Scroll down for schedule of Cullen Commission’s hearings on B.C. money laundering
By AWN Staff / News Analysis
The authorities in British Columbia say they want to determine the nature and the extent of money laundering in B.C. casinos. Accordingly, a special panel called the Cullen Commission, named after Justice Austin Cullen, has been formed for this task and will hear preliminary opening statements Feb. 24. However, the main hearings are well down the road and won’t start until September of 2020. And apart from some exploratory meetings that will happen in the latter part of the spring, the Commission’s final report, consisting of recommendations, is not expected until May of 2021.
Those identified as “stakeholders,” which are those participants granted formal “standing,” will be the ones heard over the course of four days beginning Feb. 24 at the Federal Court of Canada in Vancouver, B.C. Then, beginning on May 25, the Cullen Commission will conduct an overview of money laundering and regulatory models, including determining the extent of such illegal activity in B.C.
SHOULD WE LOOK BEYOND B.C.?
But there are several questions to ask. One question is whether money laundering has reached well beyond British Columbia and into Ontario, the most populated province. While casinos are in many respects an ideal place for laundering money, Ontario has about 73 casinos (with just over 32,000 slot machines).
That’s twice as many casinos as B.C., which 36 casinos. And Ontario has more than twice as many slots as B.C.—32,000 to 13,000. Quebec, for the record, has about 10 casinos with 6,600 slots.
A more comprehensive assessment of casino money laundering would be in order, taking all provinces with casinos into account. That could be coordinated with a comprehensive look at the overall impact of casino gambling itself. Casinos, as AWN has learned and documented, are very insulated institutions where a tight lid is kept on internal scandals or illicit activities in order to avoid negative publicity of any kind.
But when it comes to positive publicity, there’s no holding back.
Ontario Lottery & Gaming (OLG) doles out plenty of money to heavily advertise gambling establishments and lottery tickets in broadcast and print media outlets. And with gambling’s heavy presence in Ontario—remember the massive Woodbine expansion and another casino complex going up in Pickering—those ad dollars comprise a sizable share of revenue for the mainline media. No one can deny that would tend to discourage most negative publicity about casinos.
On that note, recall that, until fairly recently, media mogul Paul Godfrey was the head of Post Media and, at the same time, chairman of the OLG—a clear conflict of interest. But that was very illustrative of the rather cozy relationship between gambling interests and media.
MONEY LAUNDERING AND BEYOND
And while laundering still needs to be properly probed, there are several other things to consider, including physical (sometimes sexual) assaults against casino employees by unruly patrons, and often-hazardous working conditions for floor employees in a sweatshop-like environment, although that varies from casino to casino.
One thing’s for sure: Casinos, tribal or non-tribal, are not just another private business; they are unique in many ways and that includes a working environment where being a whistleblower about internal crimes and wrongdoing is, by and large, highly discouraged. The average casino floor worker is much more concerned with keeping his or her job than with reporting on questionable activities on the job.
And casinos—perhaps more than any other form of entertainment—can adversely affect non-gamblers and all of society. A clear-cut example being probed by the Cullen panel is the way that B.C. money laundering tends to inflate the housing market, affecting the affordability and availability of mortgages and rental homes for a large part of the population.
THE REVEALING CASE OF PENN NATIONAL
A 2007 memo from Penn National, the American-based casino management company which, at the time, managed Casino Rama near Orillia, Ontario [see image of it below] suggested that employees who might want to blow the whistle would be discouraged from coming forward.
And, as former Casino Rama employees have told AWN, it was Penn National which would decide if and when the Ontario Provincial Police (OPP) would get involved—which was almost never. Penn National was effectively trusted to police itself.
In the memo, Penn National’s Vice President of Legal & Administration Jacquie Castel noted:
“Our staff also should not be attending the OPP office, unless they are specifically invited to do so by the OPP . . . . It is a serious criminal offense (obstruction of justice) to willfully interfere, or attempt to interfere, with a police investigation, punishable on indictment with a prison term of up to two years.” Notably, this 2007 Memorandum was (copied, or cc’d) to “D/Sgt. Bill Frechette Manager Casino Enforcement Unit OPP.”
Did you get that? The memo strongly suggests that casino staffers / workers going to the OPP are potentially committing a criminal offense. That could include whistleblowers who might have witnessed money laundering or other illicit activities.
