RCMP nixed probe into suspected PRC-linked money laundering network – National

The RCMP declined to investigate a suspected money laundering network connected to the People’s Republic of China (PRC) because the force determined that shutting down the scheme would have “no significant impact.”

According to documents released by the federal foreign interference commission Thursday, the RCMP was made aware of a “money laundering network that was connected to organized crime and PRC (foreign actor interference) activity.”

Deputy Commissioner Mark Flynn, who is in charge of federal policing, testified that he made the decision not to pursue an investigation because it wouldn’t make much of a difference.

“When asked if a financial crime unit could investigate the network, Deputy Commissioner Flynn queried what impact a successful financial crime investigation would have on the larger problem,” a summary of his testimony read.

“Because multiple backup networks could be used for money laundering activities, it was felt that a successful financial crime investigation would have no significant impact. Deputy Commissioner Flynn ultimately refused the request because the proposed investigation was not sufficiently impactful to justify a higher prioritization.”

It’s only one vignette of the largest issue of foreign interference in Canada, the subject of Justice Marie-Josée Hogue’s federal inquiry. But it highlights two significant issues into how Canada counters the foreign influence threat: the connection between hostile powers and organized crime in Canada, and the lack of resources of federal authorities to devote to countering complex interference operations.

The RCMP has a $6-billion annual budget. But that money is split between federal policing – things like white-collar crime, national security, and protecting politicians and visiting dignitaries – and everyday front-line policing in multiple provinces and territories.

The tension has long been an identified issue within the national police force, which splits itself between specialized, in-depth investigations and more mundane responsibilities like speeding tickets and law enforcement.

In 2023, the federal Liberals earmarked $48.9 million over three years for the RCMP to counter foreign interference activity. But Flynn testified that the “need for dedicated (foreign actor interference) is growing and already exceeds capacity” and “the need for additional resources is expected to increase significantly.”

Another barrier to foreign interference investigations was highlighted in the documents released by the commission Thursday: the difficulty of using information gathered by intelligence agencies as evidence in criminal prosecutions.

Intelligence agencies, both in Canada and in allied nations, collect vast amounts of information on people of interest. But not all intelligence products can be used in criminal trials – either because they don’t meet the level of evidence, or because they risk giving away how the agencies collect their information.

“(Flynn) explained that this issue can limit the RCMP’s ability to investigate (foreign actor interference)-related activities, because the RCMP generally becomes aware of these activities from intelligence, both domestic and from international partners,” the interview summary read.

“When international partners share intelligence, it generally comes with caveats requiring that the RCMP protect sensitive information from disclosure, posing a limit to the RCMP’s ability to action the received intelligence for criminal investigations.”

All these factors could help explain why, despite the findings of both Hogue’s inquiry and the National Security and Intelligence Committee of Parliamentarians (NSICOP) that federal candidates and some parliamentarians were wittingly participating in foreign interference operations, the country has seen no criminal prosecutions in those matters.

Hogue’s inquiry is set to hear testimony until Oct. 16, when Prime Minister Justin Trudeau is set to appear for a second time before lawyers. The inquiry will also hear from senior public servants, intelligence officials and cabinet ministers in the coming weeks.

Hogue’s final report is scheduled to be delivered to the government by the end of the year.

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