November 6, 2020
Perched high in the mountains, halfway between Vancouver and Whistler, B.C., Quest University Canada (“Quest”) is one of the few private, secular universities in Canada.
Since opening in 2007, Quest has welcomed about 500 students annually from 40 countries around the world. For a pricey tuition, Quest offers a unique, one-of-a-kind, under-graduate education in Liberal Arts, in a spectacular setting.
Instead of taking five courses at once, students study only one subject at a time in what are called "blocks" and they do a research project called a "Keystone." In the Macleans Survey of Student Engagement, Quest has repeatedly come out on top. But even before COVID19, this plucky, promising little university was deep in debt.
In January of 2020, Quest went into creditor protection and at the end of October, Quest's Board of Governors sought court approval to sell the entire university in large part so it can pay a mortgage loan for $25 million to Vanchorverve Foundation (“Vanchorverve”), a registered charity run by Blake Bromley, a retired, Vancouver lawyer.
Blake Bromley is one of Quest’s co-founders and has been involved in its financing since Quest began. Tax returns for the university state that Bromley was a director from July of 2008 until April 28 of 2011.
Bromley claims to be "one of the world's foremost experts in charity law." Born in Yunnan, China, Bromley has travelled the world, "cross-pollinating" the charitable sector, as he puts it.
Bromley claims to have registered 650 charities that tax-receipted more than $2 billion. In March of 2020, he retired.
From my detailed research over four years, I have found 50 registered charities that have handled tax-receipted donations relevant to the funding of Quest University Canada. All these charities are run by Blake Bromley and his associates so I refer to these as "the Bromley Charities."
Under the Companies' Creditors Arrangement Act (“CCAA”), Quest’s case has been heard by Madam Justice Shelly Fitzpatrick. The problem is, despite ten months of proceedings, crucial information about the origins and the early history of Quest’s loans was not heard in court until the very last day of the proceedings. This information, filed in an affidavit on November 9, 2020, stems from tax returns and financial statements that were obtained from the Canada Revenue Agency on October 15, 2020 pursuant to a freedom of information request filed on July 8, 2020. These documents confirmed long-standing concerns, explained ahead.
Karen Elliott, Mayor of The District of Squamish, also expressed grave concerns and wanted more due diligence with regards to Quest's proposed sale, she told the local newspaper.
Quest's Birthright
According to agreements with Squamish (Memorandum of Understanding and a Covenant) more than 20 years ago, Quest should have benefitted from the development of 240 acres of land that was purchased for $1.7 million and re-zoned specifically for the university. That was Quest’s birthright but Quest didn't get it. Now, on that very same land there are 350 residential lots and homes worth approximately $400 million and yet Quest ended up in creditor protection, deprived of its birthright in terms of land and millions of dollars in tax-receipted donations.
Indeed, the Memorandum of Understanding ("MOU") between Squamish and one of the Bromley Charities states, "Any net revenue derived from the sale or development of the Market Housing Areas shall be expended to develop and maintain the Campus Site as well as develop and enhance the curriculum, develop and market the University and provide endowment and other funding for students, faculty and programs of the University within the boundaries of the District."
When the MOU was signed, The Squamish Chief reported, “A campus covering 121,000 square metres funded by the creation of 960 residential housing units is the Howe Sound Educational Foundation’s plan for district lot 512.” But as anyone can see, that plan was not followed.
Not only Quest didn’t fully receive the donations and economic benefits that were its due, but furthermore, Quest ended up saddled with high interest loans from a daisy chain of the Bromley Charities. First Global Charity Fund, then Foundation For Public Good, then Charitable Impact Foundation ("CHIMP"), and finally Vanchorverve Foundation. Quest's mortgage loan was transferred from CHIMP to Vanchorve as a "gift" with a value of $20,791,405.
The loans that the Bromley Charities extended to Quest were secured by a mortgage on Quest’s main campus. Once that mortgage went into default, the Bromley Charities could then benefit from Quest’s downfall to the tune of tens of millions of dollars.
Over the same years that amounts owing to the Bromley Charities brought Quest to its knees, these same charities and related entities have benefitted substantially from land sales, lease payments, the sale of a student residence, commission, fees, royalty income, naming rights to Quest, interest on loans, and more. On an estimated gross basis, these benefits look to total well beyond $100 million over nearly 20 years.
The Bromley Charities
It was because of the strange names of some of the Bromley Charities that they first caught my eye. For example, Trust Me Foundation, BeCause Foundation and Maple Syrup Mafia Foundation which funded another charity called The Next Big Thing. Some of the Bromley Charities appear to do nothing but slosh sums as large as $30 million from one Bromley Charity to another.
