Alas, the Emperor has no Clothes…

In British Columbia, or E Division (just for this blog we will let the E stand for Emperor) there has been one area of investigation where the RCMP has been woefully inadequate, for at least a couple of decades, whether one wants to measure it statistically or in terms of impactful effort.

In the last couple of weeks, that weakness has been revealed and underscored once again, this time by the NDP government and former RCMP Peter German, in a report on money laundering, a significant sub-set in the general category of financial crime.

Inside the police community it has been well known for quite some time, that the RCMP has ignored “white collar crime”, both in term of the allocation of funds or personnel. An often quoted inside joke amongst members in talking about job transfers, was throughout their career how they had ducked and avoided being assigned to the the “fraud” section. A small reflection perhaps, but this attitude of avoiding the financial investigative groups in terms of a possible career, is not a phenomena of the last couple of years.

The growth of internet crime in the 1990’s has thrown fuel on to this constantly burning flame and left Canada with a reputation of being a safe harbour for the financial criminal. This type of crime has often been portrayed as the “victimless” crime, after all the only ones being hurt were those cold-hearted bastions of industry– the banks. The police held this view for the longest time, equally guilty of looking the other way, the problem not worthy of serious examination or study. Even today, in terms of “strategic priorities” you will find it listed fifth, right after “youth” and the “indigenous”.

This lack of a concentrated effort has now been exposed once again, this time spurred on by a new found public and media interest who have taken to conflating money laundering with inflated real estate prices. Of course, there are many fundamental economic issues causing high prices in Vancouver but the one that seems to grate on the middle affluent is the thought of illegal monies from mainland China driving up the price in real estate or on luxury cars. Of course, there are also direct links to drug dealing and therefore the opioid crisis, the other hot button issue. The monies have been traveling through the only pipeline they seem to be able to build in this Province, the one of elastic bound $20 dollar bills pushed through the conduits provided by the casinos.

In the lastest instalment BC Attorney General David Eby called a press conference to discuss a finding of Peter German in his 2nd report on the subject in this Province. Eby claimed to have been so shocked by an early edition of these latest findings that he felt it necessary to go to the public now, not waiting for the entire 2nd report.

So what was the shocking revelation for the NDP?

Well, Peter German being the intrepid former RCMP officer that he was, decided to ask how many officers were actually on the job in terms of investigating money laundering?

The answer: Zero.

Now, one would think that this information would have been known before this time, as it seems like an obvious avenue of inquiry, even for us lesser informed. At the beginning of this inquiry it would have seemed logical to search out who the investigative experts were in the field? Apparently not.

The original answer of course was not zero.

We would not be able to identify the RCMP involvement, if they did not, at the very least try to cover or fudge the actual numbers, hoping of course that there was only the one question; no follow up, no probing allowed.

The RCMP answer to German was that there was 26 “positions” .

German knows the code of when the answer is “positions” and knew enough to then ask, well how many were actually filling those 26 positions?

Answer 11.

German decided to dig further and asked of those 11 how many were actually on the job?

Answer 5.

And those 5 that were actually showing up to work, he persisted, what were they doing?

Well, long pause, they are just packaging and referring all files to the Provincial Civil Forfeiture group.

Thus the secret was out of the bag. Afterword, if you had listened closely and put your ear to the ground outside Green Timbers, you would have heard the sound of bodies scrambling in and out of conference rooms, frantic terse phone calls, the bumping together of the police and political brains entrusted with these matters — stumbling and mumbling on how could they justify such an apparent illustration of lack of operational effort.

Even for those adroit at media manipulation in the “Strategic Communications unit” must have been struggling, proposing spins that at the very least would have been difficult to say with a straight face.

Bill Blair (who had apparently been warned by Eby and given an early copy of the report) started off by admitting that indeed there had been “significant cuts” in some of the Federal units. Then his political survival senses kicked in, and the Liberal godfather of pot began his spin: “We have made very significant announcement in Budget 2019, restoring the RCMP capacity and making significant new investments in intelligence gathering and furthering steps that will facilitate investigation and the prosecution of money laundering offences”. So in translation this means; yup, we haven’t been doing anything so far, but look out now, we are coming with guns blazing.

Assistant Commissioner Kevin Hackett who is becoming remarkably proficient with this kind of yarn spinning, no doubt through un-wanted practise, came up with a buzz worthy comment calling the report and the findings only a “snapshot in time”. If it was indeed a snapshot it must have been taken on a Polaroid One Step.

