The Chabad rabbi at the centre of a controversy in which a federal cabinet minister was found to have violated conflict of interest guidelines says Chabad co-operated “fully” with the investigation and that its name has emerged unsullied.

In a statement released to The CJN, Rabbi Chaim Mendelsohn, director of public affairs for the Canadian Federation of Chabad Lubavitch, said that his organization was “aware” that federal Ethics Commissioner Mary Dawson was investigating a $1-million grant to Chabad Lubavitch of Markham to make it accessible for the disabled, “although we were unaware of the specific nature of these allegations,” adding, “we co-operated fully with this investigation.”

Dawson’s 46-page report, released March 10, found that the actions of Public Works Minister Diane Finley were “improper” and breached the Conflict of Interest Act because she awarded federal money to an infrastructure project backed by Rabbi Mendelsohn, who has close ties to prominent Conservative politicians, including former foreign minister John Baird, in whose Ottawa riding the rabbi lives, and the prime minister.

The proposal was submitted by Rabbi Mendelsohn on behalf of the Canadian Federation of Chabad Lubavitch. At the time of the awarding of the grant in 2011, Finley was minister of human resources and social development, which is responsible for administering funding for accessibility projects.

The investigation was launched in 2012 amid media reports that Finley had overruled her own departmental bureaucrats and awarded the funding anyway.

Even though there was “no suggestion” that Finley or any of her relatives or friends had a private interest in the decision to fund the Chabad centre, and no evidence that Finley and Rabbi Mendelsohn are friends or had ever met, Dawson found “that the Markham proposal clearly received preferential treatment.” She found that Baird had “close ties” to the rabbi, and that Baird “made representations to Ms. Finley in support of the Markham proposal.”

The Dawson report noted that Rabbi Mendelsohn “is well known on Parliament Hill,” that he took part in Harper’s trip to Israel last year, and that he “has developed relationships with certain ministers, ministerial staff and staff in the Prime Minister’s Office whom he contacts frequently when he is seeking assistance or is planning an event.”

After submitting his proposals, the rabbi “began contacting the staff of several ministers asking about the status of the proposals and seeking support for them.” After contacting Baird’s office in March 2011, an employee responded, “The minister got your package and was happy to mention his views on Chabad-Lubavitch to Minister Finley,” according to Dawson’s findings.

No one Dawson interviewed “was aware of whether the Chabad Lubavitch community provides significant financial support to the Conservative Party of Canada, but most surmised that it did not,” her report noted. 

“I did not find any evidence that Rabbi Mendelsohn was a significant contributor of financial or human resources to the Conservative Party of Canada’s election campaign in March and April 2011.”

Dawson’s report “makes clear that neither I, nor anyone associated with Chabad-Lubavitch, conducted themselves in anything but a proper manner, both legally and ethically,” Rabbi Mendelsohn said in the statement.

“We congratulate the ethics commissioner for having conducted such a thorough inquiry, and we thank her and her office for ensuring that the good name of one of Canada’s premier faith-based community service networks remains intact.”

Reached in Ottawa last week, Rabbi Mendelsohn refused to elaborate on his statement or answer questions.

His statement noted that Chabad “is a non-partisan network of Jewish community organizations serving the needs of people from a wide variety of religious, ethnic and social backgrounds. In that capacity, we liaise with elected representatives of all political stripes, and with all levels of government, irrespective of what political party is in power at any time.”

In the House of Commons last week, Harper defended Finley, saying he believed she had “acted in good faith and she certainly had no personal interest whatsoever in the decision” to award the funding.

Chabad Lubavitch of Markham was ultimately awarded $1,044,000 to make the facility fully accessible to people with disabilities. But most of that money was later withdrawn because, according to Dawson, Chabad was unable to secure the necessary building permits and “there were significant increases in costs to deal with building deficiencies.”

By that point, about $50,000 of the money had been spent, while the rest was returned to the program.

The CJN’s calls to Chabad Lubavitch of Markham were not returned by The CJN’s deadline.