As for Quest University, ten of the Bromley Charities were intimately involved in funding its start-up. These ten reported a total of $425 million in tax-receipted donations. If only Quest had received all that cash, it almost certainly would not have ended up in creditor protection. To put this figure into perspective, consider that $425 million exceeds the initial costs of the Quest’s land and campus construction by more than ten-fold.
Quest owes its existence in part to Blake Bromley and the Bromley Charities but it has been an acrimonious relationship and, as I'll explain ahead, the Bromley Charities have benefited substantially from Quest while at the same time, pushing it into foreclosure.
Blake Bromley once wrote a letter to a potential donor stating that he had raised "$70 million of cash funding" for Quest. But Quest never received anywhere near that, tax returns show. Had Quest truly received $70 million in cash from The Bromley Charities, it would probably not have ended up in creditor protection and, ultimately, for sale.
Next, I’ll give three examples of how The Bromley Charities have deprived Quest of its birthright in terms of land and millions of dollars in tax-receipted donations.
First, consider that Quest University Canada Foundation tax-receipted $46.6 million in donations but gave the university merely $70,000 that same year. In 2015, this charity closed and re-opened under a different registration number. (The original # was 854947926, the current # is 819051376). And what happened to the money that wasn't given to the university? It was given instead to one of the Bromley Charities, Sea to Sky Foundation, which got a whopping $45,175,000.
Another Bromley Charity, QUC Residents Housing Foundation, received $3.2 million but gave the university no funding at all. And who got the money that the university didn't? You guessed it: The Bromley Charities: Fortius Foundation and Pacific Light Foundation. The latest news? In April of 2020, QUC Residents Housing Foundation renamed itself. Now its called “Building Benevolence in a COVID World Foundation."
Next, as a second example of how the Bromley Charities have treated Quest University, consider that the Bromley Charities reported non-cash, tax-receipted donations for hundreds of millions of dollars that was subsequently written off the books. Examples of this are Global Charity Fund (which reported $70 million as tax-receipted non-cash donations) and the Stewart and Marilyn Blusson Foundation ("Blusson Foundation").
Stewart Blusson
The story told is that Quest got $100 million from Stewart Blusson, a geologist and pioneer in the Canadian diamond mining industry. Mr. Blusson received the Order of Canada, in part, for his contributions to Quest. However, financial statements and tax returns clearly show that Quest could not have received anywhere near $100 million from Mr. Blusson. Quest did receive a "loan" of $65 million from him but according to financial statements, that loan was never touched, never drawn upon before it was "forgiven" in 2014.
As an example of how Stewart & Marilyn Blusson Foundation reported tax-receipted donations and then immediately wrote them off the books, consider what happened in 2007, the year that Quest opened. That year, Blusson Foundation reported precisely $10,535,900 in tax-receipted donations and the very same year, the Blusson Foundation wrote off the exact same amount as impairment on investment.
In total, the Blusson Foundation reported $123 million in tax-receipted donations yet only $342,200 was ever gifted to legitimate charities. A further $15 million was “gifted” to Sea to Sky Foundation, a Bromley Charity. However, land titles and mortgages show that $15 million boomeranged back to Blusson Foundation in the form of 60 acres of land known as “Parcel A.” That land was sold or transferred from Quest University back to Stewart & Marilyn Blusson Foundation at a market value of $15 million. Blusson Foundation then passed along Parcel A to Global Charity Fund, a Bromley Charity, which used it to secure a $20 million mortgage to cover a liability of Stewart Blusson’s diamond mining business. That mortgage was doubled to $40 million in November of 2019 - just three days before Quest’s loan came due on November 1, 2019. If only that land, Parcel A, had been used to the benefit of Quest rather than the diamond business, perhaps Quest wouldn't have had to enter into creditor protection at all.
To sum up, Stewart Blusson is credited with having donated $100 million to Quest but there is no evidence that he actually did. In fact, no evidence has been found that he gave even as much as one dollar. Mr. Blusson has been asked numerous times to explain what happened via telephone and e-mail. He doesn't reply.
Of the ten Bromley Charities originally involved with Quest, only three are currently operating. Three were shut down by the CRA, three closed voluntarily and one announced last year that it intends to close. The Stewart and Marilyn Blusson Foundation is still active, though with only four dollars remaining, it appears to have wound down.
Quest’s story brings into question the oversight of charities by the Canada Revenue Agency. Why do some charities get away with tax-receipting hundreds of millions of dollars in donations that appear to be bogus, and then just quietly shut down?
