity-politics narrative of Trudeau being an abusive, white male boss "bullying" an Indigenous female employee and what it meant for his "feminist brand".
That's what they are doing with WE: instead of explaining complex subjects they made it a populist storyline of Trudeau's "celebrity," and even went so low as to attack his mother. Margaret has always been a favorite target, and they can't resist a good Maggie-bashing, more so if it means dunking on her son. They never left high school. Instead of doing their homework and delivering their book report on Contribution Agreements, they pick on the cool kid's mom. Then they'll turn around and have Bell Let's Talk Day asking people to open up about mental health. Unless you're Margaret Trudeau, that is.
High-level explanations don't generate ratings, so they focus on simple stories about supposed "corruption" in the world of celebrity philanthropy to portray the Trudeaus and K-brothers as arrogant "elites" deserving of comeuppance. Plus invoking familiar demons about Sponsorgate. The whole thing is petty, mean, and stupid. It's like they needed a tabloid scandal to entertain the public while stuck at home during a pandemic. None of the TV studios are filming Hollywood courtroom dramas due to social distancing measures, so the news invented their own starring Justin Trudeau as "The Fugitive" and Pierre Poilievre as Jack McCoy, and degraded public institutions and the honorable civil service in the process.
You have to seek out online sources like this blog, and legal experts on Twitter like Ishat Reza, to get anything resembling facts. Which most people do not. And again, the bailout suckers wonder why journalism is dying. It's dying because it's committing a slow suicide by insulting the intelligence of the public.
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