A federal report has found that the now-defunct federal green fund Sustainable Development Technology Canada (SDTC) created a web of conflicts of interest with insiders who made “increasingly questionable decisions.”
The Privy Council report, which was first obtained by Blacklock’s Reporter, said the foundation was “an organization where lack of governance and a continuous cycle of executive mismanagement led to serious conflict of interest breaches“ as well as the ”gross mismanagement” of over $150 million in public funds.
SDTC’s executive performance and bonuses were tied to how much funding was approved as well as how fast that funding was disbursed, the report said. It described this issue as a “key problem” of the foundation that resulted in millions of dollars being spent on initiatives that were “likely non-compliant and also appeared to show major conflicts of interest.”
The report detailed several instances of cronyism, such as the hiring of a childhood friend of the CEO’s husband for an executive position. The report also said staffing at the organization was in turmoil, with over 20 people resigning in 12 months, four people on stress leave, and three out of four executives being friends of the CEO.
SDTC was created back in 2001 to subsidize green research and development projects. It was disbanded on June 4, 2024, following Auditor General Karen Hogan’s report that found 90 breaches of conflict-of-interest rules among the entity’s leadership, with directors approving money for their own businesses.
The same day Hogan’s report was released, Innovation, Science and Economic Development Canada announced that all SDTC’s programs would be transferred to the National Research Council.
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A separate report released in July by Ethics Commissioner Konrad von Finckenstein found that former SDTC chair Annette Verschuren had breached the Conflict of Interest Act by not recusing herself from some of the board’s funding decisions that “improperly furthered” the interests of companies she was associated with. He said Verschuren continued to serve on the board of two non-profit corporations, remained the CEO of another company she founded, and participated in two types of SDTC funding decisions for corporations she was involved with.
Parliament has been gridlocked since October, while the Liberal government has refused to hand over all documents related to the SDTC to the RCMP for its investigation. While the Liberals say they are concerned about a potential violation of privacy rights under the Charter, the Conservatives have accused the government of violating parliamentary privilege by failing to comply. House Speaker Greg Fergus has said the Tories’ argument has credence.
RCMP Commissioner Michael Duheme told the House of Commons law clerk in July 2024 that the force likely could not use any of the SDTC records it had received because they had not been secured using the legal obligations required for criminal investigations.