But like Blair, Hackett when prompted feels the need to beef up his response. He said that the report “didn’t capture all personnel who are involved in cases where money laundering is a component”. He goes on to say that there are over 40 prioritized “projects” underway, and guess what, they found out that “8 of them involve money laundering.” One wonders what standard may be in play here. For instance, a drug dealer being investigated who has a house or a car, could be referred to as being a possible “money laundering” case, using this criteria.

We should also point out that it would be somewhat negligent to not understand a bit of Peter German’s former history with the RCMP. Just six years ago, German was a high ranking officer in the RCMP, the Deputy Commissioner in fact, and as such was at one time technically overseeing financial investigations throughout Canada. He was in charge during the time of the Integrated Marketing Enforcement Teams. Remember them? They were “equipped to respond swiftly to major capital market fraud”. It was by any measure a total flop with three cases brought to court during their first nine years in existence. In essence these positions have been now rolled into the BC Securities Commission, but the RCMP still have a difficult time in providing an adequate minor level of trained officers.

In his 31 years with the RCMP, German did use his time wisely, earning an MA in Public Policy and a Phd in Law from the University of London. He apparently transitioned into an expert in the area of money laundering, wrote a book on it in fact. So someone at the 2nd highest rank in the RCMP (and was rumoured to be in contention for the Commissioner ) and was responsible for areas such as money laundering, did not make a dent in this problem or more importantly did not at least become vocal about the issue while in a policing position. But now, retired and running his own consulting business he has been hired to write a report on the problem of money laundering and throw dirt at the Mounties for their lack of effort. This is not to day say that this makes his report of little value, Mr. German is a well respected learned fellow, so quite the contrary, but one has to appreciate the irony.

Those of course are just the Federal job positions. What has the Province been doing? Well the Liberals being the party in power for most of this time in question have many questions that need to be answered, and the NDP is for the most part still able to feign ignorance.

Ex-RCMP and whistle blower Joe Schalk was the Senior Director of Investigations for BC’s Gaming and Enforcement Branch and was reporting this issue for many years, as early as 2012.

This branch at the time reported to the B.C. Lottery Corporation who would have received many of the reports issued pointing out the problem. They apparently didn’t like the attention it was getting and inevitably the relationship between the two groups began to deteriorate.

In April 2014, the Ministry of Finance conducted a review of BCLC and concluded that the two groups had become dysfunctional and “adversarial”. They recommended a full review of the entire Corporation. Meanwhile, in 2014 Schalk was fired for his efforts, a victim of the old management game very prevalent in this Province, that if you don’t like the message shoot the messenger.

Even with this kind of attention and concern, BCLC, according to German, was still accepting government awards for their exemplary performance.

Schalk was finally exonerated in German’s report for “nailing the issue” and continues to speak openly about the issue, even calling for a full public inquiry. The NDP are still holding back on such an inquiry, no doubt worried that if they let “it” hit the proverbial fan, how much is going to blow back on them.

As said earlier, this is all just one component of a much larger problem in this Province and in this country which has taken root and many can share in the blame; besides the police, Federal and Provincial governments, Crown Counsel offices.

In a recent poll, 36% of Canadian organizations say they have been victimized by white collar crime.

There is the fallacy that most of this crime is too sophisticated to detect, when in fact 61 % of that crime is done by a perpetrator inside the organization. The cost for this; 1 in 10 organizational victims are in excess of $5 million.

According to Criminal Intelligence Service Canada, organized financial crime, including debit and credit card fraud, totals over $5 billion per year. That works out to a cost of roughly $600 per family in Canada.

Canada has produced some famous fraudsters in the past; Harold Ballard the now deceased but former owner of the Toronto Maple Leafs, who was convicted of 47 counts of tax evasion, Alan Eagleson the hockey agent, and Conrad Black who in 2007 was convicted of using $60 million in company funds. Mr. Black, now apparently reformed, writes a column for the National Post.

Among the 35 member countries of the OECD (Organization for Economic Cooperation and Development) bid rigging, cartels, and collusion are estimated to add 20% in costs to any government procurement initiative around the world.

Suffice to say, it is fair comment that there are some financial crime issues in Canada, not just British Columbia.

