Systemic Corruption

Posted on by Pete Cross

Insidiously, it seeps just below the surface,  swirling in and around every level of the Canadian mosaic. Currents of malfeasance, some large, some small, quietly percolating. Lapping endless waves of cronyism, nepotism, parochialism, patronage, influence peddling, graft, and embezzlement. 

In some countries it is prevalent to the point of being part of a daily existence; places where all daily activities take into account the need to pay forward the corruption.  In the other more “privileged” or affluent countries, like Canada, we smugly point at those living in that third world of undeveloped and often corrupted governments as we shake our heads in disbelief at the levels of criminality. 

The problem with corruption, besides the obvious, is that the slow trickle of misconduct eventually begins to erode societal morals and principles. It begins to gnaw at the very bonds of society.  We, as a society, need to believe in the stability and honesty of a government and those that have been appointed to lead.  We hope that there is an inferred sense of fairness in the vital portions of our society. 

Without it, discontent with one’s position in that society begins to fester. Discontent is followed by disbelief—  one begins to question the “system”.  If doubt in the system gains a foothold, this further undermines the structural pins of decency and respect. 

There are some that contend that systemic corruption combined with the gradual extinction of the middle class is the biggest problem currently facing the democracies of the West. There are some that believe that if not addressed it could indeed prove fatal to our current system of government. 

After all the power of corruption is absolute. One only needs to watch the now besieged authoritarian government in Belarus. This corrupt government which has been led for 26 years by the authoritarian Alexander Lukashenko is now in retreat—the streets now teeming with violent protest. 

Lukashenko pronounced an election victory— one that was clearly rigged in his favour —proved to be a final and ultimate straw for the citizens of that country.  His government’s corrupt practises over the years has now launched daily protests of 200,000 people. As many as 7000 have been arrested and detained as he clings to power and calls on his ally Putin to come to his aid.  Europe’s “last dictatorship” is now in rightful peril. 

Clearly there are levels of corruption around the world. 

Tradingeconomics.com actually compiles a “corruption index” of countries. Belarus, surprisingly considering its problems, is only 66 on the list of 180, 1 being the best, and 180 being the worst. (Somalia has the distinction of being the worst and Denmark is listed as being the least corrupt country in the world)  

Canada is number 12 on the list. (We were 9th in 2016) but due to its slight deterioration Canada is now considered a country “to watch” alongside Saudi Arabia and Angola.

On the surface this seems like a good number, but how do we measure corruption in this country? Let’s consider some recent Canadian examples. 

The underground economy in Canada is estimated by Statistics Canada to be about $45 billion— $16 billion in Ontario alone. Current estimates suggest that this “irregular” economy may account from 10-25% of reported Gross Domestic Product, and that this illicit part of the economy is actually now growing faster rate than the GDP. 

In a poll a couple of years ago, a group of Canadian executives found that twenty per cent of these business leaders believed bribery and corruption were “widespread in this country”.

Recently, in British Columbia the Money laundering Inquiry is for the first time officially looking into what most people have known in this Province for a long time; that illicit funds have for many years been continually funnelled into real estate and high end vehicles; millions of dollars using the casinos as an easy conduit.  

Criminologist Stephen Schneider said that “while criminal organizations have traditionally laundered the proceeds of crime as part of their broader operations, separate money service businesses are now facilitating them”. He goes on to describe the Vancouver “model” which centres around “professional money laundering”. He flatly states that British Columbia is simply “an attractive place to do that”.

When describing financial crimes like securities fraud or stock market manipulation Schneider said that Canada “has never been very good at addressing them”. In summing up an overall picture he describes the obvious “low-hanging fruit” which is the street level drug trade;  but the real danger occurs “within commercial crimes that may be committed by corporations and private businesses that appear legitimate”.

Another recent example which is slowly falling from public view is the SNC Lavalin affair. We should remember that this large Canadian once reputable organization pled guilty to fraud for work in Libya and has now agreed to the paying of a $280 million fine. They were caught having paid $127 million in bribes and laundered millions to win contracts in Libya. A large chunk of that money, some $47 million was paid to Saadi Gadhafi, son of the late dictator Moammar Gadhafi.  Suffice to say that this Canadian company was playing with the upper echelon of the world criminal sphere. 

The RCMP in Canada has over many years systematically dropped the proverbial ball in terms of pursuing these “white collar” types. But this lack of effort can not be totally blamed on the police. The prosecution services, the financial regulators and the corporate world are at the very least guilty of astounding willful blindness. 

