I can speak to that, having interviewed Kate Bahen of Charity Intelligence. She told Canadaland she'd never seen anything like this and she likened the way WE Charity was leveraging itself to somebody with a credit card with a $10,000 limit who was constantly at $9,500. This was short-term, on-demand loans and revolving debt. Given that WE Charity was investing so heavily and so rapidly in Toronto real estate, to her eye as an independent auditor “a massive, massive red flag”—I believe that was the phrase—was raised as a result of what she saw in their audited financials.
In the audited financials, something popped out at me. The auditor brought up the responsibility of management for assessing the organization's ability to continue as a going concern in light of the breach of these bank covenants two years running. The auditor WE Charity chose to audit their financials said that unless management either intends to liquidate the organization or cease operations, or has no realistic alternative but to do so, they must maintain this responsibility to keep this going. This is a very sober warning that was not routine. There was nothing like it in their previous financial statements.
One thing we did point out in our reporting is that when WE Charity was in this seemingly very precarious financial situation, that's when the amount of money flowing out of the charity into Marc and Craig Kielburger's private company increased sharply, in the last two years, up to, I think, 8% and then 7%. Prior to that, WE Charity was moving money to the private company, but at a rate of about 2% of revenues. When you consider that this is in the neighbourhood of a $60-million charity, 7% or 8% of charitable revenues is a significant amount of money.