After calling for a public inquiry into money laundering in British Columbia for many months, my BC Green Caucus colleagues and I were delighted with government’s announcement today that they will indeed launch such a public inquiry.

Below is the media release we sent out in support of government’s decision.

Media Release

B.C. Green Caucus Responds to Government’s Decision to Call for a Public Inquiry Into Money Laundering in British Columbia
For immediate release
May 15, 2019

VICTORIA, B.C. – The B.C. Green caucus has been calling for an independent public inquiry into the issue of money laundering in B.C. since February and supports government’s announcement today to establish a commission to begin that process.

“A public inquiry into money laundering in B.C. removes the investigation from partisan influence, protects the public interest and restores public trust,” said MLA Andrew Weaver, leader of the B.C. Green Party. “Our caucus supports this inquiry and stresses that it must be fully empowered under the Public Inquiry Act and without arbitrary limits imposed on the time period to be examined. This process must be transparent whenever possible throughout the proceedings, and the findings and recommendations must be released in a timely manner.

“The financial impact and human costs money laundering has had, and continues to have, on our province’s housing and opioid crises is staggering. British Columbians deserve no less than a full and complete account of how it was allowed to go on for so long and reach the scale that it did. They deserve knowledge of and accountability for the decisions made by individuals and regulatory agencies that contributed to the scale and severity of the impacts.”

-30-

Media contact
Macon McGinley, Press Secretary
+1 250-882-6187 |macon.mcginley@leg.bc.ca

The BC Government today released two new reports outlining the scale of money laundering that has been rampant in British Columbia over the last few years.

The first report was coauthored by Professor Maureen Maloney (SFU School of Public Policy), Professor Tsur Somerville (UBC Sauder School of Business), and Professor Brigitte Unger (School of Economics, Utrecht University). It painted an extraordinarily grim picture of widespread money laundering through British Columbia’s real estate sector totalling upwards of $7.3 billion in 2018 alone. In making 29 recommendations this expert panel noted that “a strong government response is urgently required.”

The second report comprised Part 2 of Peter German’s comprehensive three-part analysis into money laundering in BC. Part 2, entitled Dirty Money — Part 2.  Turning the Tide – An Independent Review of Money Laundering in B.C. Real Estate, Luxury Vehicle Sales & Horse Racing, expanded upon his initial analysis into money laundering in BC casinos released on March 31, 2018. The release of Part 2 followed on the heels of government releasing Part 3 of German’s analysis (on Tuesday) into money laundering in luxury cars.

Money laundering through the purchase and sale of luxury automobiles formed the basis of my questions to the Attorney General today during Question Period today. Below I reproduce the video and text of our exchange. I also reproduce copies of the media statement we issued in response to government’s release of today’s reports and my statement delivered at today’s press conference.

Video of Exchange

Question

A. Weaver: Earlier this week the Attorney General confirmed that money laundering goes beyond our casinos. Our biggest city is not just known for the dubious criminal distinction as the Vancouver model for money laundering, it’s also known as the luxury car capital of North America, fuelled, in part, by suspected criminal activity. Indeed, provincial employees identified numerous red flags connecting money laundering to the luxury vehicle export market, and despite these flags, the province issued over $85 million in PST refunds since 2013 to many suspicious individuals.

My question is to the Attorney General. He has said he has taken action on this finding, but why was this suspicious activity allowed to persist for so long? And why did it take this special report to highlight what government officials have known for many years?

Answer

Hon. D. Eby: I thank the member for the question. This is obviously a very serious issue, and I’m very grateful to Dr. German and his team. Former chief LePard was a key part of this report that uncovered this troubling information: among other things, car dealers saying they’re in the middle of money laundering; uncovering the use of straw buyers to purchase luxury cars; thousands of straw buyers acting on behalf of exporters who are the true purchasers, claiming PST rebates; people with extensive criminal backgrounds running resale operations of luxury cars, people who wouldn’t qualify for a liquor licence or other government licences but allowed to operate and run these businesses — obviously, major issues.

