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Critics say public inquiry into money laundering would have more clout than investigations

|Written By Jean Sorensen
Critics say public inquiry into money laundering would have more clout than investigations
Lawyer Christine Duhaime says a public inquiry would mitigate the public's wrongful perception that lawyers are indifferent to money laundering.

British Columbia needs more than a tip line or individual inquiring into money laundering, say members of the legal community who are supportive of a full-blown public inquiry that will wield more clout and answer many of the questions lingering in the public's mind.

Christine Duhaime, a Vancouver lawyer specializing in counter-terrorism financing and anti-money-laundering law, says a public inquiry has the ability to take sworn testimony, call witnesses and subpoena individuals. A money-laundering tip line, such as the one initiated by B.C., does not lend the same credibility to the information received.

The B.C. government has asked lawyer Peter German to conduct fact-finding investigations into money laundering with the first report on casinos issued 18 months ago. Attorney General David Eby has appointed German to conduct a second investigation into real estate, luxury cars and horse racing. However, in these investigations, there is no onus on individuals to co-operate and supply information to German.

Supporters of a public inquiry say it would also identify where laws may be lacking, how money laundering is tied to illicit drugs and its impact on real estate.

Government watchdog IntegrityBC wants more scrutiny of laws that apply to money laundering. Executive director Dermod Travis says a public inquiry should have been called a year ago.

"We need to look at how the safeguards failed and allowed money laundering to happen," he says.

It is government's role to fix the legislation and look at other jurisdictions such as the United Kingdom, which has "justification of lifestyle legislation," he says.

Duhaime says a public inquiry would also mitigate the public's wrongful perception that lawyers are indifferent to money laundering. It would give the profession an opportunity to publicly explain laws and rules that bind lawyers when dealing with clients.

"There is the public perception that lawyers are the facilitators," she says, as they "are the ones handling the funds and creating the companies."

She says the public could hear how the legal profession exercises due diligence in screening clients using criteria set down by professional regulatory bodies and also how lawyers are bound by a client-lawyer confidentiality requirement that has been sustained in the courts.

A public inquiry, she says, will also generate information that would better inform lawyers regarding the scope of money laundering and potential problems that can occur, as well as provide government and regulatory bodies with some insight as to where new laws may be required.

The Law Society of B.C. said in an email: "As the regulator of the legal profession in B.C., the law society would welcome the opportunity to contribute to a public inquiry or to any other avenue of research Attorney General Eby believes would be effective in combating money laundering."

Eby has said that he has not ruled out a public inquiry into money laundering, a position backed by B.C. Minister of Public Safety and Solicitor General Mike Farnworth and also favoured by Premier John Horgan, but reports indicate the holdback is a concern over cost. 

Also, the government is awaiting the results of two investigations. As well as German's report, Finance Minister Carole James has appointed a three-member expert panel to look into money laundering in the real estate industry with a focus on gaps in compliance and enforcement.

B.C.'s largest union, which represents 78,000 individuals, is pushing for a public inquiry. Stephanie Smith, president of the B.C. Government and Service Employees' Union, says, "Anything that undermines the public trust jeopardizes the public service and places the infrastructure in crisis."

The union members throughout the province have expressed concern regarding the impact of illicit funds on gaming, opioids and real estate prices. BCGEU members are first responders to opiate victims, work in the gaming sector and are facing rising housing costs throughout the province.

"We need to know how these things are inter-related and how we have ended up in this position — and what we need to do to make sure it doesn't happen again," says Smith.

The BCGEU, through its website, has started a campaign to push for a public inquiry.

Bradford Morse, dean of Thompson Rivers University law faculty, says the first German report placed a significant amount of information out in the public realm, causing many individuals to speak out.

"So, it is now a public issue," he says, but the question remains whether an inquiry will deepen the knowledge and validate the associate cost of what is an expensive process.

Morse says there is enough ground to move forward. "There is enough concern that it is a wise political decision to proceed, but there is also substantive reason to proceed," he says, in that the public has unanswered questions as to how illegal moneys affect local crime, real estate, drugs and gaming.  

"What is the spider's web of connections?" Morse says. Money laundering does not stop at borders, and a question that also needs resolving is whether a national inquiry should be held. Few provinces have matched B.C. in investigating and airing the information that has come out of the German report, he says.  

Duhaime acknowledges that public inquiries can be expensive. "But it is a cost that should be borne," she says. A public inquiry would clear up many of the public misconceptions, including those relating to Chinese funds. She says the public unjustly suspects every Chinese national now if they live in an expensive house or have luxury items.

"It would clear the air," she says. 

  • Problems and Solutions

    Concerned Canadian
    Will Duhaime explain how law societies fought the government in court to remove themselves as reporting entities to FINTRAC as well as to enshrine through jurisprudence that privilege extends to activities that have nothing to do with legal advice? Will Dermod Travis explain that Canada has a Charter of Rights that precludes effective legislation along the lines of the UK’s “unexplained wealth orders”? Will David Eby explain that with the ruling in R. v. Jordan, the Supreme Court made it very difficult for prosecutors to bring money laundering cases to court due to the complexity of the cases? The problems and potential solutions are well known - but would the solutions be palatable to Canadians?




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