British Columbia’s anti-money laundering efforts are about to give Trump a huge headache – ThinkProgress

VANCOUVER, CANADA — In the lobby of the Trump International Hotel & Tower Vancouver, a scattering of glass cases house all kinds of trinkets and gifts for guests to see — and, if they’re so inclined, purchase.

There are bottles of champagne, warming under the lights. There are thick red ties, the kind President Donald Trump likes to wear. There are even white puffy bathrobes and slippers, some branded with “TRUMP KIDS” in multi-colored font.

The glass-encased offerings are equal parts chintz and charmless, as much a part of Trump’s questionable taste as anything pertaining to the president’s company. The very fact of their existence is unusual; the Vancouver Trump property, a combination of hotel rooms and condos for sale, is one of the few new foreign projects linked directly to Trump during his presidency. But while these tourist trinkets offer a way for the president to profit off a personal business, they are at least transparent: there for journalists, and the handful of others milling around, to see.

Above the building’s lobby, though, the identities of those spending money inside the walls of the rooms remain hidden, including those shelling out millions of dollars for individual condos. Thanks to entities like anonymous shell companies, we still don’t know who’s been purchasing units at Trump-branded properties across the world — including here in Vancouver.

Trump’s ongoing connection to his business and Trump-branded properties raises unprecedented questions about bribery and corruption, centered most especially on the Emoluments Clause of the Constitution, which bars the president from receiving foreign gifts without congressional consent. Congressional Democrats have filed a suit against Trump over emoluments, and a federal judge allowed it to proceed on Tuesday.

In Canada, meanwhile, new legislation may force the kind of transparency on the Trump International Hotel & Tower Vancouver that few Trump-branded properties elsewhere are required to provide. This legislation is designed to help unravel the types of money-laundering methods that have created what anti-corruption advocates now describe as the “Vancouver model,” which involves criminal gangs, especially out of China, laundering profits of the drug trade via British Columbia’s casinos and real estate. Thanks to the work of crusading politicians and on-the-ground activists, Vancouver’s days as a major hub of dirty money may soon be behind it.

And these clean-up efforts in British Columbia are likely to hit the U.S. president directly: Some of these measures will finally create a public registry of property owners in the province, allowing the public to see who’s been secretly spending money at Trump’s Vancouver property, funneling money — legally or illegally obtained — directly to the president’s company. (The Trump Organization did not respond to ThinkProgress’s questions, and there’s no proof that any money was laundered through the organization’s property in Vancouver.)

When David Eby, British Columbia’s tall, lanky attorney general, was appointed British Columbia’s attorney general in 2017, casino regulators briefed him on the major sources of money laundering in the province. One of the regulators, as Eby related at a recent anti-money laundering conference last April, “said to me, ‘Get ready, I think we’re about to blow your mind.”

“He was right,” Eby said.

According to Eby, the regulators showed Eby a clip of precisely how Vancouver had transformed into a global hub for illicit finance, with its casinos and real estate at the root of the issue. Men carrying bags — plastic bags, reusable bags, duffel bags — would transport millions of dollars in cash into casinos. The money would then be transferred into chips, which could then eventually be cashed out for a cashier’s check from the casino. The new, clean money could cycled around to be used for all manner of investments — including big purchases in Vancouver’s real estate, which allowed for the types of anonymous real estate purchases that have been a favorite of foreign crooks and kleptocrats for years. As Eby said at the April conference, the vast majority of those laundering money in British Columbia’s casinos listed their occupations as “real estate related.”

The most recent estimates of the dirty money flowing through the area’s casinos and real estate put the totals in the billions of Canadian dollars.

“We’ve linked [money laundering] to everything from being the Canadian center for overdoses deaths due to fentanyl, to being North America’s capital for luxury cars, to having one of the most out-of-control real estate markets… in not just North America but in the world,” Eby told ThinkProgress.

In Vancouver alone, local authorities estimated that some CA$1 billion worth of property transactions in 2016 were linked to Chinese organized crime syndicates. A Transparency International Canada analysis found that almost half of the 100 most valuable residential properties in the greater Vancouver area were held through financial structures (like shell companies) that kept their ultimate beneficial owners hidden. Case in point: One of the most notorious purchases happened when a Chinese student, who had no sign of income, managed to pick up a CA$31.1 million Vancouver mansion in 2016, apparently without raising any red flags.