The member asked why it has taken so long to uncover these things. One of the major reasons that has been a theme throughout Dr. German’s reports is a lack of oversight, a lack of enforcement. We are moving quickly to address those issues. The Finance Minister is, obviously, reviewing this program, making sure that criminals don’t get PST rebates, for a starter, which seems like a pretty good start. The second piece is we’re working with RCMP, with police and with the Solicitor General’s office to ensure that the provincial government can do everything we can in terms of enforcement. We’re working with regulators in terms of their mandates.

There is a lot going on in this file to respond, and I’m very grateful that Dr. German’s bringing this stuff to our attention so that we can take action on it. And I agree with the member about: why did it take so long?

Supplementary Question

Thank you to the Attorney General for the answer. One quote in the German report on luxury cars, the section released earlier this week, stood out for me. A car dealer said: “I’m right in the thick of money laundering here.” He also said: “It’s unequivocally money laundering.”

It’s not surprising he came to that conclusion when it appears to be a regular occurrence for cars to be bought with bags of cash, sometimes in the hundreds of thousands of dollars, with zero reporting requirements in the industry. It’s absolutely crazy, what’s happening in B.C., not just in casinos but in the luxury car sector. We know the next chapter of the German report will tell us the extent of money laundering in our real estate sector.

To the Attorney General: the more we learn about this, the more we know how important it is now to have a public inquiry. The B.C. Green caucus has been calling for one for months now. Thousands upon thousands of British Columbians have been calling for a public inquiry, and just last week I introduced a petition from a federal EDA of the NDP calling on this government to bring forward a public inquiry.

My question to the Attorney General is: will this government launch a public inquiry, and if so, when?

Answer

Thank you very much to the member for the question. The member knows — and I’ve outlined for him and for the Legislature — our government’s approach on this, which has been to identify what’s happening right now and move as quickly as we can to stop it. We’ve had some success in the casino sector, stopping the bulk cash transactions. We will have success in the luxury car sector, addressing the issues that have been raised here.

The issue around public inquiry is really more aimed at: who knew what when, and are there any issues related to corruption? People want to know the answers to those questions. I understand why people want to know that. I mean, this went on for a long time. It’s the decision that is in front of cabinet, and cabinet will have a decision, and government will have a decision for British Columbians very shortly.

I thank the member for that.

Media Statement

Most recent money laundering reports support BC Green call for public inquiry
For immediate release
May 9, 2019

VICTORIA, B.C. – The two reports into money laundering in B.C. directly support the value of a public inquiry, reinforcing the B.C. Green caucus’ call for government to act.

“We saw in German’s report a direct rationale for a public inquiry. Namely, that it would improve public awareness, play a crucial role in fault finding, and would help to develop full recommendations,” said B.C. Green Party leader Andrew Weaver. “The B.C. Green caucus has been calling for a public inquiry for months, as have thousands of British Columbians. It is time for this government to start a public inquiry so that the public can get the answers it deserves and B.C. can move forward.

“Today, we discovered a much fuller picture of money laundering going on in our province. It is no surprise, but we can now be confident that illicit money has been influencing Vancouver’s housing market.

“One of the key findings of both reports was the issue of beneficial ownership. This is something I have been raising in the legislature under both the BC Liberal and BC NDP governments as a huge loophole in our system that should have been fixed long ago. Recent steps by government to address beneficial ownership through establishing a registry are encouraging, but we need to go further and end the use of beneficial ownership as a tax avoidance tool.

“We also saw that there are many sectors of our economy that have lax financial regulation, leaving them vulnerable to money laundering: from bags of cash being used to buy luxury vehicles, pianos and even to pay post-secondary fees. To deal with all of this the report recommended a ‘system-wide reset’ in criminal prosecution.

“With each new finding and each new report, we learn more about how our province has been exploited by criminals and how the systems and people charged with protecting us have failed over and over again. It is time to remove this investigation from any possible political influence, to get to the bottom of what happened, and to ensure this assault never happens again. British Columbians deserve to have their public interests protected and their trust in government restored.”

-30-

Media contact
Macon McGinley, Press Secretary
B.C. Green Third Party Caucus
+1 250-882-6187 |macon.mcginley@leg.bc.ca

Speaking notes

Today we discovered a much fuller picture of money laundering in BC –  it is clear that illicit money has been influencing our real estate market as British Columbians struggle with the impacts of the housing crisis.