The RCMP web sites are misleading and have not been updated if one was ever trying to untangle and look behind this bureaucratic veil of secrecy. There are still references to IPOC (Integrated Proceeds of Crime) who on their site point to successes in 2006 and 2009. They are references to IMET (Integrated Market Enforcement Team) which have virtually disappeared, many members re-assigned, some others melding into the BC Securities Commission. IPOC was reviewed back in 2010 by Public Safety Canada and described their operations being severely impacted by “partners leaving…vacancy…staff turnovers..and recruitment issues..are all contributing to less than optimal performance” . It wasn’t working even then.

The RCMP still list having 27 Commercial Crime Sections across the country. They don’t really.

Re-organization in the RCMP has become a dogma, which has been combining and mutating with aggressive promotions and the push to specialization. It has been in full swing over the last number of years and German even makes reference to 2013 as being one of the recent turning points in this current system.

To understand the depth of the problem, one has to understand the depth of the re-organization, and the vast number of personnel involved.

There are four groups of agencies involved with the potential to be involved in money laundering and other associated financial crimes. The RCMP, CFSEU-BC, OCABC, and JIGIT. (Never doubt for a moment the policing ability to come up with acronyms- JIGIT being a personal favourite)

The RCMP has a Federal group named the Federal Serious and Organized Crime Unit (FSOC). It is in this group that you will find a series of Teams and officers (a team usually being about eight). It was about 2013 that various separate departments, drug sections, commercial crime sections etc. got rolled under this Federally controlled apparatus. Operational direction and the assigning of priorities began coming from Ottawa, national priorities were going to outweigh local or Provincial authorities.

Two of the teams in this FSOC deal now with Financial crimes and supposedly have some expertise in the money laundering field. Of course this is the group that German was told had 26 positions, but there were only 5 actually working, and those 5 were simply bundling up investigations and passing the information to BC Civil Forfeiture (yes, another group).

Sources estimate that there is about a 30% vacancy rate Canada wide in the Federal positions being overseen by Ottawa, and this staffing problem is clearly causing major disruptions in any consistent effort in any of these specialized fields.

Besides FSOC and the RCMP, then there is the CSFEU-BC (Combined Forces Special Enforcement unit) whose primary mandate is gangs and gang activity. In addition there is OCABC (Organized Crime Agency of BC), a Provincial organization which is the new iteration of the old CLEU (Combined Law Enforcement Unit). Confused yet.

Wait, there is still JIGIT which is the Joint Illegal Gaming Investigation Team. This was formed in April 2016 and consists of 36 police officers and over 200 civilian personnel. They claim to have 8 active investigations. At first glance, no matter what file/member ratio you may employ, this seems pretty light.

CSFEU-BC and OCA-BC are both managed by a Deputy Commissioner of the RCMP; in this case, Mr. Hackett. So you can see why he feels the need to defend. In his defence he very cleverly talks about the investigations inside CFSEU (40 ongoing investigations) thus avoiding outing the Feds.

The Senior Management team has representatives from all of the agencies, OCA, RCMP and CFSEU.

CFSEU and OCABC has over 400 officers and civilians.

When you consider the number of personnel involved in all these groups combined, it would seem difficult to argue that the number of officers is insufficient.

What may be the crux of the problem, what the issue at its core may be more simple at least in broad terms.

The RCMP has a now ingrained inability to be forthright; the inability to say things were tried and didn’t work, the inability to speak to their political masters and say there is not enough resources to be all things to all people. The no job too small or “doing more with less” is a never ending conundrum that leads nowhere.

Like all government groups, failure is not and can not be an admitted option. Everything is always a success, no matter how dismal the effort or how big the lie. Honesty about their lack or strength of effort has been side-lined and obfuscation is the media tool.

They just can not bring themselves to admit that they can not do it all. They are no longer capable of being a one stop shop on the Federal or Provincial level. When you combine this with low priority being given to financial crime, with the concurrent need for highly specialized academic personnel, what results is a smorgasbord of uncoordinated piece meal investigational files on all levels. Any substantial efforts are being frustrated from the very start and often met with failure. (You will note that we haven’t mentioned the most recent abject recent failure in the Silver International Investments case, which deserves attention on its own)

Throw in governments always in flux who are continually altering the political priorities, a dis-connected Ottawa, insufficient funding in both the needed technology and personnel and a recalcitrant justice system and you end up with zero prosecutions.

