Premier John Horgan says a public inquiry may be needed to determine how money laundering infiltrated B.C. casinos, a scourge the head of a recent review warned could seep into the real estate market.
At a news conference Wednesday, Mr. Horgan said he had not ruled out an inquiry that would assign blame for the conditions that former RCMP deputy commissioner Peter German said allowed criminals to turn casinos into “laundromats” for illicit money.
“The findings of the German report when it comes to money laundering in casinos was absolutely horrifying,” he said. “… There are a whole bunch of things I would like answers to over the past 16 years,” he added, referring to the period of time in which the BC. Liberals governed the province.
The government last week released a report that found that B.C.’s dysfunctional regulatory regime for casinos allowed large-scale transnational money laundering by organized crime. The report, written by Mr. German, said money laundering threatened to trickle into other sectors of the economy. He called for further investigation into the vulnerable areas, including real estate.
Mr. Horgan said he had discussed the issue with Finance Minister Carole James and Attorney-General David Eby. He said there would be some direction on how the government intends to proceed in a few weeks.
Asked about a possible public inquiry that would assign blame, Mr. Horgan said, “I haven’t ruled that out.”
He said he, Ms. James and Mr. Eby share concerns about money laundering in real estate.
Mr. Eby in an interview said he is working with the Finance Minister on the terms of reference for the next phase of the review. He said the focus of the casino review was easier to establish.
“We had lists of clients and amounts, and video surveillance, and all these kinds of pieces that made it much easier to define the scope of the issue and what needed to be done,” he said. “Real estate is more challenging, and so we want to take the time to get it right.”
When asked if he believed money laundering had affected real estate prices, Mr. Eby said that question would be part of the review.
“That’s one of the questions we’ll be asking in this review, is how much of an influence can we understand that this has had on the market and what is the extent of the problem that we have,” he said. “Is this a handful of people, or is this more widespread than that?”
Cameron Muir, chief economist with the B.C. Real Estate Association, said everyone is in favour of cracking down on money laundering. However, he said he does not believe it is driving the real estate market.
The amount laundered through Lower Mainland casinos is unknown, but Mr. German has said that it was well in excess of $100-million over a decade.
Mr. Muir said the total dollar value of residential sales in Greater Vancouver last year was $37-billion.
“This is not having a major impact on the housing market,” he said in an interview.
Mr. German’s report found criminal organizations linked to China, Colombia, Mexico and elsewhere had taken advantage of Vancouver-area casinos, exploiting gaps left wide open as different agencies responsible for gambling and regulation waged “internecine” turf wars.
The report made 48 recommendations and the government last week said it had begun implementing all of them.
Andrew Weaver, leader of the BC Green Party that is supporting the NDP government, in a statement wrote he was pleased the Premier was not taking any options off the table when it comes to money laundering.