Nonprofit involved with 1,400 CA schools accused of fraud

The charity became scrutinized after receiving a $900 million COVID contract in June to oversee a student service grant in Canada intended to help students with volunteering.

Video Transcript

AMA DAETZ: New at 6:00. An international nonprofit called WE Charity is under investigation and the ABC7 News I-Team is tracing links here to the Bay Area. Good evening, and thank you for joining us. I'm on Ama Daetz.

DAN ASHLEY: And I'm Dan Ashley. That charity has been highly endorsed by Governor Gavin Newsom in the past. Tonight a Canadian parliamentary committee investigating the charity is hearing testimony about its business dealings.

AMA DAETZ: ABC 7 News I-Team reporter Stephanie Sierra has been digging into the nonprofit's history in multiple countries and she's live tonight with our investigation. Stephanie.

STEPHANIE SIERRA: Yes, Ama and Dan, thousands of local students across the state attended WE Day, a statewide fundraiser put on by WE Charity every year. You may remember WE Day was actually a really big deal. But if you ask authorities in Canada, the organization's past is raising a lot of big questions that have yet to be answered.

WE Charity, 25 years of empowering youth to make a difference.

REED COWAN: WE Charities and Free the Children are embroiled in scandal.

SELENA GOMEZ: You are changing the world.

PIERRE POILIEVRE: Red flags before our eyes.

STEPHANIE SIERRA: WE makes doing good doable.

- You can do anything you set your mind to.

CHARLIE ANGUS: Why does a charity need all this property?

STEPHANIE SIERRA: WE vows for transparency.

CHARLIE ANGUS: That's the problem with this group is we don't see that transparency.

STEPHANIE SIERRA: WE says we're in this together.

- That's whole thing is you, we, us.

JENNIFER NEWSOM: And coming together and making a difference.

STEPHANIE SIERRA: One WE day at a time.

- Hi, WE day!

PIERRE POILIEVRE: The revelations just keep getting worse and worse.

CRAIG KIELBURGER: We apologize.

STEPHANIE SIERRA: So how did WE get here? Let's go back to 1995. WE Charity, formerly known as Free the Children, was founded in Canada by two brothers, Craig and Marc Kielburger.

- We want you to be empowered in whatever causes or issues you care about.

STEPHANIE SIERRA: It started as a club to ban child labor but transformed into one of the world's largest international non-profits aimed to empower youth around the world.

- All these people who make a change in this world. We do the same thing as you.

STEPHANIE SIERRA: WE charity officially launched in California in 2014.

GAVIN NEWSOM: WE time, everybody.

STEPHANIE SIERRA: Gavin Newsom, who was lieutenant governor at the time, tweeted on March 26 of that year to welcome the charity's first statewide fundraiser, WE Day California, hosted inside the Oakland arena.

[MUSIC PLAYING]

(SINGING) Hands up!

STEPHANIE SIERRA: You can hear 16,000 students from hundreds of schools across the state, packed inside to watch celebrities perform, sharing inspiration.

SELENA GOMEZ: You're changing the world and that's amazing.

ORLANDO BLOOM: And look at what you've achieved, and look what more you can do.

SETH ROGAN: If you do enough good things you get to see me for four minutes, which to me doesn't seem like a good reward. But apparently it's been working.

STEPHANIE SIERRA: In order to attend, students needed to do local and global acts of service. A common one was raising money to build schools for underprivileged kids in Kenya and Ecuador.

- Every week we go in and we tutor students, all subjects, all ages.

- It's amazing.

STEPHANIE SIERRA: The charity kept that amazing reputation up until June of last year. That's when Canadian Prime Minister Justin Trudeau's government awarded WE Charity more than a half billion dollar COVID contract to oversee a student service grant in Canada intended to help students with volunteering. A similar program already existed.

CHARLIE ANGUS: We all stopped and said, wait, what? What are you doing?

PIERRE POILIEVRE: That raised a lot of eyebrows.

STEPHANIE SIERRA: I spoke with Charlie Angus and Pierre Poilievre, both federal members of parliament. They both represent two of Canada's four political parties. Angus sits on a committee investigating WE Charity for the past eight months.

CHARLIE ANGUS: What was even more shocking was the fact we found out that WE was hiring the prime minister's mother and brother, using the prime minister's wife as an ambassador for the organization. That's all really, really questionable.

CRAIG KIELBURGER: Would you repeat the question, please?

STEPHANIE SIERRA: A few weeks ago on March 12th, the Kielburger brothers testified under oath they paid Trudeau's family close to a half million dollars in speaking fees for WE Day events.

CRAIG KIELBURGER: So that dollar amount would not be out of the norm for our most frequent speakers.

STEPHANIE SIERRA: WE Charity's COVID contract was canceled last July after a huge public outcry prompted two Canadian parliamentary committees to launch an investigation.

CHARLIE ANGUS: The one thing that the Kielburger group is really, really good at is embedding themselves with very, very powerful politicians.

