Minister of Public Works and Government Services Diane Finley breached conflict-of-interest rules by giving preferential treatment and federal funding to a project in Markham, Ont. that also featured “a number of interventions” by the Prime Minister’s Office, says Ethics Commissioner Mary Dawson.
In a report released Tuesday, Dawson said Finley broke conflict-of-interest rules in August 2011 when, as minister of human resources and skills development, she decided to give $1 million to the Markham Centre for Skills and Independence under the Enabling Accessibility Fund despite the fact the project failed funding criteria and included a “number of deficiencies.”
Senior Conservative ministers and the Prime Minister’s Office supported the project and made interventions “which appear to have been motivated by political issues,” the commissioner says in her report.
The proposal was submitted on behalf of the Canadian Federation of Chabad Lubavitch by Ottawa-based Rabbi Chaim Mendelsohn — who had close ties to then-foreign affairs minister John Baird — but the project failed HRSDC’s internal assessment and received one of the lowest ratings.
Nevertheless, the community hall project was added — at Finley’s request — to four projects already selected from 167 eligible proposals, the commissioner says in the report.
Finley approved funding for the project after speaking with Baird, who lobbied for the proposal, even though it didn’t meet funding criteria. The project was based in then-environment minister Peter Kent’s Thornhill riding in the Toronto area.
“I found that the Markham proposal clearly received preferential treatment,” Dawson said in her report.
“The funding decision may have been influenced by political considerations, but the reasons why this proposal was given preferential treatment remain unclear.”
Mendelsohn is the group’s primary representative when dealing with the federal government and Conservative party, and has travelled in recent years with Baird and Prime Minister Stephen Harper to Israel.
The proposal from the Canadian Federation of Chabad Lubavitch was the only applicant allowed to provide additional information after its proposal failed the department’s initial assessment, the commissioner found.
It was also the only proposal to be given “a last-minute external evaluation at Ms. Finley’s request,” Dawson said.
Moreover, the commissioner noted that “there were a number of interventions in relation to the proposal by the Prime Minister’s Office, two ministers, staff in Ms. Finley’s office and senior departmental officials.”
Mendelsohn is director of Chabad Lubavitch of Centrepointe in Ottawa and serves as the director of public affairs for the umbrella organization representing Chabad Lubavitch branches across Canada.
He was part of Harper’s delegation that travelled with the prime minister last year to Israel. Mendelsohn has also provided advice to the PMO on Jewish customs for events hosted by Harper.
Chabad Lubavitch is described as the world’s largest network of Jewish educational and social services institutions with over 3,500 branches in nearly 50 countries, according to her report. The Canadian Federation of Chabad Lubavitch is an umbrella organization for Chabad Lubavitch branches across Canada and is recognized as a not-for-profit organization.
Finley did not receive from her department, nor did she request, a full briefing on the merits of the Markham proposal, the commissioner said, although it appears the minister “was aware that the proposal had certain deficiencies.”
“The public’s confidence in the handling of public funds and the fairness of government transfer payment programs is undermined when ministers do not maintain the government’s stated commitment to managing them with integrity, transparency and accountability,” Dawson said in her report.
Dawson launched an investigation on her own following media reports suggesting Finley may have provided special treatment to the Markham proposal.
The preferential treatment Finley provided to the group does not appear to have been based on the identity of Mendelsohn as the federation’s representative, she said in the report.
The funding for the Markham project was later withdrawn because of significant cost overruns and project timelines not being met.
The Enabling Accessibility Fund was announced in Budget 2007 as a three-year, $45-million grant and contribution program for small-sized projects of up to $50,000, but was later extended in 2010 with an additional $45 million over three years, and mid-sized projects added.
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