Casino management ignored workers' warnings about money laundering, B.C. union head charges

The president of one of B.C.'s biggest labour unions is asking the province's public inquiry on money laundering to consider how illegal money has affected the lives of everyday working people.

Stephanie Smith, president of the B.C. Government and Service Employees' Union, told the Cullen Commission of Inquiry into Money Laundering that union members have been dealing with the problem for decades.

That includes dealing with criminals trying to clean illegal cash through casinos or facing the ever-rising home prices that have been linked to that same cash.

"Workers in some casinos have faced a visible organized crime presence for at least two decades," Smith said in her opening statements on Monday.

"All too often, casino management has ignored these issues or even encouraged them."

B.C. Supreme Court Justice Austin Cullen sits at the head of the commission, which will hear opening statements this week from stakeholders with formal standing in the inquiry.

Smith said she'd like to see the commission tackle how to protect whistleblowers, including former casino employees who've gone to the media with what they've seen at the gambling tables. She also wants to hear about whether senior management knowingly ignored warnings of trouble, as well as the impact on B.C.'s housing market.

Smith said she's also interested in presenting evidence about how new rules meant to head off money launderers are working in practice.

"Our members report that in many cases management are simply going through the motions … but making it clear to employees that these are unwanted requirements," she said.

But the commission also heard from those who believe the scale of the problem in B.C.'s casinos has been exaggerated.

Smith was immediately followed by William Smart, counsel for the B.C. Lottery Corporation, who argued that much of the public perception about widespread money laundering is "misinformed."

"Much has changed in the last 20 years in terms of gaming in this province," Smart said.

Smart said the BCLC has brought in "effective measures" to counter money launderers, including banning certain criminals from casinos and offering training for identifying suspicious transactions.

Those sentiments were shared by Mark Skwarok, counsel for Great Canadian Gaming Corporation, which operates 10 casinos and gambling facilities in B.C.

Skwarok said the BCLC has provided diligent oversight, and argued that many public criticisms of Great Canadian have been "factually unfounded or have been overstated."

Monday's proceedings kicked off with opening statements from lawyers representing both the federal and provincial governments who gave a primer on the systems that are now in place or will soon be in place in an attempt to make B.C. a less attractive place for those trying to hide the proceeds of crime.

The morning's proceedings included a dictionary's worth of acronyms for all the government bodies, working groups, police task forces, international partnerships and pieces of legislation that have been involved in trying to fix the problem — including FSOC, GPEB, PCMLTFA, FINTRAC, IIGET, JIGET, CSIS, CBSA, CFSEU, CRA, PPSC, and FATF, to name just a few.

The $7-billion problem

The commission was announced last year in a response to a series of reports that attempted to capture the alarming extent of B.C.'s problem, including estimates that more than $7 billion was laundered in the province in 2018.

The role of the commission is to determine where and how money laundering is taking place, why it's been allowed to happen and whether it can be prevented. The commission doesn't have the power to convict or find liability but is expected to issue recommendations in its final report in May 2021.

Others scheduled to make opening statements this week include representatives of the legal profession and the casino, real estate and luxury car industries.

Another session, beginning May 25 and running five weeks, will deal with an overview of money laundering and regulatory models, as well as the extent of illegal activity in the province.

The main hearings begin in September and will deal with more than a dozen identified areas of illegal activity in the B.C. economy, from gambling transactions on the floor of some of Metro Vancouver's biggest casinos, to cash transactions for luxury goods and online trading of cryptocurrency.