Former Trudeau Foundation head says past leadership misled Canadians on Chinese donation

Former Pierre Elliott Trudeau Foundation president Pascale Fournier told MPs Friday she believes the non-profit organization’s earlier leadership misled the country by characterizing a donation from wealthy Chinese benefactors as a Canadian donation.

Ms. Fournier, who resigned her post earlier this month, testified before the Commons ethics committee Friday on the crisis at the publicly financed foundation that arose after The Globe and Mail reported that the Chinese government had orchestrated $1-million in donations to the foundation and the University of Montreal law school in hopes of influencing Justin Trudeau, who ultimately became Prime Minister.

Open this photo in gallery:

The foundation publicly identified Chinese billionaire Zhang Bin and fellow Chinese businessman Niu Gensheng as the donors. They were also credited in the organization’s annual report for their pledge of $200,000 – of which $140,000 was eventually donated.

However Ms. Fournier said she can’t be sure who the true donor was – and told MPs she was proposing a forensic audit of the matter before she left her position earlier this month. She noted that the first 2016 tax receipt, for an initial $70,000 donation instalment, was made out to a Canadian subsidiary of a Chinese company and it was sent to an address in Beijing – one later identified as that of a Chinese-state-backed industry association.

She criticized the way in which the foundation advertised this donation to Canadians, noting that former president Morris Rosenberg wrote an open letter in December, 2016 – in response to media coverage – saying that the first $70,000 instalment was “not recorded as a foreign donation since it was paid by a Canadian entity.”

A tax receipt obtained by The Globe under access-to-information law shows that the 2016 tax receipt for the instalment was issued to Millennium Golden Eagle International (Canada), the Canadian subsidiary of a Chinese company.

The same trove of documents obtained under access to information also shows that the Chinese cultural group later asked that the tax receipt be reissued to its address in Beijing, not the address in Hong Kong.

“I think this is something that is misleading to Canadians,” Ms. Fournier told MPs. “There is a difference between the tax receipt – what it said, mentioning China – and the fact that it was presented publicly, in terms of interviews and publicly in terms of the annual report, that is currently on the website of the foundation, as Canadian.”

The Globe asked Mr. Rosenberg for comment but he did not immediately respond.

In February, The Globe reported, citing a national-security source, that the Canadian Security Intelligence Service had intercepted a 2014 conversation between Mr. Zhang and an unnamed commercial attaché at one of China’s consulates in Canada. They discussed the federal election that was expected to take place in 2015, and the possibility that the Liberals would defeat Stephen Harper’s Conservatives and form the next government.

The diplomat told Mr. Zhang that Beijing would reimburse him for the entire amount of the donation to the Trudeau Foundation, according to the source. The Globe is not naming the source because they risk prosecution under the Security of Information Act.

In 2016, nine months after Justin Trudeau won a majority government, the Trudeau Foundation and the University of Montreal publicly identified Mr. Zhang and Mr. Niu as the donors behind a $1-million gift. The men pledged $200,000 to the foundation, which commemorates Mr. Trudeau’s father, former prime minister Pierre Trudeau. They also pledged $750,000 to the law school where Pierre Trudeau studied and taught, and $50,000 for a statue of the former prime minister that was never built. The school and the foundation ultimately received most, but not all, of the promised amounts.

Ms. Fournier told MPs that after reading The Globe story, she created an emergency committee to determine what to do regarding the donation to the foundation, which was set up in 2002 with a $125-million endowment from the government of Jean Chrétien.

She said she found it unusual as she dug into the matter that a Chinese industry association – which she said was under the “guidance” of China’s government – was communicating with foundation staff.

“They were giving clear directives on what needed to appear on receipts issued by the foundation, and I found that troubling, and I also realized that there was a Chinese address, whereas in the annual report, it was a Canadian address. And so there were all of these things that I wanted to shed a light on,” she said.

She said her mandate was due to expire shortly but had already signed an extension of two years. But she told the board that her condition for staying was that she be granted latitude to ensure a proper investigation of the Chinese donation.

“I needed to be able to shed a light on what happened and have confidential legal advice. I wasn’t going to make all of that public. But I wanted to shed a light on all of the things that didn’t match up,” she said.

She told MPs that she wanted an independent investigation and noted that “there was friction with the board and the trust was broken.”

Ms. Fournier and eight board members resigned from the Trudeau Foundation on April 10.

The remaining directors of the Trudeau foundation responded to Ms. Fournier’s testimony on Friday by saying they dispute “several of the statements” made including “some of the facts or their interpretation,” the foundation’s internal governance processes, reason given for the board resignations and “conflict-of-interest allegations” about some directors. Edward Johnson, a member of the interim board, said the foundation is asking to appear before MPs to “correct some of the statements or assertions.”

Ms. Fournier said it was important that the investigation be arm’s length: “I wanted everyone to recuse themselves before the process started. And that was also what the eight board members who resigned wanted.”

The committee has invited the Prime Minister’s brother, Alexandre Trudeau, to testify next Wednesday. The invitation was issued after the younger Trudeau told Le Devoir that he would like to appear to explain the good work conducted by the Trudeau foundation.

The Prime Minister has said he has not been involved in the Trudeau foundation since he became Liberal Leader in 2014. He told reporters in New York, where he is on official business, that his brother will happily answer any questions from MPs about the foundation.

“It is not secret to anyone that my brother has been involved in the Pierre Elliott Trudeau Foundation for many years and he will answer questions that are asked of him,” he said.

Mr. Johnson, who used to work for Pierre Trudeau, has also been invited to testify. He was chair of the board’s audit committee when the foundation received the donation from the Chinese benefactors.

Mr. Johnson and Trudeau family friends Bruce McNiven and Peter Sahlas were the only people who did not resign from the Trudeau Foundation over the controversial donation.

The Conservative chair of the House ethics committee, John Brassard, and NDP MP Matthew Green expressed concern that Ms. Fournier could be open to character assassination because of her willingness to provide testimony on the inner workings of the Trudeau Foundation and her concerns about the tainted Chinese money.

The two MPs told Ms. Fournier that she should alert them immediately if there is any effort to intimidate her and malign her reputation.

Ms. Fournier, a Harvard-trained lawyer, said she appreciated the support, saying her “entire career is built around my integrity and transparency.”

Asked if Mr. Rosenberg had been fired over the donation, Ms. Fournier said: “I was not there at the time and I cannot answer that question.”