RCMP’S SELECTIVE ENFORCEMENT
A key question regarding the Royal Canadian Mounted Police is: Did the RCMP violate the Constitution by operating in discriminatory fashion? What we mean is that the RCMP, in correspondence with AWN editors, has played both sides of the fence by indicating that some Canadian casinos fall under the RCMP’s jurisdiction and some do not fall under its jurisdiction.
Thus, the very same RCMP that is reportedly investigating B.C. money laundering has said that Ontario casino matters are not under its jurisdiction—a claim the RCMP made after the national police agency gained knowledge of Penn National and the OPP obstructing whistleblowers in Ontario.
AWN Associate Editor John Devine also contacted Canadian-based FBI agent Jason Albert (working out of the U.S. Embassy in Ottawa) with various concerns about Ontario casino corruption, especially whistleblowers being obstructed. But although Penn National is a U.S.-based company, Albert said the matter was “not his jurisdiction” and passed the matter on to the RCMP—which also claimed the casino concerns AWN raised were not its jurisdiction.
So, it was tough to take Alcohol and Gaming Commission Senior Communications Advisor Ray Kahnert totally seriously during his recent interview with Jason D’Souza, host of the CBC’s All Points West. When asked how Ontario’s casino regulation differs from B.C.’s, Kahnert replied:
“The Alcohol and Gaming Commission of Ontario (AGCO) is an independent Crown agency. They report to the Ontario attorney general. We have the legislation in place to give us authority. Within the structure of the AGCO is a bureau of the provincial police who are able to respond immediately to any kind of illegal activity happening within a casino. When casinos opened in Ontario … the policy decision was made to establish a separate Crown agency responsible for regulation. We take a modernized approach to the regulation of gaming in Ontario.”
We at AWN don’t have that level of confidence in Ontario’s policing of casinos. Part of our skepticism stems from the above-noted Penn National memo; and part from AWN Associate Editor John Devine’s experience as a (now-former) casino worker, which during his employment included a visit to his residence by the OPP to inform him to stop blowing the whistle about alleged breaches of labor laws and other transgressions at the casino at which he worked.
While Devine continued receiving replies to his letters—which all informed him that casinos were “not their jurisdiction” (if he received a reply at all) he soon learned that whistleblowers were the ones being policed, not the casinos.
WILL CULLEN PANEL TAKE A BROADER LOOK?
All things considered, we hope the Cullen Commission does a thorough job and makes some badly needed recommendations to eliminate or drastically reduce the Asian-based laundering in B.C.
But a broader look at the casino culture would be much better while even more casinos—comprising more connections for money launderers, gambling addicts etc.—are being built at a time when Canada has staked a lot, perhaps too much, on the gambling industry, even going so far as to marry gambling with professional sports and raise the stakes even more.
Canadians need to remember that every dollar spent at a casino is one less dollar spent at local restaurants, craft and clothing stores and all manner of wholesale and retail outlets that support our downtowns.
Still, for the record, here’s the scheduling and contact information to enable you to have some input for B.C.’s money laundering investigation. In the meantime, feel free to share this AWN article with officials and area media from B.C., Ontario and from all the other provinces.
HERE IS THE B.C. SCHEDULE
Official inquiry dates—Feb. 24-28, 2020
- Commission to hear participant opening statements.
May 25–June 26, 2020
- Counsel considers overview and extent of money-laundering in the province.
Sept. 8-Dec. 22, 2020
- Main hearings to address specific issues:
- Gaming, casinos, horseracing
- Real estate
- Professional services, including accounting and legal
- Corporate sector
- Financial institutions and money services
- Luxury goods
- Cash-based businesses
- Trade-based money laundering
- Other sectors
- Asset recovery
- Enforcement and regulation
- Government response
- Other jurisdictions’ approaches
The commission’s role is to investigate and determine where and how money laundering is taking place in B.C. According to official sources, it is not able to convict or find liability but is expected to issue recommendations.
The official sources added: “The Commission of Inquiry into Money Laundering in British Columbia is a public inquiry, serving the people of British Columbia. We are independent from the government and other agencies. We want to engage with the people of British Columbia throughout the Inquiry.”
Those sources concluded: “If you have information about money laundering activities, we would like to hear from you. Money laundering is, by its nature, secretive and hidden, but this public inquiry represents an opportunity to shed light on this important topic. If you have information that you would like to provide to Senior Commission Counsel, please email: firstname.lastname@example.org.”
Commission Direct Contact Information:
Commission of Inquiry into Money Laundering in British Columbia
PO Box 10073
601 – 700 West Georgia Street
Telephone: (236) 468-1772
Toll free: 1-855-788-3661
Fax: (604) 669-1207