The same number now apparently working on money laundering.

Christine Duhaime, an financial crime and money laundering specialist with Duhaime Law said “It’s pretty serious, it’s saying there is no oversight and no real enforcement in this area for the whole province–it’s a little bit crazy”.

A telling snapshot for sure, let’s hope that someone, sometime, takes a look at the issue with a little longer lens.

Photo via Flickr Commons by Andrew Kuchling – Some Rights Reserved

Jumping Ship….

If you have been keeping track you may have noted that some significant officers of the Executive rank of the RCMP have decided that now is a good time to get out of Dodge. Maybe most noteworthy is Kevin Brosseau the Deputy Commissioner, who was in the running for the Commissioners job; and a couple of months ago another Deputy Commissioner, Joanne Crampton, announced her retirement. She too had been in the running for the job of Commissioner. So both have announced their departure after they were jumped over in terms of rank, by the eventual winner of the Commissioner sweepstakes by Goodale friend Ms. Lucki. In Ottawa, where the Peter Principle seems to run freely and where nepotism is of second nature, one would have to assume that both saw the writing on the wall, that the ultimate brass ring was now officially out of reach.

Meanwhile, out on the West Coast, another darling of the political identity movement, Deputy Commissioner Brenda Butterworth-Carr has also announced her retirement as head of E Divsion. She too was rumoured to be in the running for the Commissioners job and according to some reports was in effect the front runner. Many speculated that the person who was once trumpeted by the Vancouver Sun as a “trail-blazing First Nations leader” saw the grass growing greener on the other side of the political fence, time to put the resume to monetary use.

It is not unusual of course for people to depart, especially when most have a furtive eye on lucrative second jobs, and ex Mounties seem to have a knack for not wanting to retire, and often have ambitions of joining Canada’s 10% economic elite.

To accomplish this they seem to have developed the ability, like “Bumblebee”, to morph into jobs where their lack of expertise does not hinder their aspirations. There are many examples, such as Bill Blair who mysteriously found a new calling in the marihuana industry as a preamble to launching a political career with the Liberals; Julian Fantino, former Chief of the Toronto Police Service who once called the legalizing of marihuana equivalent to the legalizing of murder; and a former West Vancouver Police Chief, the illustrious Kash Heed, who never saw a camera he didn’t like, or a podium he didn’t want to stand on, has also been advising the marihuana industry for years.

Ms. Butterworth-Carr not letting any grass grow under her feet, has joined the ranks of the disaffected and announced her new 2nd job as the incoming Deputy Minister and Director of Police Services for the Province in Victoria; replacing Clayton Pecknold. Needless to say, she has raised a few eyebrows, and concerns about this possible conflict of interest.

Ms Butterworth-Carr was not in her current role as the titular head of the RCMP in British Columbia very long, only have taken the job with great fanfare in March 2017. So she has been in her current top post for two years, maybe long enough to get a cup of coffee at the in-house Green Timbers Tim Hortons, but clearly not enough time to undertake any initiatives of significance.

Her CV is replete with First Nations references and the requisite buzz phrases: “strategic planning” “coaching” “mentoring” and the always suspect assignments of community policing, employee safety and crime prevention. It is therefore fair to question her qualifications for the job as deputy minister where she will be “superintending” policing in the Province, “establishing Provincial Policy standards” and “inspecting and reporting on the quality of police services”, amongst and including the municipal police agencies.

Between her anticipated pension and her new salary, an educated guess will put her pension and salary income over $300,000.00. Clearly she will be joining the select few with a combined salary as much as the Chief of Vancouver City Police and far in excess of any other police chief in the Lower Mainland.

But qualifications and exorbitant compensation aside, what is more curious is both the timing and obvious conflict of interest in this appointment.

During her brief tenure, she saw the City of Surrey vote to pronounce that they are going to go to a Municipal force, a major move which must have sent some shock waves even to the often seemingly disconnected Ottawa RCMP establishment.

As Professor Rob Gordon of Simon Fraser University has said this move by Butterworth-Carr has left him “astounded by the bravado with which they have gone ahead and done this”. What he is referencing is that the City of Surrey must submit a plan to the Province to leave the RCMP, which will need the approval of Mike Farnworth the current Minister of Public Safety and Solicitor General. An advisor to this application will be none other than Butterworth-Carr in her new role, the former RCMP spokesperson and defender of the Surrey RCMP.

