IS RESISTANCE FUTILE?
War on money laundering would prove costly
B.C. governments have known of widespread money-laundering allegations in the provincial economy for at least five years, but don’t know if it’s worth the $15 million to $20 million a year to set up a special force to combat it.
In a remarkable two-day presentation before B.C.’S money-laundering inquiry, three senior civil servants acknowledged lawmakers and regulators were hampered by an inability to verify the scope of laundering. The bureaucrats said there was a lack of reliable data and understanding of money laundering or even what law enforcement “success” would look like.
They skirted questions about whether Attorney General David Eby discussed issues with ex-mountie Peter German while he was writing his reports, which prompted the inquiry, and whether Eby blocked the B.C. Lottery Corporation from correcting misleading media accounts about what was happening in local casinos.
German’s two reports were described by one lawyer at the inquiry as lacking any real data analysis while relying on outof-date anecdotes from 2004 to 2015.
“I think that’s unfair,” responded Mark Sieben, the deputy solicitor general. “There was some amount of data in his reports, but I would agree there was much commentary.
“Some of the narrative and some of the prose was not only different, but also a little more colourful and some of us, it may be the nature of the work we do, would have preferred a more businesslike approach to the narrative.”
Bill Smart, lawyer for BCLC, said German didn’t properly consult with the Crown agency and insinuated Eby fuelled a misunderstanding of what was happening in casinos.
He maintained BCLC had hired experienced money-laundering and organized-crime investigators and installed analytic tools for detecting money laundering. Yet it was rebuffed when it requested a commitment for greater policing resources and lower cash buy-in limits.
He said BCLC disputed that bags of cash continued to be brought into casinos or that large cheques were given to those who deposited large sums, played a little, and then cashed out.
“I don’t have any factual knowledge of that, given I only came into the role of deputy minister in June 2016,” Sieben replied.
Asked if the government was keeping tabs on money laundering before German was appointed, Megan Harris, executive director of the anti-money-laundering secretariat set up in 2018, replied: “That’s a better question for someone else.”
She “couldn’t speak” to any communication German and Eby had while the reports were being written: “I’m aware he spoke to German, but I am not aware of the contents of the conversations.”
When asked if Eby had prevented BCLC from correcting misleading media reports, Harris said: “I can’t speak to that, you should direct (the question) to the AG’S office.”
A former social worker, Sieben took his current job after working in the Ministry of Children and Family Development.
Harris spent most of her career in communications roles.
“I am not an anti-money-laundering expert and I rely on the advice of experts, I seek to look into the information provided by subject matter experts,” she explained to the inquiry commissioner, Austin Cullen.
Chris Dawkins, executive lead of real estate data analytics for the Ministry of Finance, an economist and taxation specialist, was the third government witness.
The trio gave the commission an overview of the NDP administration’s aspirational anti-money-laundering cross-ministry efforts, but did not inspire confidence.
In charge of developing a provincial anti-money-laundering strategy, Harris spends only about three-quarters of her time on it.
She said the government was hoping to respond to the crisis with specific actions, some already achieved, over the next four years, but it will probably take a decade to roll out a full panoply of measures.
There was no dispute the government and public could not evaluate whether anti-money-laundering measures even worked without reliable data or a baseline.
“That’s something that would need to be undertaken.” Sieben conceded.
“Measuring this will not be done easily and we don’t know what that will look like.”
Asked about the numbers in the recent reports, Harris said: “I can’t verify it. That’s work the
There was no dispute the government and public could not evaluate whether anti (laundering) measures even worked without reliable data or a baseline.
working group still needs to do, to figure out how we measure success. We don’t know how to do that yet, it’s difficult to do.”
Being unable to define success was one reason, along with the cost, that the 2019 plan for new independent financial intelligence and investigations units is in limbo.
Akin to B.C. Transit Police, with 78 officers and civilian staff, the force’s projected cost was $18.5 million the first year, including $3 million in startup expenses, $15.4 million in 202021 and $16.4 million by 2023-24.
“The proposal, in our view, is a really great piece of work,” Harris insisted. “It definitely has merit.” She added the government didn’t want to undertake large projects until Cullen weighs in next year.
Sieben said the province’s strategy was young and needed “to mature.”
“We are not necessarily implementing exactly what German recommended, but we’re applying the spirit,” he said.
“We don’t feel the need to slavishly follow the recommendations word for word . ... While I accept 2015 to 2020 would strike many as a long period of time, much has happened and much has been learned through the external reports about how to approach these issues.”
The inquiry continues.