One of the key findings of this report was the issue of beneficial ownership. This is something I have been raising in the legislature under both the BC Liberal and BC NDP governments as a huge loophole in our system that should have been fixed long ago.

Aside from real estate, the German report showed that there are many sectors of our economy that have lax financial regulation, leaving them vulnerable to money laundering: from bags of cash being used to buy luxury vehicles, pianos and even used to pay post-secondary fees. To deal with all of this Germans report recommended a ‘ system-wide reset’ in criminal prosecution.

With each new finding and each new report, we learn more about how our province has been exploited by criminals and how the systems and people charged with protecting us have failed over and over again. It is time to remove this investigation from any possible political influence, to get to the bottom of what happened, and to ensure that this assault never happens again. British Columbians deserve to have their public interests protected and their trust in government restored.

We have a clear rationale for a public inquiry. German himself referenced a positive change that came out of the Charbonneau Commission in Quebec. Clearly public inquiries can be useful and result in real change.

My colleagues and I have been calling for a public inquiry for months, as have thousands of British Columbians. The housing and opioid crises have impacted every single community and it is unacceptable that criminals have been profiting from these very personal, heartbreaking challenges. We need to work together. It’s time for a meaningful, independent explanation – we need a public inquiry.

Thank you.

Today is Holocaust Memorial Day. In the legislature the Minister of Municipal Affairs and Housing rose to deliver a Ministerial Statement for which both the Member from Abbotsford West and I delivered a response. I reproduce the video and text of my remarks below. We also issued a media statement that is appended at the end.

Video of Statement

Text of Statement

A. Weaver: Today I rise to speak about Yom HaShoah. It’s a day dedicated to reflecting on the atrocities of the Holocaust and remembering those who suffered and lost their lives.

As time moves forward, each survivor that passes away emphasizes the importance of taking the time to remember. Their stories allow us to understand what happened. They allow us to reflect on our society. I’d like to thank and honour these survivors for sharing their story.

Sadly, anti-Semitism is rising in Canada. In British Columbia, we’ve seen a 127 percent increase in the number of incidents over the last year.

Greater volumes of hate are being spewed on line, often behind the masks of anonymity. Anti-hate groups are also reporting increased in-person incidents of hate.

Religious and ethnic intolerance is antithetical to the values we hold for society. The difficulty of accepting those who are different from ourselves has been a scourge on humankind throughout history. Our answer as a society must be a strong and resounding rejection of othering and hatred. We must consistently embrace our values of tolerance and liberty.

It was the deaths of people who wanted to live in an equal world that forged the society we live in today, and we cannot let their sacrifice slip away. We should use this day to remind ourselves we do not have a guarantee to our values of tolerance, freedom of religion. If we fail to defend them, we let slip the very humanity that generations have suffered to achieve.

Let us not forget the millions of Jewish people who were murdered. Let us not forget their stories. Let us not forget that there is still work to be done.

Media Statement

BC Green caucus statement on Yom HaShoah
For immediate release
May 2, 2019

VICTORIA, B.C. – Andrew Weaver, leader of the B.C. Green Party, issued the following statement in recognition of Yom HaShoah, Holocaust Remembrance Day.

“Today is dedicated to reflecting on the atrocities of the Holocaust and remembering those who suffered and lost their lives, as well as those who fought against it.”

“Religious and ethnic intolerance is antithetical to the values we hold for society. The difficulty of accepting those who are different than ourselves has been a scourge on humankind throughout history – our answer as a society must be a strong and resounding rejection of othering and hatred. We must consistently embrace values of tolerance and liberty.

“With the recent rise of antisemitism in Canada and in BC, it is even more important that we speak up against hate, and that we remember what can happen when we do not. Let us not forget the millions of people who were murdered; let us not forget their stories; let us not we forget that there is still work to be done.”

