A three-year investigation into money laundering in B.C. casinos and the housing market has found no links to political corruption.
In a more than 1,800-page report, the Cullen Commission team outlines that elected officials in the province were aware of suspicious funds entering the provincial revenue stream through the gaming industry, but there is no evidence of corruption.
Former B.C. Supreme Court Justice Austin Cullen concluded money laundering in the province’s casinos persisted over the tenures of multiple ministers responsible for gaming including former BC Liberal MLA Rich Coleman and current BC Liberal MLAs Shirley Bond and Mike de Jong.
“Despite the failure of these elected officials to take steps sufficient to resolve the extensive money laundering occurring in the industry for which they were responsible, there is no basis to conclude that any engaged in any form of corruption related to the gaming industry or to the Commissioner’s mandate for generally,” Cullen writes.
“While some could have done more, there is no evidence that any of the failures was motivated by corruption.”
The BC NDP has for years suggested the previous government allowed money laundering to take place in casinos in the province.
One of the reasons why Attorney General David Eby and Premier John Horgan decided to allow for an independent, public inquiry was due to growing calls for public accountability linked to money laundering.
In the final report, Cullen concludes none of the BC Liberal politicians “knowingly encouraged, facilitated, or permitted money laundering” to occur in order to obtain personal benefit or advantage, be it financial, political, or otherwise.
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“To the extent that some have hypothesized that money laundering in casinos was facilitated by corrupt politicians or officials, they are engaging in conjecture that is not rooted in evidence,” Cullen concluded.
Cullen did conclude each of the ministers was privy, on some level, to information showing the gaming industry was at an elevated risk of money laundering.
This dates all the way back to 2010 when then-minister responsible for gaming Rich Coleman was aware of the concerns of the GPEB investigation division and law enforcement that the province’s casinos were being used to launder the proceeds of crime.
“Mr. Coleman also received information from BCLC stating that the province’s gaming industry had a strong and effective anti-money laundering regime,” the report reads.
“Mr. Coleman responded to these mixed messages by arranging for an independent review of anti-money laundering measures in the gaming industry, but he did not take action to stem the flow of the suspicious cash transactions that he had been warned about.”
Cullen also notes Coleman, Bond and de Jong did take some action to address laundering in the gaming industry.
This includes Coleman initiating an independent review, Bond directing the implementation of nine of the 10 recommendations and de Jong spearheading the creation of a new, gaming-focused law enforcement unit.
Cullen concluded former premier Christy Clark appropriately delegated oversight of the gaming industry to a succession of experienced ministers.
But the commissioner also found that in 2015, Clark learned that casinos conducted and managed by a Crown corporation and regulated by the government were reporting transactions involving enormous quantities of cash as suspicious.
“Despite receiving this information, Ms. Clark failed to determine whether these funds were being accepted by the casino and failed to ensure such funds were not accepted,” Cullen concluded.
Cullen has found the BC Lottery Corporation and law enforcement were aware of the money laundering crisis but failed to intervene effectively.
Large cash transactions started to grow beginning in 2008, and as Cullen described, they “did not go unnoticed.”
But despite the numerous warnings, no meaningful action was taken by law enforcement or the lottery corporation until 2015.
One of the key recommendations of the report is the province should establish an independent AML (anti-money laundering) commissioner and a dedicated provincial money laundering intelligence and investigation unit.
Anti-money laundering has not been the dedicated responsibility of one minister and Cullen concludes this is in part why it did not receive significant attention or priority from the government.
The AML commissioner, in Cullen’s mind, would be an independent office of the legislature that would provide strategic oversight of the provincial response to money laundering.
“The creation of a new office of the legislature with an exclusive focus on anti-money laundering will counteract the neglect that this topic has faced for too long,” the report reads.
The hearings went over 133 days and 199 witnesses were heard as part of the inquiry.
One of the final recommendations from Cullen is for government to focus on cryptocurrency as an emerging money laundering vulnerability and should be addressed through provincial regulation.
“The province will need to determine who is best suited to do this, whether it be BCFSA, the BC Securities Commission, or another body. It is crucial for government, regulators, and law enforcement to develop in-house expertise on cryptocurrency,” Cullen concludes.
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