Donor asks IRS to open fraud investigation into WE charity

A U.S. donor to Canada’s WE Charity said he has asked the Internal Revenue Service to open a fraud investigation into the organization after testifying that it took down a plaque on a Kenya school built to honor his dead son and replaced it with that of another donor.

Reed Cowan said in a YouTube video posted over the weekend that he had filed a complaint with the IRS about WE. He also called on Canadian authorities — including the Royal Canadian Mounted Police — to investigate and for the resignation of the charity’s founders, brothers Craig and Marc Kielburger, along with WE’s board.

Asked to respond to Cowan’s request for the probes, the group said in a statement: “WE Charity is confident that we conducted ourselves appropriately at all times, and that any investigation would reach the same conclusion.”

Cole Burston/Bloomberg

Cowan’s video followed his appearance before Canada’s parliament on Friday, during which he told the House ethics committee that he raised hundreds of thousands of dollars in direct funding for WE Charity to honor the memory of his son, Wesley, who died in an accident at the age of four.

Cowan said he later found out that a plaque with Wesley’s name appeared to have been swapped for another donor’s. WE acknowledged the plaque may have been removed without Cowan’s permission.

During Friday’s testimony, Cowan asked WE’s supporters, including Prime Minister Justin Trudeau, to disclose all communications with the Kielburgers and the WE organization, saying he felt like his son’s grave had been “defiled.”

Trudeau declined to comment on the new allegations. “The PM has commented on the topic over the last number of months. Our focus now is on continuing to support Canadians as we get through this pandemic,” spokesman Alex Wellstead said in an email Sunday.

A spokesman for an IRS investigations arm said the agency is not permitted to confirm if a probe exists or, if it does, the source of that investigation.

Founded in 1995 as Free the Children, WE has evolved into a complex organization composed of numerous for-profit and nonprofit entities. Famous for its large youth rallies and school programs in Canada, the U.S. and Britain, it has courted support from a long list of politicians, billionaires, corporations and celebrities.

Through its for-profit travel arm, ME to WE, donors were able to pay for voluntourism trips to impoverished parts of the world to view projects they funded or to help build them, with a portion of the trip’s profits going back to the charity.

After reading a Bloomberg Businessweek investigation published in December that included allegations from former staff that donor plaques on projects in Kenya were frequently swapped — allegations that WE denied at the time — Cowan grew suspicious. His inquiries led him to discover that a plaque on a schoolhouse commemorating his son was missing. He came to believe the same schoolhouse had been rededicated to another donor as part of a broader move to rebrand the entire campus the “Howie Stillman Campus.”

In a statement Friday, WE acknowledged removing plaques from “a small number” of schools in 2009 in order to relocate them and said it may have failed to obtain Cowan’s permission to remove Wesley’s.

“Mr. Cowan’s experience was unfortunate but exceedingly rare,” WE said.

In recent weeks, Canadian lawmakers have expanded their probe of WE, which landed at the heart of a conflict-of-interest investigation in 2020 after it received a no-bid contract from Trudeau’s government to distribute pandemic aid. Trudeau failed to recuse himself from the awarding of the contract, even though the charity previously had paid his family members to appear at its events.

Over the weekend Charlie Angus, a member of the New Democratic Party, called on the Canada Revenue Agency, the country’s equivalent to the IRS, to launch an investigation into WE.

“WE Charity is not just another charity in Canada. It has partnered with governments and school boards across this country,” Angus said to Revenue Minister Diane Lebouthillier in a letter seen by Bloomberg. “That is why I am calling on you to immediately launch an investigation to determine if WE Charities and their associated entities have committed any breaches of Canadian laws governing the operations of charities under the provisions of the Canadian Income Tax Act.”

The CRA was unable to immediately respond to a request for comment. A spokesperson for Lebouthillier said she does not instruct the CRA to begin audits or interfere with those already underway.

Angus said in a follow-up email that he wrote the letter to ensure the CRA is aware of the situation. In a separate letter to the RCMP, also seen by Bloomberg, he asked the police service to investigate Cowan’s “allegations of fraud,” including documentation he appears to have to back up his claims, and to consider launching its own investigation.

A spokesperson for the RCMP confirmed it had received the letter from Angus. “The RCMP continues to examine this matter carefully with all available information and will take appropriate actions as required,” Corporal Caroline Duval said in an email.

— With assistance from Theophilos Argitis, Kait Bolongaro and Allyson Versprille