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Pascale Fournier has resigned as president and CEO of the Pierre Elliott Trudeau Foundation.Handout

The head of the Pierre Elliott Trudeau Foundation and its board of directors resigned Tuesday, citing the political backlash that followed a revelation that the true benefactor behind a large financial gift from a Beijing billionaire was the Chinese government.

The foundation announced in early March that it planned to return $140,000 to the wealthy Chinese donor after The Globe and Mail reported that the contribution was part of a Beijing-directed influence operation to curry favour with Prime Minister Justin Trudeau.

On Tuesday, the foundation said in a statement that president and chief executive Pascale Fournier and the entire board would leave, adding that the political scrutiny surrounding the donation had put pressure on staff members and the board’s volunteer directors.

“The circumstances created by the politicization of the foundation have made it impossible to continue with the status quo,” the statement said.

The foundation, a non-profit organization dedicated to the memory of Justin Trudeau’s father, former prime minister Pierre Elliott Trudeau, said three directors have agreed to remain on an interim basis until a new board is chosen. The foundation is backed by a $125-million government endowment set up in 2002 under former Liberal prime minister Jean Chrétien. It provides scholarships, academic fellowships and leadership programs.

One source close to the foundation said there had been discontent with Ms. Fournier’s management. The source also said John English, chair of the foundation’s members, who elect directors and appoint auditors, had wanted the organization to be seen as non-partisan and less connected to the Trudeau family.

The source said Mr. English suggested to Alexandre Trudeau, the brother of the Prime Minister, that he leave as a foundation member in the interest of the long-term viability of the foundation. Neither Mr. English nor Mr. Trudeau responded to requests for comment. The Globe is not identifying the source, because they were not authorized to discuss the matter.

In an e-mail to the board and the foundation’s members, Mr. English called the mass resignations an “unfortunate situation.” He requested an early meeting to elect a new board of directors. In bylaws sent to members, Mr. English noted that the president must provide “all relevant information relating to the business and the affairs of the corporation to the board.”

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Chinese businessmen Zhang Bin and Niu Gensheng are pictured on May 30, 2014.Kevin Van Paassen/The Globe and Mail

In her resignation letter to the board and the foundation’s members, obtained by The Globe, Ms. Fournier said she attempted to “translate your trust into accountable actions.”

“Sometimes, the end is not exactly what we had planned or designed,” she wrote. “It comes as a different version of reality. With humility, we must embrace this unpredictable turn.”

Conservative Party Leader Pierre Poilievre said there needs to be an investigation into the foundation.

“We need to know who got rich; who got paid and who got privilege and power from Justin Trudeau as a result of the funding to the Trudeau Foundation,” Mr. Poilievre said on Twitter.

The Globe reported in late February that the Canadian Security Intelligence Service had captured a conversation in 2014 between an unnamed commercial attaché at one of China’s consulates in Canada and billionaire Zhang Bin, a political adviser to the government in Beijing and a senior official in China’s network of state promoters around the world.

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The pair 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, according to a national-security source. The source said the diplomat instructed Mr. Zhang to donate $1-million to the Trudeau Foundation, and told him the Chinese government would reimburse him for the entire amount.

The Globe is not identifying the source, who risks prosecution under the Security of Information Act.

On Tuesday, Mr. Trudeau told reporters he disassociated himself from the foundation after becoming Prime Minister. But he expressed concern about political attacks on the organization.

“It is a shame to see the level of toxicity and political polarization that is going on in our country these days but I am certain that the Trudeau Foundation will be able to continue to ensure that research into the social studies and humanities at the highest levels across Canadian academic institutions continues for many years to come,” he said.

Seven months after the Liberals won power in 2015, Mr. Zhang attended a Liberal Party fundraiser at the Toronto home of Chinese Business Chamber of Canada chair Benson Wong, where Mr. Trudeau was the guest of honour.

Just weeks after the May fundraiser, the Trudeau Foundation and the University of Montreal announced that Mr. Zhang and another wealthy Chinese businessman, Niu Gensheng, would donate $1-million “to honour the memory and leadership” of Pierre Trudeau, who as prime minister opened diplomatic relations with China in 1970.

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Of the $1-million, $200,000 was pledged to the Trudeau Foundation. The two men pledged $750,000 to the University of Montreal’s faculty of law, to fund scholarships, which include grants that help Quebec students visit China. Another $50,000 was supposed to be for a statue of the elder Mr. Trudeau that was never built.

At the time, the Trudeau Foundation said discussions about the 2016 donation began in 2014. It said the two businessmen “decided to make this donation after meeting a Chinese student who had a transformative experience studying at the Université de Montréal.”

Last month, Ms. Fournier said it was necessary to return the donation once the foundation learned that “there was a potential connection between the Chinese government and a 2016 pledge of $200,000.” She said the foundation is returning $140,000. The foundation received two payments of $70,000 each but never received the rest of the money, she said.

The University of Montreal has said it is undecided as to whether it will return the money.

The foundation also came under the political spotlight after Mr. Trudeau named former governor-general David Johnston as a special rapporteur to investigate Chinese government interference in the 2019 and 2021 federal elections.

Mr. Johnston was a member of the Trudeau Foundation but stepped down after the appointment. The opposition parties argued he was in a conflict of interest because of his connections to the foundation and because he was a long-time friend of the Trudeau family.

Opposition MPs also criticized the government for naming former senior civil servant Morris Rosenberg to head up a study into the 2021 election campaign, since he was president and CEO of the Trudeau Foundation when the Chinese donation was made.

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