B.C. Lottery Corp. relents after 9-year battle to keep money laundering records secret

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After fighting the CBC for nine years over the release of money laundering records, the B.C. Lottery Corporation is finally relenting.

After three trips to court, a full hearing before B.C.’s information and privacy commission, and another hearing coming up, the lottery corporation now plans to go to court to get permission to release the documents to the CBC. 

The records relate to reasons why Canada’s money laundering watchdog, FINTRAC, imposed its largest ever fine — $695,750 — on a provincial gaming corporation in 2010. 

Access delayed is access denied

“I find it a little bit horrifying that level of resource investment has to go into getting access to this kind of record,” said Mike Larsen, president of the B.C. Freedom of Information and Privacy Association.  

“We firmly believe that access delayed is access denied,” he said.

The B.C. Lottery Corporation said it is unable to comment on its change of heart given the matter will be before Federal Court, and is currently before the information and privacy commissioner.

However, B.C. Attorney General David Eby said he made his wishes about transparency known to the new board at BCLC. 

“I think the release of these documents — and I hope it will come urgently — is long overdue,” Eby said.

Watch CBC go undercover to ‘launder’ $24,000 at two B.C. casinos in 2008:

Back in 2008, CBC went undercover and ‘laundered’ $24,000 at two BC casinos to show how easily it could be done. 2:12

Long and winding road

In 2010, FINTRAC conducted a major audit of BCLC. The results weren’t good — and it levied its major fine on BCLC. 

BCLC is required under money laundering legislation to send to FINTRAC reports of large and suspicious cash transactions that take place in B.C. casinos.

The details of what FINTRAC found were never released. 

Video released by B.C’s attorney general shows casino customers bringing in bags of cash to one of B.C.’s casinos in an apparent act of money laundering. (B.C. Attorney General)

At the time, BCLC said the problems related to late filing of reports due to technical glitches and human error. 

1,285 problem reports

Two years ago, a report into money laundering at B.C. casinos by former RCMP deputy commissioner Peter German confirmed that the fine related to deficiencies in more than 1,285 reports. But other details — such as what FINTRAC’S audit report said, and its reasons for finding BCLC in violation — stayed secret.

In 2011, CBC filed a freedom of information request to obtain the records. Their release was vigorously opposed by BCLC. CBC took the case to the freedom of information commissioner. In a pair of rulings, the office ordered them released. 

BCLC quickly petitioned the B.C. Supreme Court to overturn the commissioner’s ruling. CBC eventually withdrew from the case. 

B.C. Lottery Corporation obtains confidentiality order

In the meantime, BCLC was also fighting FINTRAC’s fine in Federal Court. As that proceeding was underway, CBC tried to obtain the records from the Federal Court, but BCLC obtained a confidentiality order over them.

CBC fought the confidentiality order, but was shut down at the trial division and in the Federal Appeal Court.

In 2017, the Federal Court case came to an end. It ended with FINTRAC withdrawing its case against BCLC — the case was never argued in open court. By then, FINTRAC felt BCLC was meeting its legal requirements to file money laundering reports properly. 

But CBC still had no access to any of the records. 

CBC tries again

In 2018, CBC refiled a request for the records — to BCLC and the Ministry of the Attorney General. 

The Ministry of the Attorney General did release some records, but any information of interest was blacked out. When Eby was asked about his own ministry blocking the release, he said “it’s been almost absurdly complex … British Columbians deserve to see this information.” 

B.C. Attorney General David Eby released an independent review of anti-money laundering practices in Vancouver in 2018. (Darryl Dyck/Canadian Press)

Since 2018, BCLC has refused the release for many reasons, citing harm to law enforcement, solicitor-client privilege, and interference with government relations. Along the way it added and dropped grounds for refusal. But it always cited the confidentiality order obtained from the Federal Court back in 2012. 

‘Obfuscating … not penalized’

Changing the rationale for withholding records is often a method for delaying access, Larsen said.

“Simply obfuscating, trying to do whatever is possible to withhold records and frustrate the process until the applicant gives up — this is something that is not really penalized in the current system, and should be,” he said.

After a four-year fight, CBC finally obtained 3,000 records relating to criminal activity in B.C. casinos in 2008, under freedom of information legislation. (CBC)

‘Commendable’ CBC pushed back

Now with another hearing before the freedom of information commission coming up, the B.C. Lottery Corporation says it will ask the Federal Court to lift the confidentiality order over the records. It’s not known when the hearing will take place, so there is no date set for the long-awaited release of the documents.

“If it wasn’t an organization like CBC pursuing this, it wouldn’t have been pursued, It’s frustrating the system requires this immense allocation of resources to push against government secrecy,” Larsen said. 

“It’s commendable you pushed back.”

CBC Vancouver’s Impact Team investigates and reports on stories that impact people in their local community and strives to hold individuals, institutions and organizations to account. If you have a story for us, email [email protected].

 



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