The Legitimacy of Quest's Original Loan
Quest ended up in creditor protection because of debts to the Bromley Charities. If that debt is legitimate, it stands to reason that it should be paid. But for the reasons explained in detail in my affidavit and in my letter to Blake Bromley, Quest's loans from the Bromley Charities should have been gifts, not loans. It follows that the “debt” that got Quest into creditor protection lacks legitimacy. Furthermore, it follows that Quest should not have been sold to pay a debt that isn’t legit.
To reassess the legitimacy of Quest's loans, the place to start is with Global Charity Fund. In 2011, Global Charity reported $70 million in tax-receipted non-cash donations. That same year and the following year, Global Charity made two gifts to Quest University Canada for a total of $950 000. After that, Global Charity made loans to Quest instead of gift and within two years, Global Charity’s assets were disposed of and it ceased to operate as a registered charity.
Global Charity Fund also gifted $2.5 million to QUC Residents Housing Foundation ("QUCRHF") which never funded Quest. Thus, it appears to me that Global Charity Fund's "gift" to QUCRHF may have been a “decoy” in the sense that it gave a false impression that Global Charity Fund supported Quest.
Over roughly the same years that Global Charity Fund gifted $950,000 to Quest, Global Charity received the exact same amount from another Bromley Charity, Almoner Foundation. If Global Charity truly had received $70 million, there would have been no need for $950,000 from Almoner. For these reasons, in hindsight it appears that the reason that Global Charity discontinued gifts to Quest because is because it didn’t actually start out by receiving the true economic value of $70 million.
In the CRA’s digital database, the amount of non-cash tax-receipted donations reported by Global Charity Fund in 2011 is reported as $70,000 not $70,000,000. If this amount had been recorded correctly, it would have been the largest annual amount of non-cash donations in the history of Canada up until 2011.
This “missing zeros” data entry error is not a one-off. In fact, twelve tax returns with 15 errors have been found in the CRA’s on-line database with regards to The Bromley Charities. In all 15 cases, the error is the same: the last three zeros are missing and in all 15 cases, the amounts reported are with regards to charities that made gifts related to the start-up of Quest.
Sale to Primacorp Ventures Inc.
On November 3, Quest began seeking court approval to sell the entire university to Primacorp Ventures Inc. ("Primacorp") whose principal is Peter Chung. The lawyers and the court-appointed monitor at PwC moved fast. On November 12 & 13, Quest's case was heard in court and on November 16, Madam Judge Shelley Fitzpatrick approved Quest's sale to Primacorp.
Quest's sale to Primacorp involved payment of $25 million to one of The Bromley Charities, Vanchorverve Foundation. In my view, this is perverse. That the CCAA court would legitimize this payment without considering all the facts is a travesty. The fact that all the facts were not provided to the court until it was too late is also a travesty.
As for how Primacorp proposes to finance its purchase of Quest, the proposed sale agreement almost no information at all. A key section is entirely blacked out. For all we know, Primacorp Ventures Inc. may be in collaboration with the Bromley Charities.
Peter Chung, the principal of Primacorp Ventures Inc. has a long history with faith-based charities that are funded by The Bromley Charities and other sources. This information was removed from Primacorp's web-site at some point in the past year.
In October, as part of a long series of letters to Blake Bromley, I pleaded with him to discontinue foreclosure against Quest and give the university its due. For starters, the title for 72 acres of land is currently held by the Bromley Charities and should be returned to Quest. This land, known as Parcel A and Lot 12, had an assessed value of $33.8 million as of 2020.
When all the economic benefits are considered, it looks as if The Bromley Charities owe Quest millions of dollars, not the other way around. Before approving the sale of Quest, the CCAA court had an obligation to find out who in truth owes what to whom. But so much for that.
On December 17,2020, the very last day in Quest's foreclosure proceedings, Madam Justice Fitzpatrick finally granted permission to Vivian Krause (the author of this blog) to be heard in court. But too late. As The Squamish Chief reported, Madam Justice Fitzpatrick decided that it was ""too late to unring the bell."
For transcripts of the court hearing on December 17, 2020, click here.
Tax returns for Vanchorverve Foundation show that in 2021, it received $26 million from the proceeds of the sale of the university. And what did the Vanchorverve do with the money? Did it donate the funds to help out the university? No. Not once cent. Instead, Vanchorverve made a donation to CHIMP for $24 500 000 and gifted a further $178,000 to six of the Bromley Charities.