Former BC Liberal premier Christy Clark told the Commission of Inquiry into Money Laundering in B.C. Tuesday she was never advised her government had raised table bet limits in casinos from $5,000 to $100,000 over the three years following her 2011 designation as premier.
Clark asserted she, as premier, had no involvement in the day-to-day activity of Crown corporations such as the BC Lottery Corp. (BCLC), which manages government-regulated casinos.
When asked by commission counsel if she would have been surprised to hear of this change, while in office, Clark replied: “I don’t gamble, so I don’t know what’s normal in a casino.”
Clark was called to the commission to explain her role in regulating casinos.
At issue is whether Clark’s government, between 2011 and 2017, could have wilfully ignored money-laundering concerns – mentioned publicly and internal to BCLC – in order to augment provincial revenue.
“What government does is always having to balance revenue concerns against other issues,” Clark said. She added, however, “Never did we say revenue considerations would come before stopping criminal activity.”
Although stating she generally delegated responsibilities to cabinet ministers in charge of BCLC, Clark did cite some specific examples of government action to address those concerns, such as cash sourcing, banning gamblers and digital gambling accounts, which were considered novel to the gambling industry at the time.
Clark was most specific about establishing an RCMP task force called the Joint Illegal Gaming Investigation Team (JIGIT), which she initially said formed in 2015 but was later corrected by B.C. government lawyer Jacqueline Hughes that, in fact, it was created in 2016.
Commissioner Austin Cullen runs the public inquiry and senior commission counsel Patrick McGowan conducted the two-hour examination of Clark, who spoke alongside her lawyer Robert Cooper of McEwan Cooper Dennis LLP.
The commission has never acknowledged receipt of cabinet documents from the BC Liberals, the release of which were a matter of public scrutiny before the inquiry launched.
Under Clark, three ministers controlled BCLC under their ministries – first Shirley Bond, then Rich Coleman and finally Michael de Jong. .
Asked by McGowan what steps she took to address money laundering concerns widely cited in media back in 2011, Clark said a casino money laundering report (the ‘Kroeker Report’) was commissioned before her designation as premier in 2011 and landed on Bond’s desk shortly thereafter.
Clark said she was aware of those early media reports but took no steps to verify the claims.
“Yes, money laundering is an issue in B.C., no question about it. That’s why we commissioned the Kroeker Report,” she said.
Clark initially said JIGIT was created in “short order,” but McGowan pointed out the gap in years between the Kroeker Report and JIGIT’s establishment.
“When you’re involving the RCMP… it took a little bit of time to put all that together,” replied Clark, adding, “I wouldn’t accept the assumption it was delayed.”
Clark said government does not control the daily operations of the RCMP.
“The daily work of law enforcement was something I wasn’t engaged in.”
Clark was premier during a time, the commission has heard, that saw a significant rise in large and suspicious casino transactions allegedly linked to transnational organized crime. Between 2011 and 2015, the inquiry has heard of a gap in RCMP enforcement on the issue. The provincial government is supposed to chart a path for the provincially dedicated police force from Ottawa.
The commission has heard of how it became routine for suspected loan sharks and organized criminals to be funding Chinese gamblers exclusively with bags of $20 bills worth hundreds of thousands of dollars. This amounted to tens of millions of dollars worth of suspicious cash transactions being reported monthly by casinos, although for years they excluded buy-ins under $50,000, in apparent violation of federal law.
Clark said she was unaware of organizational friction between regulator Gaming Policy and Enforcement Branch (GPEB) and BCLC. McGowan raised the spectre of a conflict of interest Clark set by having the same ministry oversee both BCLC and GPEB.
Clark said it was only two weeks ahead of JIGIT’s launch in April 2016 that she was briefed on a spike in suspicious transactions. By this time the RCMP was a year into an investigation into transnational organized crime, called E-Pirate.
“It was the first time I heard about it from within government,” said Clark, meaning she wasn’t briefed on extensive reporting from GPEB casino investigators who had been warning that suspected drug cash was making its way through casinos since 2008.
“Did you ask whether this money that was reported as suspicious was accepted by casinos ... or whether it was refused?” McGowan asked. “Did you make that inquiry?”
“I didn’t,” Clark said. “What we did instead was create JIGIT.”
McGowan asked Clark for her opinion on taking campaign donations from casinos to fund her election and whether it was a conflict of interest given she was regulating them. She replied that doing so was no different than taking money from other industries. (In 2018 the BC NDP banned corporate donations).
Clark also oversaw an era of skyrocketing housing prices unique to Metro Vancouver – another matter the provincial inquiry is looking into.
“I can say no one … from anywhere in government or law enforcement ever suggested [the] rise in housing prices was the result of money laundering,” replied Clark.
She said low interest rates, job growth and immigration were the key reasons for Vancouver’s unique rise in housing prices between 2015 and 2017.
“I’d be careful drawing the conclusion money laundering would be the source of that growth,” said Clark, who took government on trade missions of China that included promotion of real estate.
Clark said her government implemented the foreign buyer’s tax and ended self-regulation of the real estate industry – what she then called “shady” practices, such as shadow flipping by realtors. She said her government charted a path for the B.C. speculation and vacancy tax, which she added was a good idea.
Clark’s testimony ran just over two hours. Inquiry participant BCLC posed no questions to Clark.
Near the end, Transparency International Canada questioned Clark on her views on hidden beneficial ownership structures.
“It was something government had talked about,” said Clark, adding those discussions may have assisted the BC NDP in its work in creating a beneficial property ownership registry.
The inquiry has heard from financial crime experts on how beneficial ownership structures can obscure foreign ownership of land in Canada and benefit both local and international criminals intending to wash proceeds of crime through real estate.
The inquiry is mandated to make recommendations for provincial regulators, such as BCLC and GPEB, as well as the regulation of real estate and luxury goods. It is not a federal inquiry and has limited insight into federally regulated financial institutions, which are known to facilitate the bulk of global money laundering.
The inquiry has heard testimony from ex-RCMP officers that money laundering in B.C. is a threat to national security, although the inquiry has not explored this aspect.