To be fair, Butterworth-Carr has never said she disagreed with the people of Surrey a possible indication that she is at least politically savvy enough to avoid the obvious pitfalls. However, since the election in Surrey, she has clearly been directed or taken her own initiative to show and demonstrate how the RCMP, in her opinion is doing an exemplary job in Surrey.

There was evidence of this public defence during a bizarre interview with Global news.  She along with Assistant Commissioner Eric Stubbs and Assistant Commissioner Kevin Hackett presented themselves saying they wanted to speak to the Forces “successes and challenges”. So on December 17, 2018 the three sat, looking uncomfortable, to clearly try and curtail the buzz over the election in Surrey and all the negative news which has been circling the RCMP over the last several months.

They clearly were not prepared despite this interview being by their request. When asked what were the big successes in 2018 Ms. Butterworth-Carr pointed to the “technological advancement” of the RCMP; that they were “piloting digital evidence” and “advancing interactions with Crown”.

If that wasn’t head scratching enough, they promised they were going to be more “tenacious with the social media environment” and they were going to “get out in front of news stories”. They said that the RCMP needs a “progressive culture” and that they were working at improving the “workplace culture”.

Of course the Global news anchor recognizes government nonsense patter when she hears it, so she then asked about the Lemaitre inquiry. Ms. Butterworth-Carr said that she was not in “a position to respond to that”. There was no follow up question, so it was never asked why the head of the RCMP for the entire Province would not be in a position to respond to this issue. The RCMP have been perfecting for many years the old dodge and hide but this defied normal logic.

When asked about the Surrey election and the move to go to a municipal police force she said that it would be up to her Federal and Political masters (she of course did not mention that she was heading over to be one of the politicos -a fact that at the time of the interview must have been known to her)

She did say that the RCMP is “delivering an exceptional service”, which she also had mirrored in an internal memo to her RCMP brothers and sisters saying that there had been “great work done by the RCMP”.

Near the end of the interview, as if he had been jabbed under the table, Mr. Hackett then jumped in to this fragmented interview, with the observation that in travelling the Province with Mr. Stubbs they had noted that there was a lot of “positivity out there”.

So there you have it, the three top Mounties in the Province and their take on the current political and criminal climate in British Columbia. Is there any wonder this group is in trouble or that Ms. Butterworth-Carr is bailing out? With their promises to meet with Crown more often and maybe sending their files in PDF rather than on discs, the RCMP officers watching this display must have felt positively giddy about the future.

It was a glaring example of the total lack of leadership in the RCMP. From top to bottom there is a shortage of principled, dynamic, and informed leadership. Maintaining the status quo, doing the same thing over and over again and but expecting different results and expecting the general membership to fall in line, is in fact the sign of insanity,

The system is such that the commissioned officers of the RCMP need to comply with and be part of an accepted creed of conformity to government and political needs, and they literally spend hundreds of hours playing the system, learning the new terminologies, and gaming the new political identities.

But just once, you would hope that someone arrives at a higher level, with some vision of the future, with some solutions to the pressing problems, and with some ability to communicate that vision. Just once, you would like to see some of them stay around long enough to enact that commitment. Just once, you would like to see someone turn down the rolls of money being wafted tantalizingly under their noses because of their inflated sometimes conjured resumes, and instead hang around long enough to have some success.

This group needs to spend less time on LinkedIn, more time on honesty and integrity, and less time echoing their political masters. In the wise words of Sir Winston Churchill, “kites rise highest against the wind, not with it”.

Leaders become leaders when they step forward and only when they are accepted by their followers. The RCMP is in desperate need of a leader unencumbered or enamoured by trappings or future benefits.

In terms of Ms. Butterworth-Carr and the announcement of her new job, the management of the RCMP and the NDP lead government will likely put on their blinders once again ignoring the obvious conflict and maybe a little jealous of her financial windfall. The police rank and file will resignedly shrug their shoulders, give a ‘told you so’ smirk, and carry on, as there is no other choice.

Potter Stewart, a former associate justice of the U.S. Supreme Court said, that “ethics is the difference between what you have the right to do, and what is right to do”. Sadly, there seems to be no one in the upper echelons of the RCMP or in the current B.C. government that seems to understand that distinction.

Photo Courtesy of DVIDSHUB via Flickr Commons – Some Rights Reserved