PHOTO RICH LAM, THE CANADIAN PRESS
Former Superior Court Justice Austin Cullen authored money laundering report
Canada’s Finance Minister, Chrystia Freeland, and her Quebec counterpart, Eric Girard, should add a title to their summer reading list: the Cullen report on money laundering, released last Wednesday in British Columbia.
Posted at 5:00 a.m.
They won’t tan stupid if they take the trouble to read this brick of more than 1800 pages. It is the culmination of three years of work by a commission of inquiry led by former Superior Court judge Austin Cullen, which sat for 133 days and heard from 199 witnesses. Money laundering is so serious in British Columbia that the so-called “Vancouver model” is used to describe the scheme used by criminal organizations that launder money from the sale of fentanyl, for example, in casinos and purchase of real estate. Transactions valued at several billion dollars over the past 10 years.
In addition to gambling and real estate, the report singles out financial institutions, the business community and luxury goods. The problem is not unique to British Columbia.
All of Canada is recognized as a veritable paradise for organizations wishing to turn the fruits of crime into clean money, and Quebec has its own horror stories.
In a previous editorial, we recommended a national survey to take full measure of the problem.
In his expected report, Justice Cullen rightly mentions the federal government’s inaction in this area. The RCMP, due to lack of resources, has not investigated financial crimes since 2012. As for the financial intelligence unit in the country, the Financial Transactions and Reports Analysis Center of Canada (FINTRAC), it is ineffective, notes Judge Cullen.
It is therefore relying on measures at the provincial level to combat money laundering. Starting with the appointment of a commissioner for the fight against money laundering and the establishment of a dedicated permanent investigation unit.
After hearing from many experts in the field, Judge Cullen also recommends the seizure of organized crime assets and the obligation, for the buyer of real estate, to show a clear record with regard to the origin of his income. Both of these deterrents would make Canada a little less hospitable to bandits.
In a passage that should be of interest to Conservative Party leadership candidate Pierre Poilievre, Judge Cullen advises to be vigilant with cryptocurrency, which is particularly vulnerable to money laundering.
The judge also recommends better training for lawyers, accountants and stakeholders in the real estate sector, an attractive sector for criminal organizations, including in Quebec, as demonstrated by the program Investigation in March 2020.
Justice Cullen also invites British Columbia and other Canadian provinces to participate in the national public beneficial ownership registry for federal corporations, an initiative announced in the recent Freeland budget. This tool, which should be available in 2023, is a first step in the right direction, but the federal government will have to do more if it wants to act effectively against money laundering. Starting with restoring resources to the RCMP so that they can start investigating again, and to FINTRAC so that it can fulfill its mandate, which is to provide relevant financial intelligence to law enforcement.
There’s one ingredient missing to make the Cullen Report as entertaining to read on the beach as a thriller financier signed Michael Lewis: the names of some politicians corrupted by organized crime. Disappointment, at least in British Columbia, to see that no one is accountable. Judge Cullen points out that a few elected officials, including former Premier Christy Clark, knew about the money laundering activities, but did little or nothing. However, they would not have drawn any personal benefit from the situation, writes the judge, who concludes that one cannot therefore speak of corruption.
There is food for thought for all elected officials in the country in this voluminous document which provides a better understanding of the modus operandi of criminal organizations. It would be a shame for it to accumulate dust on a library shelf. Money laundering is costing us collectively dearly. Doing nothing will cost us more.