As an example, in 2008 and in 2014, the Financial Action Task Force, a relatively unknown but influential international standards setting body called out Canada for a “significant set of deficiencies” specifically regarding our ability to determine the “true owners of private corporations”. This is referred to by accountants as “beneficial ownership transparency” and is the key factor in tracking down financial criminal activity and corruption. Our collective blindness once again at fault.

Finding corruption is in fact quite easy. Just follow the money. Pots of money will always draw the flies, those perpetrators and opportunists along with the ethically challenged corporate insiders. 

The criminal hawks are continually circling. Let’s consider the recent CERB cheques in Canada.  They have gone out to 7.8 million individuals. Statistics Canada then quietly noted, that even though 7.8 million people benefitted “only 5 million Canadians -employees and self-employed people–either lost their jobs or began working less than half their normal hours”.  Even with limited mathematical skills one can easily calculate that this  leaves one with a potential of 40% of the claims being fraudulent. With the announcement of no due diligence required, the fraudsters had to be salivating. Sadly, it has become equally clear that many Canadians have no problem in trying to “rip” the system. 

This leads us to the reverberations out of the WE scandal in Ottawa.  This drew in our own Prime Minister, the Minister of Finance and the Chief of staff of the Prime Minister. 

The Finance Minister, whose daughter was working for WE, and the Prime Minister whose wife, mother and brother had all been paid by the WE brothers in some form— apparently didn’t even know enough about business practises to understand the concept of recusing themselves.  Their sense of entitlement blinded them in their own deceit.  

It was also revealed recently that the WE executives referred to Mr. Morneau as a “bestie” in some back and forth emails. This same Minister quickly remembered, while walking to the very Committee hearing, that he “forgot” to pay back $40,000 in expenses for two rather dubious trips. 

At the time of this blog, Mr. Morneau has now been pushed to the curb, but undeterred is applying for the job of the head of the Organization for Economic Cooperation and Development. One has to wonder how that that job application will skirt around a couple of sticky ethics investigations, but pay no mind, because the Prime Minister is going to vouch for him. 

Mr. Trudeau, for his part, in the style of a tin pot dictator has now “prorogued” the Canadian Parliament, stopping all the activities of Parliament until September 21st. An apt parallel would be if you imagined Trump shutting down the Mueller inquiry. 

It effectively shuts down the various Committee investigations that were going on involving WE and the Liberals. 

But what may be the most disturbing to this writer is the lacklustre enthusiasm for pursuing the offenders in this country. What is it about the citizens of this country where there is no outcry against the white collar criminals?  No outrage or demand for accountability. 

This is a country that applauds the Hells Angels on their toy run, turning our heads from viewing their daily practise of extortions, and torture.  Beatings and killings of the innocent and the promulgation of the sex worker industry or the drug trade is ignored, as long as there is a stuffed bear attached to their handle bars. 

There was a massive outcry in the United States, cameras traipsing behind mediocre actress Lori Loughlin who was convicted in a nation wide college entrance exam cheating scandal for her involvement in getting her  “gifted” kids into University. The U.S. and Canadian media coverage was endless. 

While in this country, businessman, philanthropist, BC Sports Hall of Fame and former CFL’r David Sidoo was found guilty in this same scandal of cheating to get his two sons into college in Boston. He paid $200,000  to have a professional test writer use false credentials to impersonate his two sons to write their SAT’s. He even flew the fraud artist in to write one of the high school exams for one of his sons. Has there been massive shaming, has there been any calls for his removal from the Hall of Fame? Crickets. 

Commissioner Lucki, meanwhile remains in seeming isolation,  effectively distancing herself from the Coronavirus and any investigation involving the Liberals.  One should not expect anything to come out of the Ottawa RCMP corridors in terms of any investigations of wrong doing while under her oversight.

Remember when Ms. Lucki was asked about the investigation of obstruction involving the Prime Minister and the SNC Lavalin controversy? She replied that the RCMP “takes all investigations seriously, and investigate to the fullest”. That was in September 2019.  

Ms. Lucki is proving herself to be a plodding one trick pony. Diversity is clearly her one and only issue. It will also likely prove to be her swan song.

So what does the future hold. Well, the only thing for sure is that Canada on the afore mentioned corruption index is likely to slip further down the ratings. 

Canadians are now becoming a bit closer to Belarus than to Denmark. 

Photo courtesy of Christopher Dombres via Flickr Commons – Some Rights Reserved

Getting away with murder..there is a “substantial likelihood”

Posted on by Pete Cross

In October 2014, Theoren Gregory Poitras, 25 years old,  was found dead in Richmond, B.C.. Poitras, chose to re-locate to Richmond British Columbia from Edmonton, Alberta in what sounds like the proverbial “get out of town” scenario. Allegedly he was involved in the drug world there.

