A retired Mountie who helped write the Mulroney-era legislation that toughened up cash reporting requirements said it is "almost unbelievable" that former prime minister Brian Mulroney accepted hundreds of thousands of dollars in cash from German-Canadian dealmaker Karlheinz Schreiber.
Bruce Bowie, a retired RCMP inspector, was appointed by the federal government in the late 1980s to help write Canada's Proceeds of Crime (Money Laundering) Act, a set of regulations that required banks, credit unions and other financial institutions to ask questions and retain records of customers who brought in more than $10,000 cash.
"I find it almost unbelievable that a former prime minister would ever [accept] that kind of amount of cash. It's almost unthinkable, you know," Mr. Bowie said from his office in Delta, B.C., where he owns a private investigation company.
"It's extremely unusual. Who the hell deals in cash these days, you know? I mean, you've got to create records. You've got to have some accounting for it. ... It's just not done."
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Almost every industrialized nation has strict rules surrounding large amounts of cash, almost all of them designed to track proceeds of crime and money laundering. Mr. Mulroney has never publicly said what he did with all of that cash and declined to answer a list of questions from The Globe and Mail and the CBC outlining what he might have done with the money. In an August interview, however, his spokesman, Luc Lavoie, acknowledged that Mr. Mulroney now considers it a "mistake" that he dealt with Mr. Schreiber in cash.
It is not, nor has it ever been, illegal to deal in cash. But, if Mr. Mulroney did what most people do when they receive a substantial payment, which is to enter it in Canada's business system, the cash should have generated a legally required paper trail.
Such documentation would have come about because of two decisions that Mr. Mulroney made: Regulations that his Progressive Conservative government created in 1991, and the fact that the former prime minister received a $100,000 payment from Mr. Schreiber on Dec. 8, 1994, in the United States. That country then had some of the most rigorous cash reporting requirements in the world.
The origins of Canada's cash reporting laws can be traced to a meeting of representatives from 15 countries in Paris in Mr. Mulroney's fifth year as prime minister. The U.S. government was in the thick of its "War on Drugs" and was pressing other countries to tighten up cash reporting laws to better track the illegal profits.
Canada's representatives included Mr. Bowie and an official from the Department of Finance. This meeting was the origin of the Financial Action Task Force, an intergovernmental body based in France that influenced the law that the Tories passed on how Canadians - including Mr. Mulroney - would be dealt with when they appeared before a teller with a wad of bills.
"If he brought it to his bank, for example, then the bank under that law would have been required to create what's known as a large-cash transaction report," Mr. Bowie said in an interview. "He would have had to present his identification. At that time ... the bank should have asked him, asked to determine the source of the funds."
In most cases, financial institutions were required to retain the records for only five years, so any documents created as a result of Mr. Mulroney's deposit have likely been destroyed by now.
Depending on what Mr. Mulroney did with the $100,000 he received in New York in 1994, dust-covered records might exist in the United States that detail the transaction.
Unlike most countries, the United States requires travellers entering and leaving the country to tell a customs officer if they're carrying more than $10,000 in negotiable instruments, which covers cash as well as stocks and bonds.
If Mr. Mulroney personally took the cash out of the United States, he should have told a customs officer about it, which would have produced a government record, said Alan Walls, a retired U.S. customs agent who helped seize millions of dollars during his career.
"Now if he wanted to put it in a bank and wire the monies, if he deposited more than $10,000 again in cash or negotiable instruments into a bank, then there was a required form that the bank had to make out," Mr. Walls said in an interview from his home in California.
If Mr. Mulroney spent the money in New York, no records would have been produced except receipts. He had, at the most, nine days to do so because he was back in Canada by Dec. 17 for the Montreal wedding of Céline Dion and René Angélil.
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