-30-

Media contact
Macon McGinley, Press Secretary
+1 250-882-6187 |macon.mcginley@leg.bc.ca

Today during question period I rose once more to ask about the issue of money laundering in British Columbia casinos. As you’ll see from the responses to my question, the Attorney General was quick to point fingers at the BC Liberal Member from Langley East.

Below I reproduce the video and text of our exchange.

Video of Exchange

Question

A. Weaver: I must say, it feels like I’m rising midway through an episode of the Twilight Zone here today in this Legislature. Frankly, while last night I was busy trying to prep up on the money laundering going on, it seems like far too many members of this chamber were enjoying casino night a little bit too much and probably are a little grumpy as they lost far too much money there last night.

Over the past eight months, we’ve learned that senior officials at the B.C. Lottery Corporation repeatedly demonstrated wilful blindness to the problem of money laundering in B.C. casinos. But now we know they went further. In fact, they went directly against the regulators’ recommendations and increased betting limits, per hand, to over 1,000 times the maximum betting amount allowed in Ontario. I’ll say that again — 1,000 times larger than you can bet in Ontario.

Now, I can only assume that senior officials and people perhaps in the minister’s or former minister’s office were blinded by the revenue stream. They appear to be singularly focused on hitting revenue targets and bringing in more government revenue with little, if any, concern as to whether the law was being broken or if it was fuelling an opioid or housing crisis.

My question to the Attorney General is this: what controls has he put in place within the B.C. Lottery Corporation to ensure that meeting revenue targets does not come at a price of condoning suspected illegal activity?

Answer

Hon. D. Eby: We’ve made a number of significant changes in the just over a year that we’ve been in government to address the issues that the member has been talking about. Some of the most important, I think, are around separating the revenue-generation functions, the revenue-generation piece at B.C. Lottery Corporation, from the regulator piece. Having those under the same roof is obviously an issue. So we have given the gaming policy and enforcement branch authority to regulate and oversee the B.C. Lottery Corporation. Giving them this authority and this power is a really important piece and something that was obviously missing. Why was the regulator not overseeing the conduct of the B.C. Lottery Corporation?

Beyond that, the member knows about basic things we’ve done — telling the casinos you’re not allowed to accept bulk cash anymore, that revolutionary idea that immediately ended the practice of bringing duffle bags full of cash into our casinos — after we formed government.

Now, I know the member for Langley East doesn’t like to hear about this. But he was there….

Interjection.

Mr. Speaker: Member.

Hon. D. Eby: If there is a public inquiry, he’ll have his chance.

Now, these are very serious issues. We’ve taken very serious steps. I thank the member for the serious question, and I wonder when the member for Langley East will rise and ask a question about this.

Mr. Speaker: Leader, Third Party, on a supplemental.

Supplementary Question

A. Weaver: We have no shortage of questions to ask on this file, and we will continue to do so until we start to get answers through the calling from public inquiry.

Here’s the next question. In February 2015, after finally contacting the RCMP organized crime unit about possible money laundering going on in their casinos, the CEO of the B.C. Lottery Corporation continued to strategically focus on attracting players willing to pay $100,000 per hand. When questioned about his decision, he said this: “We know them very well. We know their source of wealth. We know all their personal information. They need to share that with us for regulatory reasons.” That’s a quote from the CEO of the B.C. Lottery Corporation.

What we found out through the e-pirate investigation, is that it eventually became clear that these VIPs, the same ones that the CEO apparently knew so well, were part of an organized crime scheme linked to the fentanyl crisis. Yet the CEO Of the B.C. Lottery Corporation still is there.

My question is to the Attorney General. How can British Columbians have any confidence that those involved in perpetrating money laundering in B.C. are being held accountable for their actions, particularly given the reluctance of this government to launch an independent public inquiry?

Answer

Hon. D. Eby: The member knows why we have not yet called a public inquiry. That’s because we have been acting quickly to address the issues that the previous government left for us, the giant, gaping loopholes in our casino industry that allowed this activity to continue up until the point that we actually formed government.

Interjection.

Mr. Speaker: Member. Member, we will hear the response.

Hon. D. Eby: Now, I hear the member for Langley East saying that there’s an issue with the police. I would say there was an issue with the police when the member for Langley East called the RCMP to criticize a member for going on the news and saying we had a money-laundering problem and causing him to be disciplined. Now, that was a problem.