It was then  “alleged” that Sean Jacob Lee Jennings and David Nguyen also ended up in Richmond, also originally from the drug world of Edmonton, and in typical gang style killed Poitras, leaving him in his own blood, in front of an Elementary school.

The pair were charged with 1st degree murder. But in June 2017, three years later, Crown Counsel in British Columbia, very quietly, days before the trial, stayed all charges. They cited that “further evidence had been received…and there was no substantial likelihood of conviction”.

There it is, the statement, which like the Damocles sword is held over the police for each and every case which has been forwarded for charge approval. The police submit the evidence, and the Crown decides whether there is a “substantial” chance of convicting the accused.

Over the past number of years, local scuttle butt amongst investigators )there is no measurement of this statistic to reference) ; say that fewer and fewer cases are making it to trial.

Judges have even lamented to me that it seems that no one is willing to take cases to the trial stage. Add in the affinity for plea bargains, and there seems to be little seeming to work its way through an incredibly slow moving court system and actually be decided at a trial.

Is the Crown office “trying” the cases in the reports, and not in front of the courts? Is the bureaucratic need to avoid public controversy, or god forbid, the fear of losing in court, and are exposed in the public eye, keeping them from pursuing charges, when in fact charges are warranted.

We will probably never know. Crown can make these decisions in private, out of the public eye, and so far never seem to be held accountable for these decisions, or more accurately these non-decisions.

The Poitras investigation was part of a large IHIT, CFSEU, Edmonton Police and the Alberta Law Enforcement Response Team investigation. It seems Mr Jennings, upstanding citizen,  was also allegedly involved in a murder in Alberta; where he has also been charged with 2nd degree murder in a street shooting death of Alor Deng in Edmonton in July 2014.

Millions of dollars were no doubt spent in this Project, and numerous resources employed. When Jennings was arrested  for the Poitras murder, CFSEU and IHIT called a press conference to announce their successes. Now that the charge has been stayed in the Poitras murder there is now deafening silence from Crown, CFSEU and IHIT as to why this particular case has been dropped.

No one feels a need to explain.

The public will never know what “new evidence” was learned, new evidence which apparently was so significant that their case had been blown up. Did they charge the wrong guy? Did witnesses fall by the way side? Did the police contaminate evidence? Did the Crown drop the ball? This lack of openness helps no one. In fact it leads to greater distrust.

Which leads me back to this “substantial likelihood of conviction” phrase. It is used every day. Every police officer knows the phrase, from the earliest days on the job when they have been pursuing charges, submitting reports to the Crown, and awaiting their decisions. There is little questioning of the eventual decision, and more often than not there is no detailed rationale given.

All cases involve this process. As the more serious cases unfold; murder, extortion, or kidnapping for example, this same process is followed. The police meet with Crown but ultimately Crown decides with the ill-defined “substantial likelihood..” being the most significant criteria, and being their ultimate measure. I personally spent hours in Crown offices disagreeing with a lack of charge, arguing that the merits of the evidence warranted charges. Sometimes you were able to convince, but other times you were not. Sometimes you were wrong, and in my opinion sometimes they were wrong. I was fortunate to have a good relationship with most, and there were no ill-feelings even though sometimes these meetings would become quite heated. We would often leave frustrated, shaking our heads at the level of proof that was being demanded.

By way of example. Our team was investigating a shooting in Port Moody in the middle of the night between two groups of equally criminal gangsters. One was trying to “rip” the drugs of the other. It led to one group opening fire on the others, and a stray bullet went through a residence striking a lady who was laying on a couch watching television. The bullet entered her head through her eye. She awoke in a hospital with brain damage, with no idea how she got there. Many years later she is still recovering, but will never be the same.

The only witnesses in this case at this time of date were the gangsters themselves. There was no changing this fact.  After months of investigation we managed to turn one of the “victim” gang members to assist us. He agreed to testify even as to who was the “shooter”. This, now witness, did not want anything in exchange. No preferential treatment.

Crown refused to use his evidence, due to his lack of credibility since he was an admitted gangster. We argued in over three meetings that we met the threshold of charge approval, that they needed to put him on the stand and let the courts decide if he was credible. We lost all arguments, with the Crown wanting a credible witness which did not exist. The Crown and I remain friends and understand each others argument, but totally disagree with the not laying of charges. The “shooter” in this case went on to further criminal activities.

