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Rich Coleman, David Eby, politicians respond to B.C. money laundering report

Former B.C. solicitor general Rich Coleman feels vindicated of 'mud slinging' claims of corruption.
Rich Coleman
Rich Coleman at the Commission of Inquiry into Money Laundering in B.C.

Former B.C. solicitor general Rich Coleman says the Cullen Commission report on money laundering in the province is proof of politically motivated oversimplifications and mud slinging.

Commissioner Austin Cullen concluded in his final report June 15 there was no evidence that supports any government official “engaged in any form of corruption” related to the gaming industry.

“This finding should be understood to mean that, in my view, none of these individuals knowingly encouraged, facilitated, or permitted money laundering to occur in order to obtain personal benefit or advantage, be it financial, political, or otherwise,” stated Cullen.

Coleman was the predominant BC Liberal minister responsible for regulating casinos during a period of roughly 10 years in which numerous red flags were raised about suspected illicit drug cash washing through casinos.

Cullen’s mandate was to explore possible corruption. After interviewing some officials at the Ministry of Finance, BC Lottery Corporation (BCLC), Gaming Policy and Enforcement Branch (GPEB) and casinos he determined there was no such motive.

Cullen did find fault in elected officials, including Coleman, for not doing enough to prevent money laundering.

“Those best positioned to put a halt to the profligate criminal misuse of the gaming industry between 2008 and 2018 failed to take necessary action despite the clear warnings of many knowledgeable and well-intentioned people, this represents a significant failure of will at a time, and in circumstances, when it was most needed.”

Cullen summarized: “BCLC’s approach reflected a completely unacceptable and unreasonable risk tolerance. GPEB and law enforcement likewise took minimal action to respond to the growth in large and suspicious cash transactions prior to 2015.”

Cullen noted Coleman received conflicting information from officials; whereas GPEB said there was a problem, the BCLC provided contrary briefings.

“While hindsight is 20/20 and there is always more that could have been done, the idea that we were somehow purposefully ignoring or somehow aiding money laundering has been proven to be incorrect,” said Coleman by email.

'Commission has confirmed my understanding'

Spearheading the commission was Attorney General David Eby, whose NDP party took office in June 2017. Eby called the inquiry after being briefed by GPEB and seeing duffle bags full of $20 bills, amounting to hundreds of thousands of dollars, being deposited at casino cages.

Cullen noted in 2014 alone, casinos accepted nearly $1.2 billion in cash transactions of $10,000 or more, including 1,881 individual cash buy-ins of $100,000 or more — an average of more than five per day.

Eby told media Wednesday, “The commission has confirmed my understanding that there was a serious and decade-long continuing problem of organized crime laundering hundreds of millions of dollars in B.C. casinos at the time I took over the gaming file.”

Asked what may have been the reason behind that failure of will, Eby said, “That's an important question for those individuals.”

And, he said, “I'll say, frankly, that as a politician, I wouldn't be satisfied with a sash worn by the commissioner that says not corrupt. I hold myself to a higher standard.”

Cullen did not define corruption in his report.

While noting corruption may be for political gain, Cullen and commission counsel did not examine witnesses about the hundreds of thousands of dollars casinos provided the BC Liberal Party and its MLAs over the decade. The inquiry did hear how BCLC officials were provided bonuses for greater revenues and it was also aware of the significant revenue stream the casinos provided to the government resulting in frequent community grants handed out by MLAs.

Commission counsel Patrick McGowan reiterated such matters were not, in the opinion of the commission, a motivating factor behind the “failure of will.”

Cullen’s team questioned Coleman over two days, including one he was asked to return to clarify his testimony.

Cullen said Coleman’s explanation to disband a police investigation unit specializing in illegal gambling activity “credible and consistent with the evidence of other witnesses.”

Cullen also accepted Coleman’s admission that Coleman made unfair comments to media about an RCMP investigator who went public with concerns about money laundering in 2011.

“They posed a real risk of misleading the public into believing that there was no basis for concern about suspicious transactions in the province’s casinos at a time when Mr. Coleman had good reason to believe that there was cause to be worried about the origin of the funds used in those transactions, and he had just initiated an independent review focused on money laundering in the province’s casinos,” the report stated.

The report does not discuss the possible ramifications of those comments on the investigation.

'Criminal organizations ran circles around the provincial government'

Meanwhile, BC Libral MLA Mike De Jong, a former finance minister, told media Cullen’s report was “satisfying.”

He acknowledged more could have been done but “to have heard over the past number of years, from some as we have, about allegations the government I served in was engaged in corrupt practices around some of the issues touched on and examined by Mr.Cullen is frustrating to say the least.”

Cullen noted, “While the rate of suspicious transactions in casinos began to decline in the second half of Mr. de Jong’s tenure, it remained unacceptably high until the end of his tenure.”

BC Green Party leader Sonia Furstenau said the report “demonstrates that sophisticated criminal organizations ran circles around the provincial government in broad daylight.”

“While Mr. Cullen found no evidence of corruption in the provincial cabinet, it is deeply concerning that money laundering operations were able to embed themselves throughout the provincial economy. The report found that the B.C. government did not take sufficient action to address the issue and safeguard the public, despite the evidence before them,” she said.

“A ‘failure of will,’ as Mr. Cullen summarized, is an indictment no government should leave as their legacy,” said Furstenau.

Eby said a roadmap of solutions is ahead of him with 101 recommendations from Cullen he will now examine.

“I don't believe the right people have been held accountable,” said Eby, citing the collapse of the key 2015 casino investigation by RCMP dubbed E-Pirate.

To that end he said the federal government’s response to money laundering must improve.

“I'm very enthusiastic about [Cullen’s] willingness to explore ways in the province can extend our reach into areas where the current federal system is letting us down,” said Eby.

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