British Columbia

Allegations B.C. prioritized gaming revenue over money laundering are 'offensive,' former minister says

A former B.C. finance minister has denied allegations the government deliberately ignored the growing issue of money laundering in casinos because they were more concerned about protecting revenue, describing claims to the contrary as "offensive."

Mike de Jong says he 'never' saw anyone wilfully ignore issue of money laundering

Then-Liberal house leader Michael de Jong speaks during a press conference from the B.C. Legislature in Victoria on June 26, 2017. De Jong told the Cullen Commission Friday the former government never prioritized gaming revenue over a crackdown on money laundering. (Chad Hipolito/The Canadian Press)

A former B.C. finance minister has denied "offensive" allegations the government deliberately ignored the growing issue of money laundering in casinos because they were more concerned about preserving gaming revenue.

Mike de Jong told the Cullen inquiry Friday he believed the province made "serious attempts" to better understand and address the organized crime while he was responsible for the gaming portfolio from 2013 to 2017.

"It has been very frustrating to, candidly, hear commentary that the government was disinterested in the subject — or the minister responsible was disinterested in the subject — because fiscal considerations took precedence. That's just not true," he said.

"I never saw anything to suggest that people weren't interested in addressing this or were trying to turn a blind eye. I have had people on the phone in the last two years in tears because of the suggestion that that's what happened," he said.

De Jong is among a number of senior B.C. politicians to appear this week before the Cullen Commission, which is investigating the scope of money laundering in the province and how officials can better address the issue in future.

The public inquiry has heard gaming investigators suspected for years gangs were offering large cash loans to high-rolling gamblers as part of money laundering schemes in casinos across the Lower Mainland.

It has also heard allegations the province — particularly de Jong's predecessor, former minister responsible Rich Coleman — was well aware of the problem but was more concerned with gaming revenue than tackling organized crime.

The River Rock Casino Resort in Richmond, B.C., is one location where gamblers allegedly laundered money for organized crime. (Evan Mitsui/CBC)

The  British Columbia Lottery Corporation (BCLC) typically contributes around $1.4 billion to provincial revenue, a portion of which is distributed to charities, local governments and Indigenous communities.

De Jong said he did keep a close eye on BCLC revenue during his time as finance minister, but not because of backwards priorities.

"It was important to know ... what [BCLC's] revenue projections were and, yes, I was pretty hard-assed about the expenses," he told the commission's lawyer, pausing to apologize for the phrase.

"But ... I was harsh with every branch of government about managing expenses to the extent possible," he continued.

Seriousness of issue 'crystallized' in 2015: minister

De Jong said the enormity of the money laundering problem "crystallized" in his mind during a meeting with BCLC and its regulator — the Gaming Policy and Enforcement Branch, or GPEB — in the fall of 2015.

It's been established BCLC and GPEB had a testy relationship filled with infighting. But during that meeting, de Jong said, the teams saw eye-to-eye and spoke "fairly passionately" about the need for police intervention in casinos.

"That clearly made a significant impression on me at the time," de Jong said.

De Jong raised the concerns with then-premier Christy Clark. The Joint Illegal Gaming Investigation Team (JIGIT) — a division of B.C.'s anti-gang police agency — was subsequently launched.

Premier Christy Clark looks on as then-finance minister Michael de Jong waits to deliver the provincial budget at Legislative Assembly in Victoria on Feb. 21, 2017. De Jong told Clark about a rise in reports of suspicious cash transactions in Lower Mainland casinos in 2015, leading to the creation of an integrated task force. (Chad Hipolito/The Canadian Press)

In her own testimony Tuesday, Clark said the alarm from De Jong was the first she'd heard of the rise in money laundering from within her government. By then, reports of suspicious cash transactions were at "an all-time high."

Interim Liberal Leader Shirley Bond, another former minister who was responsible for gaming in 2011, testified Thursday she implemented nine recommendations from a government anti-money laundering report, but set aside the 10th and final recommendation: the task force.

WATCH | Documents obtained by CBC News in 2011 showed senior RCMP investigators warned the province about money laundering in B.C. casinos:

B.C. casino warnings

BC

10 years ago
3:19
Top-level RCMP officials had warned the solicitor general's office about money laundering at B.C. casinos, the CBC's Eric Rankin reports 3:19

More cabinet ministers next week

Former minister Coleman and former solicitor general Kash Heed are scheduled to appear before the inquiry next week. Attorney General David Eby will also testify.

The government launched the Cullen Commission in 2019 after three reports detailed how hundreds of millions of dollars in dirty cash had distorted B.C.'s luxury vehicle, real estate and gaming sectors over a decade and a half. 

One report in 2018 said casinos had become "laundromats" for proceeds of crime, with more than $100 million likely cleaned in B.C. since the early 2000s.

The Cullen Commission's final report is due Dec. 15.

With files from Justin McElroy

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