COMMENTARY: With public inquiry, NDP government no longer in control of B.C. money-laundering issue

WATCH: With the announcement of a public inquiry into money laundering in B.C., the NDP takes some action on behalf of the people of the province.

For the most part, governments of any political stripe do not really like public inquiries.

Governments, by nature, like to control things. Generally, a government sets the agenda, and everyone else responds and reacts to decisions it makes. At least, that is its preferred way of doing business.

What is a public inquiry?

But public inquiries are independent bodies. Even with strictly defined terms of reference, they tend to go where they want to go, sometimes exploring areas that a government might not be too comfortable with.

In addition, there is no guarantee of a payoff at the end. Inquiries can become bogged down in procedural wrangling as would-be witnesses hire taxpayer-funded lawyers to stop them from getting on the witness stand or to minimize how much testimony they are required to give.

WATCH: NDP government announces public inquiry into money laundering

Short of shutting an inquiry down — which has happened before in B.C. — the government has little choice but to sit by and watch as the inquiry winds its way through a maze of obstacles. Meanwhile, the costs associated with an inquiry — and they can be substantial — keep mounting, and it is the government that keeps writing the cheques.

WATCH: B.C. government announces public inquiry into money laundering

All this may explain why the B.C. NDP government took a considerable amount of time before finally commissioning the inquiry.

There are plenty of past quotes from Premier John Horgan and Attorney General David Eby about why public inquiries are not necessarily the answer when it comes to investigating money laundering in the province.

B.C. government calls public inquiry into money laundering

Horgan and Eby often expressed concerns about the costs, the potential length and the unknown outcomes associated with public inquiries.

“An inquiry?” Horgan once told reporters. “There’s been many over the years in B.C. They tend to cost a lot of money and lead to a report that’s a few inches thick that sits on a shelf. That’s not what the public wants. That’s not what we want.”

WATCH: Commissioner of B.C. money-laundering inquiry can call anyone to testify

As for Eby, he, too, was worried about the costs, particularly when it came to people who may think they violated a law or policy.

“They have the opportunity to retain counsel,” Eby said. “If they’re public servants then it is possible that the public would be paying for their lawyers … an exercise that would last probably a couple of years and would cost a significant amount of money.”

These concerns were raised even after several years of revelations in the media — many first reported by Global News — about suspected money-laundering activities in both casinos and the real-estate sector, which are both vitally important to the government’s bottom line.

The pros and cons of a public inquiry into B.C. money laundering

It is hard to ignore the fact that, for all the suspicions about illegal activities in those two sectors, they both contribute enormous sums to government coffers. In fact, it would be almost impossible for the government to balance its budget without the money flowing in from gaming and real estate.

Last year, the province took in $1.4 billion from gaming — almost entirely casino-related — and almost $2 billion from house purchase transactions. Critics have long speculated the go-slow approach on combatting money laundering was tied to that reliance on all those dollars.

So what has changed?

Report finds $5B laundered through B.C. real estate in 2018

To its credit, the NDP government took much further steps than its B.C. Liberal predecessors did when it came to cracking down on suspicious transactions in both sectors. And it deftly used the money-laundering issue to repeatedly beat over the head of the B.C. Liberals, contrasting any action it was taking with the tone-deaf approach favoured by the previous government.

But what appears to have pushed the NDP into finally calling a public inquiry was former deputy RCMP commissioner Peter German’s explosive reports on suspected money laundering in casinos, luxury vehicles and real estate.

WATCH: Final report on money laundering in B.C. contains shocking numbers

The reports collectively moulded public opinion in a way that had not occurred before. People were outraged and wanted some kind of action that would hold individuals or institutions accountable.

Will the inquiry accomplish that?

It is certainly structured to do so. Commissioner Austin Cullen will have broad powers — as set out in the B.C. Public Inquiry Act — to conduct inspections, examine documents and compel witnesses to testify.

WATCH: Keith Baldrey has details on the extent of money laundering in B.C. and its impact on the real estate market

It is likely lawyers representing various interests will challenge some of his efforts. It is also not yet entirely clear whether federal employees in the RCMP, immigration and other departments will co-operate with or challenge some of his efforts.

There remains the possibility that the inquiry could become paralyzed and impotent. However, we are a long ways away from that scenario developing.

In the meantime, the Cullen Commission will soon begin its activities. It will be independent and free from government interference, which means for the first time since the NDP came to power, the government is no longer in control of the money-laundering issue.

Keith Baldrey is Global BC’s legislative bureau chief.

© 2019 Global News, a division of Corus Entertainment Inc.

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