‘We are responsible’: Former B.C. gaming minister admits he didn’t do enough to address money laundering

While in power, senior members of the former BC Liberal government had opportunities to stop money laundering, and they failed to act. That’s a key finding from former B.C. Supreme Court Justice Austin Cullen, who publicly released his final report and recommendations of British Columbia’s public inquiry into money laundering on Wednesday.

However, there is no finding of corruption.

In Cullen’s report, he specifically identifies former Premier Christy Clark, and her then gaming ministers Mike de Jong and Rich Coleman, as knowing about the problem but displaying a failure of will to address the problem.

When discussing Coleman specifically, Cullen wrote in his report that at one point, the former minister “should have recognized that there was a need to take aggressive action to bring an immediate end to the suspicious activity, that by the end of his tenure, was clearly spiraling out of control.”

Cullen’s report says Coleman arranged for an independent review of anti-money laundering measures in the gaming industry, but did not act to stop the flow of suspicious transactions.

The report finds between September 2015 to the end of de Jong’s tenure in 2017, “Mr. de Jong finally received accurate information about the state of the crisis facing the gaming industry.” It adds de Jong took action that was “meaningful,” but “were not commensurate with the gravity of the crisis facing the industry.”

The report said the “inadequacy of these actions” allowed money laundering to continue at “unacceptable levels” for two more years.

Former gaming minister “accepts” BC Liberals should have done more

“I think we are responsible,” de Jong told reporters on Wednesday, adding he was not trying to shirk responsibility.

Noting Cullen “commented very favourably” on some of the steps that were taken, such as the establishment of the Joint Illegal Gaming Investigation Team, de Jong accepts the commissioner’s assertation that more should have been done.

“He observed that the government of the day and I should have gone further. I accept that,” de Jong said.

Cullen called the steps that were taken “reasonable,” given the information the government had at the time.

“But the steps weren’t up to the task of abating money laundering in casinos, which was a major problem at that time,” Cullen added Wednesday.

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But there is no finding any of those politicians made the decisions they did for their own benefit.

“He’s concluded that while some officials could have done more — and, in some cases, should have done more — none of those failures were motivated by the hope of personal financial, policital, or some other type of gain,” explained Patrick McGowan, a lawyer with the commission.

The 1,800-page report also finds Clark received information that casinos were reporting transactions involving enormous quantities of cash as suspicious, but failed to ensure these funds were not accepted.

Cullen found find the various actions the former minister took were insufficient to resolve what he describes as extensive money laundering in gaming through the 2010s.

In his report, Cullen writes there is “no evidence capable of supporting a conclusion that any of these individuals engaged in any form of corruption with respect to matters within the mandate of the Commission.”

“I accept that each was, at all times, motivated by their responsibility to work in the best interests of the province and its citizens. Some fell short in their efforts to do so, but I reject any suggestion that they were deliberately working contrary to the public interest,” Cullen further wrote.

The commissioner also found money laundering was not a main factor in B.C.’s rising home prices during that period.

Among his 101 recommendations is a call for the creation of an independent Anti-Money Laundering Commissioner.

“This will be an office of the legislature with a status that will permit independence from the government of the day,” Cullen said Wednesday.

Other recommendations include enhanced regulation of the real estate industry and greater scrutiny of those using cash in B.C. casinos.

Attorney General David Eby says the province will be doing whatever it can to fulfill the recommendations of the report. However, he’s also calling on the federal government to help out.

“The federal government will need some time to digest both this very lengthy report and its recommendations. Once they are prepared, I look forward to working with them … I hope they take up the challenge.”

Cullen described assets seized in B.C. as “relatively anemic.”

“We’ve seen a high of $19.6 million in 2010-11 to a low of $2.9 million in 2018 2019. These amounts are simply not commensurate with the amounts which are laundered annually in British Columbia, nor with the amount seized in comparable jurisdictions,” he said.

“New Zealand, for example, has a similar population and GDP to British Columbia, but has achieved much greater success at identifying and seizing or restraining illicit funds. In a … comparable period of time, they seized $358 million in Canadian funds, of which 56 per cent was said to be money laundering.”

Read more:

• Money laundering not main cause of rising B.C. home prices, Cullen commission finds

• Casino operators tell B.C. money laundering public inquiry they followed money rules

As for how money laundering has influenced home prices in B.C., Cullen finds it has not been the main driver in rising real estate prices. In his 1,800-page report, he writes low supply, high demand and low interest rates are the drivers of housing unaffordability, not money laundering.

Cullen says while a lot of money laundering has happened in the shadows, “some has happened in plain sight.”