For his weekend reading, Attorney-General David Eby had a new report due to arrive on his desk that describes the extent of money laundering through real estate, luxury cars and horse racing in British Columbia. Finance Minister Carole James was picking up her own report, one that identifies gaps in compliance and enforcement that have enabled this corrosion to spread through the province’s economy.
These reports, to be made public in the coming weeks, are expected to add to a long list of revelations that have given the province an international reputation as a haven for money laundering.
The scale of the problem is not known, but a case study by the Group of Seven-led Financial Action Task Force, published last July, alleged that an unregistered currency exchange existed in Richmond, B.C. It was part of an underground banking network laundering more than a billion dollars a year in illicit drug and gambling money.
And a Globe investigation published in February, 2018, uncovered how 17 underground lenders had claimed a $47-million stake in three dozen Vancouver-area properties, allowing people connected to the deadly fentanyl trade to park their unlawful gains in the real estate market. An RCMP intelligence report estimated that up to $1-billion from the proceeds of crime was used to purchase expensive Metro Vancouver homes.
Last June, Mr. Eby released findings from Peter German, a former deputy commissioner of both the RCMP and Correctional Service Canada. Mr. German laid out a dysfunctional regulatory regime for casinos that allowed large-scale, transnational money laundering by organized crime. He described “a decade of dirty money” flowing through Vancouver casinos.
But these reports don’t address one thing the NDP government would like to tackle. Mr. Eby calls it “political accountability,” but it could also be described as pinning this mess on the former Liberal government.
Since June, the NDP government left the door open to calling a public inquiry. But Premier John Horgan has said he isn’t sure the public appetite is there. Public inquiries can drag out for years and cost millions.
“People should not expect that a public inquiry would necessarily provide additional policy recommendations or close additional loopholes,” Mr. Eby said in an interview.
That’s the work being undertaken by the provincial government, on the advice of the internationally recognized and respected economists and criminologists it has retained. As well, Ottawa has pledged to direct much of its new anti-money-laundering resources to British Columbia, an acknowledgment that the region is becoming a global hub for the crime.
“The big piece of a public inquiry, that the work we have done to date does not address, is political accountability," Mr. Eby said. “Who made what decision, when? And an answer about whether there is some rot in the system. Whether this was simple incompetence, or willful blindness, or whether in fact it was corruption.”
The NDP minority government took office in mid-2017, ending 16 years of Liberal control. As the new Attorney-General, Mr. Eby set to digging into the issue. Now, the evidence is pointing to a growing problem that is feeding an epidemic of overdose deaths and fuelling a housing crisis, issues that touch many British Columbians.
The government has been waiting for the public to demand an inquiry and that may be starting to build.
Jack Trovato, a social-justice advocate in Richmond, has launched an online petition calling for a public inquiry, which at last count had almost 3,200 signatures.
The B.C. Government and Service Employees’ Union is leading a broader campaign, which is now backed by the municipal governments of Richmond, Victoria and Vancouver, the BC Green Party, the Union of BC Indian Chiefs, the BC Federation of Labour and the Vancouver and District Labour Council.
Stephanie Smith, president of the BCGEU, said the push for a public inquiry is driven by her union’s membership, not the political aspirations of the NDP government.
“We have members in casinos who need a safe work environment, our members talk to us about the need for affordable housing, and our members are deeply impacted by the opioid crisis,” she said. With 78,000 members across the province, the union has only collected 3,800 signatures to date for its own petition.
It may not matter how many names are collected, though. Mr. Eby detects that a groundswell is building. He is already pressing Ottawa to support a public inquiry.
“There is a lot of pressure for this," he said.