The inquiry led by B.C. Supreme Court Justice Austin Cullen called for such a police unit, plus an independent office of the legislature. But there’s no sign of either.
When B.C. Supreme Court Justice Austin Cullen released his findings in 2022 on how to combat money laundering after his three-year inquiry, he led with two recommendations.
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• B.C. must create a specialized financial-intelligence and investigation policing unit.
• The province needs to establish of the legislature and appoint a commissioner to head it.
Nearly 2½ years later, neither has happened.
Whether they have any chance of ever happening remains unclear.
He said the specialized unit was needed because the federal government was failing to carry out its responsibility to investigate money laundering.
And Cullen was concerned that complex, cross-government efforts would stall over time without permanent oversight from an independent office.
Brock Martland, who was the senior lawyer for the Cullen inquiry, which was established by the B.C. government, has not given up hope on the recommendations. But given the passage of time, he said appears they is not a lot of appetite for them.
“I think that may represent a lost opportunity,” he said.
B.C.’s Finance Ministry is responsible for implementing the recommendations from the Cullen inquiry and earlier B.C. government-commissioned reviews of money laundering.
In a written response to Postmedia’s questions, ministry officials said the two recommendations remain possibilities.
“Some of the more complex recommendations, such as the establishment of an anti-money-laundering commissioner and establishment of a provincial money laundering intelligence and investigation unit, are currently under consideration,” said an email sent by Erin Hughes, a public affairs officer with the Finance Ministry.
The B.C. government had earlier told Postmedia it was going to produce an interim report in 2024 on the progress on the Cullen recommendations.
This time, B.C. Finance Ministry officials did not respond to questions about whether a progress report was going to be produced this year or when, or if not, why not.
Some progress being made
The B.C. government has made progress on other recommendations from the Cullen inquiry and other reviews.
The province also says the gambling enforcement unit at B.C.’s Public Safety Ministry will transition to a more-independent gambling control office once a new Gaming Control Act comes into force with its regulations, potentially in 2025.
But all these changes don’t address the critical issue of investigating financial crime and ensuring there are police officers with the skills and experience to do that job.
Cullen and other observers and experts say this is particularly important because if money launderers can break the law with impunity, it distorts markets including in real estate, it supports and leads to more criminal activity, and it undermines the public’s faith in the justice system. Billions of dollars are estimated to be laundered in B.C. annually.
Cullen found there was no sustained effort to investigate money laundering in British Columbia.
“Given the state of the federal regime, if the province is to achieve success in the fight against money laundering, it must develop its own intelligence capacity in order to better identify money laundering threats,” said Cullen in his 2022 report.
Cullen said that without a dedicated unit, the RCMP’s money-laundering investigations continue to be subject to federal priorities that would pull resources away to other issues such as national security, which resulted in money laundering — being given very little attention.
While creating a new unit will require a “significant investment” by B.C., those costs are likely to be offset by additional seizures and forfeitures of illicit assets, he said.
Create new money laundering unit with B.C. oversight
Cullen had said of his recommendation: “This structure will also give the province greater ability to hire and retain police officers and civilian specialists who have the knowledge, skills, and motivation to investigate money laundering and proceeds of crime cases. Too often, high levels of turnover within specialized policing units — especially those investigating financial crime — have undermined their effectiveness.”
Internal B.C. government documents filed with the Cullen inquiry show that Public Safety Ministry officials had examined a similar idea in June 2019, which built on the recommendations from the money laundering review of casinos by German.
The internal B.C. government proposal, outlined in a briefing note to then public safety minister Mike Farnworth, called for the creation of a financial intelligence and investigations unit and an anti-money-laundering “fusion” centre for data analysis.
The two units were estimated to need 78 staff, including police officers and civilian specialists such as accountants and analysts, as well as dedicated prosecutors.
At the time, the cost was estimated at $18.5 million a year and ministry staff recommended the province ask Ottawa for the funding.
Observers and experts say one of the biggest challenges in setting up a specialized unit in B.C. or at the federal level trained is staff.
Transparency International Canada’s executive director, Trevor Loke, said it’s a problem across Canada — and he doesn’t foresee the federal government providing B.C. the funding to create its own specialized financial-crime unit.
Whatever specialized units are created at the provincial or federal level, they must be properly funded, said Loke.
“You really need to make sure that not only can they act on the red flags they find, and investigate, but that they can actually bring cases forward to the courts,” he said.
The Financial Action Task Force, an international organization that sets anti-money-laundering standards, has highlighted Canada’s lack of successful prosecutions of money laundering.
A 2016 task force report on Canada found that law enforcement results “are not commensurate with money-laundering risks.” The report noted a high percentage of charges were being withdrawn or stayed.
Federal government planning its own financial crime agency
At the same time as a specialized money laundering unit remains under consideration in B.C., Prime Minister Justin Trudeau’s Liberal government has said it is going to create a new federal agency to tackle financial crime.
The federal Finance Department did not respond to Postmedia’s questions on when the agency will be created or whether it would set up units in B.C.
“Ongoing development and design work is being conducted with federal, provincial, and territorial partners, and is focused on comprehensively understanding financial enforcement gaps that currently exist,” department spokesperson Caroline Feggans said in an email.
Federal government officials also did not respond to a question about how financial crime is being investigated now by federal forces, referring questions to the RCMP.
In a written response, the RCMP said there are federal financial investigation teams across Canada, and B.C. has always had resources, which currently is the cyber and financial investigation team. The team’s investigations include money laundering, said RCMP spokeswoman Robin Percival in an email.
However, the RCMP did not answer questions about how many officers are assigned to investigating financial crime in B.C.
Garry Clement, a former RCMP superintendent who served as national director of the proceeds-of-crime program, said if B.C. tries to set up a financial crime intelligence and investigation unit, it’s going to take specialized training and officers will need a least five years of experience in the money laundering and proceeds of crime areas to become effective investigators.
He noted that during his 30-year career with the RCMP, which ended in 2003, officers rarely got to that level of experience.
He said it also has to be understood that almost all serious financial crime investigations are going to end up as international, which would require the involvement of federal police.
“We are not in the game right now,” said Clement. “Unfortunately, I suspect we will be having the same issues 10 years from now.”
Independent money-laundering commissioner would be watchdog
Cullen was also adamant that the B.C. government establish an independent anti-money-laundering office of the legislature and appoint a commissioner to head it.
He said that money laundering is rarely given the priority it requires and that even when aspects of money laundering are discovered, a lack of will and co-ordination had led to an ineffective response.
Cullen said the new office and its commissioner were meant to keep people informed on progress through annual and special reports. And he said the office was also meant to do research and provide advice to government, as well as assess the performance of provincial bodies.
Denis Meunier, a former deputy director of Canada’s financial intelligence-gathering agency, said he always believed the recommendation to create the independent office was important, and that it would be a good strategic move for the province.
It is important for transparency reasons and for the benefit of public interest, said Meunier, also a former director general responsible for criminal investigations at the Canada Revenue Agency, and now an anti-money-laundering consultant.
Martland, the Cullen commission’s senior counsel, said an independent commissioner would have focused continued scrutiny on money laundering.
“That would help us to do a better job,” he said simply.