The premier of British Columbia, John Horgan, says he is open to a public inquiry into how the previous government allowed money laundering to infiltrate casinos operated by the BC Lottery Corp., and how the government did nothing to discourage this.
Calls for such an inquiry began almost immediately after former RCMP commissioner Peter German’s report on money laundering was released two weeks ago, in which German characterized BC casinos as “laundromats” for organized crime.
At a press conference last week Horgan declared, “The findings of the German report when it comes to money laundering in casinos was absolutely horrifying … There are a whole bunch of things I would like answers to over the past 16 years.” The time period he refers to is when the Liberals were running the government and his party was in opposition.
German’s report warns that several sectors of the BC economy are vulnerable to money laundering, include the province’s explosive real estate market and even luxury automobiles.
Horgan said he has consulted with BC’s finance minister and with Attorney General David Eby, who commissioned German’s report as to what direction the government should take in the near future. He said he doesn’t rule out a public inquiry on the issue.
In a separate interview Eby told the Globe and Mail that he was working with the Finance Minister on the next step of the review, which won’t be as easy to conduct as the casino review was. “We had lists of clients and amounts, and video surveillance, and all these kinds of pieces that made it much easier to define the scope of the issue and what needed to be done.” He added, “Real estate is more challenging, and so we want to take the time to get it right.”
German’s report estimated that the money laundered by the province’s casinos was more than $100 million over a ten year period. He found organized crime linked to Columbia, China and Mexico using Vancouver-area casinos to launder money while the agencies that were tasked with preventing them were more engaged with stepping on each other’s toes than fighting crime.
German issued 48 specific recommendations that the government says it has begun to implement.
The former head of the province’s Integrated Illegal Gambling Enforcement Team (IIGET) said last week that former officials knew about the money laundering in casinos but did nothing because it would have cut into money the province collected from them.
Fred Pinnock, who ran IIGET from 2005-2008, declared, “Fault lies at the feet of the B.C. Liberals while they were in government and senior management of the RCMP in this province.” He added,
“They all knew what was going on in those casinos and racetracks. Primarily casinos, in particular, the big ones. It was wild west in those large casinos where organized criminal activity was running amok. “It was no secret to government. At all.”
Pinnock added, “I know I was complained about by government for my strident views in terms of casinos and what was going on. And I do know that a senior member in 2011 was muzzled by the RCMP as a result of a complaint from government one year before the contract was up for renewal and I think there’s a connection between those … events.”
When asked to comment, former solicitor general Rich Coleman said that his department had followed the lead of the RCMP and chose not to “compromise any investigations.” He disputes the claim that his government was “addicted” to casino profits.
Coleman answered Pinnock’s accusations, “The reality is what he is saying is inflammatory and it isn’t correct. The reality is that no one interfered with his ability to do his job from a political perspective.”
A year after Pinnock’s retirement in 2009 the government that Coleman was solicitor general for decided to disband the IIGET. Coleman explained: “I think we tried. I think the challenge was IIGET didn’t work. I thought IIGET would work better than it did. And I think that was our biggest disappointment.” He added, “We did everything we could. I had the confidence to do my job arm’s length from any interference with any investigation from police.”
He points out that his government later responded to reports of widespread casino money laundering by creating the Joint Integrated Gaming Investigation Team in 2015.
German’s report notes that the number of suspicious transaction declined by 60 percent after that team was established.
German interviewed Coleman for his report, which stated: “The loss of IIGET meant that the future rise of loan sharking, money laundering and organized crime in casinos, let alone illegal gaming outside of casinos, remained primarily with (BC Lottery Corp. and Gaming Policy and Enforcement Branch) to sort out.”
Several times during Pinnock’s tenure he urged expanding the team’s role into casinos but that he was discouraged by a lack of interest and the RCMP’s playing “ostrich.” He alleges that the government, which collects the lion’s share of casino profits, “knew they had a good thing going.”
Pinnock said, “Any interruption in the flow of dirty money into casinos would not be in the best interest of the B.C. Liberals. Corruption can come in many forms. It’s not always the greasy little man handing out envelopes of cash,” He continued, “It can also come in the form of a government looking the other way when dirty money is filling its coffers. It can also be extended to senior management in policing organizations who choose not to do the right thing when given the opportunity.”
He called Coleman’s Liberal party, “enablers, in terms of the flow of dirty cash into our casinos.” He called for those responsible “to be held to account.”
Eby agrees. “It’s not like it was impossible to address this issue. It’s not like it was an invisible issue or it was hard to figure out,” said the Attorney General. “I think it’s incredibly troubling when you have a former police officer who is responsible for this who is coming forward and saying ‘look, I tried to raise this issue and I thought we needed more attention to it and I was shut down.’ ”