We’ve taken a number of steps to ensure….

Interjections.

Hon. D. Eby: He also disassembled the policing team that was dedicated to investigating casinos.

But regardless, we’ve replaced the board at B.C. Lottery Corp entirely. We have confidence in the team at B.C. Lottery Corp. to be a good partner in addressing these issues. We’ve given oversight to the gaming policy and enforcement branch to oversee what’s happening at the B.C. Lottery Corp. to ensure that the public can have confidence. And we’re all trying to move forward on this — well, with some notable exceptions.

Yesterday the Attorney General received the second Peter German report on the state of money laundering in British Columbia. In addition, the Minister of Finance received a report from the Expert Panel on Money Laundering. Both of these much awaited reports will provide information with which to inform a potential public inquiry into money laundering in BC.

This was the subject of my Question during Question Period today (see video and text reproduced below). As you will see from the responses, the government has stated that it will review the reports before they are eventually made public. A public inquiry is still being considered.

Video of Exchange

Question

A. Weaver: We learned last week that a controversial senior-level intervention was made by officials in the Finance Ministry in order to maximize casino revenue. Incredibly, the intervention to increase betting limits to $100,000 per hand, despite repeated warnings from the regulator, was deemed to be “in the public interest” by the former Minister of Finance.

Let me reiterate. Allowing $100,000 betting limits to be played at casinos, despite clear warning signs from the regulator, was deemed to be “in the public interest.” I don’t know how many of you have played blackjack or poker with $100,000 stakes. I’d suggest not an awful lot. Shocking, it is.

My question is to the Attorney General. Each week more and more information is brought to light. An ever-growing list of questions is emerging. Pressure for an independent public inquiry continues to grow. The federal Minister of Border Security and Organized Crime Reduction has indicated he is open to a request from the province for supporting an inquiry. He now has two special reports in front of him. Does he think he has enough evidence to call for a public inquiry?

Answer

Hon. D. Eby: Thank you to the member for the question. Yes, this is an important day. The Minister of Finance has received a report from her team, from Maureen Maloney, and has received Dr. German’s report, which, as the member knows, looks at issues around luxury cars, issues around horse racing and issues around real estate.

Dr. German’s report alone is more than 300 pages. We’ve just received it. We’ll be going through it to do a couple of things — to make sure that the public release doesn’t compromise any law enforcement investigations and doesn’t unfairly impugn the reputation of any individuals. Then we’ll be releasing it to the public. The reason for that is exactly the reason that the member has identified. The people deserve to know what’s been going on in British Columbia, what happened under the previous government and why we need to take the measures that we’re taking to get things under control.

They made a number of serious errors in judgment. We don’t know whether it was wilful blindness or negligence.

Interjections.

Mr. Speaker: Members.

Hon. D. Eby: The member who is shouting at me is one of the key members, obviously. I understand why he’s defensive about it, but the truth will out.

Mr. Speaker: The leader, Third Party, on a supplemental.

Supplementary Question

A. Weaver: Thank you to the Attorney General for his answer.

Last week the Attorney General said this: “The larger issue that I understand British Columbians are concerned about is really political accountability and to identify if there is rot in the system, to have that rot weeded out through a public inquiry system.” He’s absolutely correct. We need political accountability, which is why the B.C. Green caucus has been calling for an independent inquiry for over a month now. It’s why thousands upon thousands of people have signed petitions calling for one and why several organizations, municipalities and unions have also called for one.

Last week the Attorney General also said: “The Premier has been clear about keeping the option open to a public inquiry.”

My question is to the Attorney General. When will we know if government is serious about launching a public inquiry?

Answer

Hon. D. Eby: The member will know that our emphasis has been on identifying what’s been happening and on stopping that activity from continuing. That’s been the big priority. The member raises the issue of accountability, especially political accountability. I do think that’s a very important issue — not just for the member, not just for me and not just for the government but, certainly, for all British Columbians. We’ll be looking at the reports we’ve received, and the Premier and the government will make a decision about a public inquiry if necessary.