The problem of course is obvious. How do you define “substantial”? And because it is such a subjective measure, different Crown lawyers could  give different answers. It seemed to me that the more experienced, the more willing they were to go to trial, and therefore the more willing to have less of a hurdle for the evidence to jump over. I have had certain Crown Counsel say that on a scale they want a 90 % success rate. This is high and therefore to maintain that level, the cases that are maybe a 60 % or 70 % probability are pushed to the bottom and not chanced.

Substantial is defined partially as “having a solid basis in reality or fact”.  Pretty general one would have to say, which whether planned or not has led Crown lawyers in to an obvious way to side step the difficult cases. And of course some of the more difficult cases are the gang style killings.

BC has developed a reputation of a place where gangsters can free wheel (we have not even been successful in having the Hells Angels designated as a criminal organization), and I believe part of that blame falls on a Crown Counsel not willing to push with the more difficult cases. There is no incentive for them to do so, but they are contributing to an endangered public. A safety issue because there is a lessened fear of prosecution.

It has also created an us versus them relationship between the police and the Crown. There is an element of distrust, and in many cases now, Crown will not even make a decision without full disclosure of the entire case, in other words not trusting the police to deliver what they say is in the Crown submission. This too is causing grief and public safety issues (but that is for another blog).

The police of course will not criticize the Crown. They still have to live with them on a daily basis, as many Crown reports are forwarded and any criticism may be met with even further intransigence.

The decisions of the Crown are done without any oversight and accountability, other than by their peers in their own offices, or a possible appeal up the chain into the Attorney Generals office. And like all government offices, when the bureaucracy decides to turtle, it is more difficult to dig down through the layers, or find someone willing to buck the system. Their future promotion or judge appointment is decided by these very same people.

The American system, of politically elected District Attorneys is quite the opposite. Those elected want to make a name for themselves, they want to take on the big cases, they are less worried about losing in exchange. Now, before I go further, this is not an ideal system where political gain can be a factor in deciding charges, but it does make one pause.

Preet Bharara, the recently fired District Attorney of New York (fired by Trump which may make him a martyr rather than a villain) led over 100 prosecutions of Wall Street executives for insider trading, he reached settlements with the four biggest banks, conducted public corruption investigations into both Democratic and Republican officials, and was known for its terrorism cases that reached around the world.

Do you think such prosecution is a possibility in any Province in Canada? Is it because we have no crime here, no white collar crime or terrorism cases? Of course not, quite the opposite, Canada is developing quite a reputation for harbouring white collar crime in fact.

In Canada, we are seeing some prosecutions which they do go forward with blown completely out of the water, and criticism being directed at Crown and the police. Look no further than the Duffy case where he was acquitted of all 31 charges, and now there is a lawsuit against all involved for $8 million.

The Supreme Court of Canada Jordan decision which put a time limit on trials getting to court is putting added pressure on the Crown across the country, and causing apoplectic fits.

Apparently 30 months, once the charges are layed, and Crown has all the evidential material, and now need to get it into court, is beyond their capabilities.

The Supreme Court called the current Crown system a “culture of complacency”.  High Judge speak for a slow and dull bureaucracy, and one apparently not that interested. I don’t think anyone who has worked in any Federal or Provincial bureaucracy would be surprised by this description.

In this day and age, can we afford to have no accountability in such crucial matters. Maybe an independent oversight of Crown is necessary, we certainly don’t seem to be reluctant to have oversight of the police. Remember the police are only half of the judicial process, maybe its time to demand some answers from the other half of the equation.

Our Crown system needs to be subjected to a complete managerial overhaul.

Is Solicitor General Jody Wilson-Raybould the one to lead us out of this morass?  It seems unlikely.

She says that there is nothing gained by “appointing blame”. and really it is a problem for the Provinces. Sounds like a statement from a bureaucrat who has been rolling in the clover of a Federal system. Someone willing to accept complacency.

The Jordan problems are now beginning to surface. It was recently announced that notorious, full patch Hells Angel Larry Amero has just been released by judicial authorities in Quebec, due to the time it has taken to get him into court. He was arrested in November 2012 under Project Loquace, one of 100 arrested,  being one of the primary targets of the extensive investigation. He was released from organized crime charges and cocaine importation. You will remember him as being one of the victims of the shooting in Kelowna in 2011 where Jonathan Bacon was killed.  Of course this was because of the Jordan decision.

He will probably come back to work on the Vancouver docks where he is a card carrying longshoreman, that is if he is not too busy with his other life.

Clearly five years was not enough time for the Quebec prosecutors.

But hey, there is no sense in appointing blame.

 

Image courtesy of the_whiteness via Creative Commons with some Rights Reserved