'They didn't want to listen': Fired gambling inspector feels vindicated by report
Former senior director of investigations for regulator was fired after sounding dirty money alarm
It's been a bittersweet week for Joe Schalk.
As the former senior director of investigations for B.C.'s Gaming and Policy Enforcement Branch, the 69-year-old saw his old office get a shout-out from Peter German for "nailing" the issue of money laundering in casinos back in 2012.
At that time, the staffers asked questions that seem — in retrospect — obvious: like "who has $200,000 in $20 dollar bills wrapped in elastic bands in $10,000 bundles?"
But Schalk has also had occasion this week to revisit the thanks they got for raising alarm bells. And for doing his job.
In 2014, he was fired without cause.
"I'd worked for 50 years, I'd never been fired or laid off or anything from any job. And I took my work very serious and I was totally committed to it," he says.
"And to be called in one day and told I wasn't coming back in the office and I couldn't even say goodbye to many of the people that I had been responsible and directly involved in hiring — yeah, it was a painful experience."
'Something had to be done'
German's report doesn't name names, and it doesn't place blame or find fault with any individuals.
But in the face of resounding silence from the politicians and bureaucrats who ran the B.C. Lottery Corporation and the ministry responsible for gaming at the time, it's worth bearing in mind that their decisions had real life consequences.
As German points out, money laundered through the casinos fuelled the opioid epidemic and the housing affordability crisis that plague Greater Vancouver to this day.
Schalk joined the gaming enforcement branch in 2002 after a long career in law enforcement. He says he found the work fulfilling.
"We said way back in 2009, stop the money from coming in. Government, BCLC, the service provider all can do that," he said.
"We were insistent that something had to be done. And I think we got to the point where they didn't want to listen to us anymore."
German's report details a "toxic" split which emerged between individuals within BCLC, which oversees casinos, and the gaming branch, which regulates gambling.
As the former RCMP deputy commissioner explains it, BCLC's response to an expose by the CBC was to focus on forcing casino patrons away from cash, in the belief that "if the money came from a bank, it must be ok."
'Stopped from doing what I'd hoped'
But the twenties still kept rolling in.
The people in Schalk's office believed the proceeds of crime were being laundered through the casinos. But BCLC said that couldn't be proven. According to German's report, the two sides all but stopped talking.
Then, in April 2014, a Ministry of Finance report concluded the relationship between the Gaming Enforcement and Policy Branch and the lottery corporation was "so adversarial it has resulted in dysfunction in several levels within the division and BCLC.
The report recommended a review of the branch's "priorities, leadership practices, quality of files and organizational culture."
As German points out, that was despite the office winning a series of ministerial workplace awards.
"The report was never provided to the persons who were criticized within it, nor were they afforded an opportunity to respond," says German's report.
Instead, in December 2014, Schalk and the executive director of investigations were both called to an early morning meeting and fired. Three other people, including the person who led the money-laundering strategy, were reassigned.
"It was like I got stopped from doing what I'd hoped we could accomplish prior to me retiring," he says.
"I hung in there past what would normally be retirement age at 65, hoping that we would finally resolve to stop the money from coming in. My true hope was that we could do that."
'Never did stop beating that drum'
Schalk says he's pleased to see light finally shone on the issue of money laundering and supports many of German's recommendations, which he says fall in line with what his office had hoped for all along.
Those include the establishment of a designated policing unit.
He plans to read the report in its entirety during the next few weeks.
He's happy as a retiree. But he's not done asking questions about casinos, money laundering — and what exactly happened. Neither, he says, should the media or the public.
"There are people that were directly involved in this that made decisions that they knew were not for the betterment of trying to solve this huge amount of suspicious cash coming in," he says.
"There were copious amount of reports that went in and meetings that were held. And we never did stop beating that drum on the investigation side."