GAVIN NEWSOM: No one's given a ticket here. You have to earn the right to get here.

STEPHANIE SIERRA: Newsom, who was lieutenant governor at the time, became co-chair of WE Day California with his wife, Jennifer, from 2014 to 2016. Newsom even sent a letter with former California state superintendent Tom Torlakson encouraging all school districts and administrators to attend the inaugural year.

JENNIFER NEWSOM: Coming together and making a difference and making the world a better place and that's thrilling to me.

STEPHANIE SIERRA: The Newsoms spoke at WE Day California in 2015 along with San Jose mayor Sam Liccardo.

SAM LICCARDO: To transform the world starting right here in San Jose.

STEPHANIE SIERRA: Liccardo's staff told ABC7, this office has no record of an offer of payment from WE Charity for the speech made in 2015.

According to state public Finance records, a couple of weeks before Newsom spoke out weekday 2015, records indicate Newsom made a behested payment, which according to the Fair Political Practices Commission means he requested Comcast donate to the nonprofit for more than $242,000. Records show the following year another organization founded by the Kielburgers sent the Newsom's baby gifts worth $110.

We reached out to the governor's office for comment but have yet to hear back.

CHARLIE ANGUS: And certainly there's been a huge shift for WE USA and California is a big, big market in terms of the superstar status of people involved in WE Days. And the donors, there's a lot of donor money.

STEPHANIE SIERRA: $490 million has been raised for charity across the US since 2011 according to the charity's tax forms filed with the IRS. So where is it all going?

CHARLIE ANGUS: We're all told this is all to do with helping the children, but actually tracking and figuring this out has pretty much stumped a parliamentary committee.

STEPHANIE SIERRA: WE Charity claims on its website 90% of donations from the US and Canada support programming, while only 10% goes towards administrative costs.

OPRAH WINFREY: I'd like to commit to building a hundred schools around the world. A hundred schools.

STEPHANIE SIERRA: Since the brothers appeared on "Oprah" in 2000, WE Charity claims 1,500 schools and school rooms have been built across the world with funds. But the non-profit has been unable to provide a list of each location to the parliamentary committee.

PIERRE POILIEVRE: Can't tell us where those schools are, and who the students are, who the teachers are, and how we can even prove that they exist.

STEPHANIE SIERRA: The lack of clarity leaving donors with more questions about where their money went. Something Reed Cowan knows well.

REED COWAN: Here today to speak for and on behalf of this little guy right here.

STEPHANIE SIERRA: Cowan is a journalist in Las Vegas who testified via Zoom.

REED COWAN: This is Wesley Cowan.

STEPHANIE SIERRA: After his son Wesley died in an accident, Cowan honored his legacy by raising money to build a WE school in Kenya in 2009. The school plaque was inscribed with Wesley's name. But Cowan testified he learned years later, WE Charity replaced his plaques with other donors several times.

REED COWAN: Why would a plaque ever be taken down I guess is the part I just, I've tried to think it through. But I just can't really figure out the answer to that one.

CRAIG KIELBURGER: I agree with you. It should never have happened. I'm-- it-- we made a mistake.

REED COWAN: It feels like to me returning to my son's grave to find it broken open, defiled, and empty.

STEPHANIE SIERRA: Allegations have surfaced that multiple donors have been funding the same projects at WE schools in Africa.

PIERRE POILIEVRE: Someone even said that these plaques to honor donors might as well have had Velcro on them because they were being removed and replaced so rapidly.

CRAIG KIELBURGER: We publicly apologized and we know that that's something that we need to get to the bottom of.

STEPHANIE SIERRA: The organization has since apologized again but says Cohen has no basis of accusing WE Charity for fraud. The ABC7 I-Team contacted WE Charity requesting a list of all the WE schools built with money donated by Californians over the last eight years. The charity didn't answer that question stating, "As we are sure you can appreciate, we cannot provide answers to your questions as they pertain to private individuals."

However, the nonprofit did provide us the following statement saying, "Over the years, WE Charity has provided youth volunteerism programs to 18,000 schools in Canada, the United States, and the United Kingdom, empowering young people to help more than 5,000 causes. In California, WE Charity serves 1,400 schools and educational groups with free curricular programs supporting youth service, youth mental health, and trauma-informed learning programs."

CHARLIE ANGUS: And they may be doing some good work. But we actually haven't gotten a picture of who owns what and how the money flows. And without that, how can you say you trust it.

STEPHANIE SIERRA: Now the Canadian parliamentary committee investigating WE Charity had authorized issuing four subpoenas to get any executive leaders of WE Charity to testify. Now all but the organization's chief financial officer, Victor Lee, have done so. Lee's answers are due to this committee tomorrow. For the I-Team, Stephanie Sierra, ABC7 News.

AMA DAETZ: All right. We know you'll stay on top of it. Thank you, Stephanie.