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

An unprecedented volume of illicit cash was laundered through B.C. casinos over the course of a decade, but money laundering has not been the main cause of rising home prices in the province.

Those are some of the key findings from former B.C. Supreme Court Justice Austin Cullen as his final report and recommendations of British Columbia’s public inquiry into money laundering are released to the public.

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.

In terms of the scale of money laundering in B.C., Cullen suggested it was impossible to determine a definitive figure, but says there is no doubt that it is a “significant problem.” He suggests there is “consistent support for the general conclusion that vast amounts of money are laundered in British Columbia every year.”

Money laundering happening ‘in plain sight’

Cullen describes 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.”

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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.”

When it comes to what politicians knew about money laundering in the province, particularly the former BC Liberal government, Cullen finds elected officials were aware of suspicious funds entering the provincial revenue stream through the gaming industry, but says there is no evidence of corruption.

Cullen writes that Rich Coleman, a former minister responsible for gaming in 2010, 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 1,800-page report also suggests Coleman, and other ministers responsible for gaming at various phases — such as Shirley Bond and Mike de Jong — each took some action to respond to the risk of money laundering in that industry.

Cullen was asked whether the steps ministers took were reasonable, given what they knew. He said he believed they were “reasonable steps, but not sufficient steps.”

“That may seem a bit a bit contrary to put it that way,” he acknowledged. “They definitely did take steps. But the steps weren’t up to the task of abating money laundering in casinos, which was a major problem at that time.”

Related articles: 

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

• Former B.C. lottery director says he’s ‘whistleblower’ on money laundering at casinos

• Feds lack of cooperation with B.C.’s money laundering inquiry ‘inexcusable’: Eby

But Cullen finds the various actions they took were insufficient to resolve what he describes as extensive money laundering in gaming through the 2010s.

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

Regardless, Cullen says there is no evidence to suggest that any of Clark or her ministers’ “failures” were motivated by corruption.

Cullen says the final report released Wednesday is the result of thousands of hours spent on investigations, research, and interviews. The Commission heard testimony from more than 200 witnesses and received more than 1,000 exhibits.

-With files from The Canadian Press