The epic story of how B.C. bumbled its way into becoming a global destination laundromat for dirty money was well told by independent reviewer Peter German last week.
Sophisticated Asian crime rings here and abroad played us local rubes like fish for several years, making incalculable sums of money. But the release of the report and Attorney General David Eby’s response is another case of barn door-locking. Everyone knows when that usually occurs.
There was some kind of collective realization about three years ago in officialdom about how stupid B.C. was looking. They finally started taking some steps in the direction of doing their jobs. The report says the massive wave of cash-cleaning has “dramatically” eased.
So the idea of a new gambling police force and all the other recommended reforms arrive long after most of the high-rolling hustlers, drug dealers and loan sharks have left the government’s casino party. Some are still around, living in places such as the $14-million Point Grey estate German noted as an example of dirty money flowing into real estate. They’re probably still amazed at how much they managed to accomplish with the “Vancouver model.”
It cleaned a fortune in drug money. The only thing that excuses some of the inaction is that it was a fairly sophisticated process, using offshore underground banks, online transactions and intermediaries. It took a while to figure out.
But the one obvious tell in their system was the mountains of $20 bills being cashed in for chips at Vancouver casinos night after night after night. Some officials remained stunningly oblivious to that for years. Other agencies realized how crooked it all was, but got locked in a toxic bureaucratic paralysis. There was zero political leadership throughout.
Over 12 months in 2010-11, there was $40 million in officially recorded “suspicious transactions,” about which nothing was done. That was a thousand per cent increase in suspicious transactions in one year. It was overwhelmingly Asian, from men who repeatedly lost their bankrolls and left, then popped back in with yet more bricks of $20 bills.
By 2014, the value of suspicious transactions reached $118 million. The enforcement branch, B.C. Lottery Corp. and the casino company were not even dealing with one another, because the “poisoned” arguments about what to do about the scandal were so intense.
“The BCLC argued that the bundling of small denomination bills was not necessarily an indicator that the money was the proceeds of crime, as there could be other explanations,” German wrote. “The cash continued to flow.”
River Rock Casino in Richmond took in $13.5 million in $20 bills in a single month in 2015.
One staggering anecdote from German’s report stands out. In November 2015, BCLC warned Great Canadian Gaming about 16 customers who were flagged for suspicious activity (money-laundering). It asked them to conduct an “education session” with them.
BCLC wanted the company to tell the patrons that the packaging and volume of cash (plastic bags full of rubber-banded $20 bills) they were bringing in was problematic.
Said German: “In other words, the letter was asking the company to tell patrons that they were displaying typical indicia of money laundering and ‘educate’ them on a more appropriate method of moving their wealth.”
So a Crown corporation was recommending that flagrant money-launderers be coached on better options for handling funds.
It’s a shining example of how the hunger for more revenue from government-sanctioned gambling can gradually override security measures, integrity concerns and common sense.
Following the classic Canadian inquiry model, the report is loath to name names and points no fingers. We’re much too polite for that. But it was the B.C. Liberals who presided over the whole corrupt carnival from start to finish.
The party put up Liberal MLA Jas Johal to respond to the report. He’s a former TV reporter. If he’d been on the news beat least week, he would have been quivering with indignation and chasing the implications of this report like a rabid dog.
But in his new role, he minimized and downplayed the scandal and the report.
Instead of confessing they dropped the ball, Liberals are trying to wish the whole mess away. That’s going to leave them looking as dirty as the money German tracked.