But with Eby as the province’s attorney general, the best days of the “Vancouver model” may be behind it. Eby has led efforts to sound the alarm about links between illicit money and casinos and real estate in Vancouver, and has begun putting public pressure on the federal government in Ottawa to take the problem seriously. He and his allies have helped push legislation that would transform Vancouver into a leading light of anti-money efforts globally.

“People are clearly seeing now that money laundering and the proceeds of crime — the fentanyl trade and how it’s being washed through casinos and then laundered back into real estate — people are now starting to connect all these dots and recognize that, holy shit, we actually have a real societal problem in some of these big cities in Canada,” said Ben Rabidoux, whoruns the Canadian economic research firm North Cove Advisers. “It’s more than just [people saying that] real estate is expensive. It’s become this landing pad for illicit capital.”

Thanks to the ease with which individuals can set up Canadian shell companies to purchase Vancouver real estate, the city has seen its real estate market explode over the past decade, driving up costs and driving out many longtime residents along the way. “I think there’s no question the last couple years it’s been out of control,” said Steve Saretsky, a Vancouver-based realtor.

That’s why “in B.C., the public outcry is enormous, and there’s tremendous support behind what David Eby is doing,” Rabidoux said.

It’s not just calling public attention to these money-laundering networks, or to the federal government’s lack of response. Among the pieces of legislation now moving forward in British Columbia, as ThinkProgress previously reported, is the Land Owner Transparency Act, which would create a public database of beneficial owners behind the anonymous companies purchasing real estate — and skyrocketing costs — across the province. The planned registry could come online as soon as next year, peeling back the information on who has been snapping up luxury mansions and high-rise condos in and around Vancouver.

“I’d definitely say we’re turning a corner,” Eby said. “But the major success I think we’ve had is sending the message to people that things are changing in B.C.”

Not everyone is happy with the move toward transparency, though. In particular, luxury goods dealers — those who’ve profited from the surge of suspicious money in Vancouver over the past few years — are speaking out against Eby’s efforts.

“[T]he whole province could suffer financially if the B.C. government is successful at cutting the flow of dirty money into legitimate assets,” read a recent story in Business in Vancouver magazine. “And luxury retailers’ bottom lines could be particularly hard hit by a serious crackdown on money laundering in the province.”

That’s technically correct: fewer six-figure cars or diamond-studded watches may be sold in Vancouver as the province begins cracking down on money laundering networks. But for Eby, the fact that some are complaining about this crackdown is as atrocious as it is indicative.

“When I read it the first time I kind of laughed — it seemed like a parody piece,” he said. “And then the more I thought about it, it really pissed me off, because I’ve just talked to so many people who’ve lost loved ones to fentanyl…. It’s a parasitic economic growth.”

Rabidoux, who also saw the article, shared Eby’s sentiments.

“Only in Canada would you force a politician to defend a position that is against organized crime and criminal activities,” he said. “That is the most Canadian article I’ve ever seen…. It’s just tone-deaf. Just unbelievable.”

Eby said he knows the push-back to his efforts will continue — and that the road to cleaning up Vancouver’s dirty money problems, and to ending Vancouver’s role as a key node in global kleptocratic networks, is just beginning.

“Our goal is to go from worst to first,” he said. “We haven’t raised the ‘Mission Accomplished’ banner yet… but we’re starting to think that if the initiatives go as we hope, we’ll be able to show some really good progress.”

When British Columbia enacts its proposed reforms, the new rules will not only place the province at the fore of Canada’s anti-kleptocracy efforts, but they’ll also help peel back the curtain on who has been purchasing property at the Trump International Hotel & Tower Vancouver.

Running 63 floors and over 600 feet high, the building opened in 2017, and is one of the many hotels and towers to which Trump has lent his name as a branding opportunity (rather than outright owned). Last year, U.S. counterintelligence officials began investigating the building’s construction and sales, though it remains unclear precisely why.

Despite a 2017 recommendation from the U.S. Office of Government Ethics that Trump fully divest all assets that present potential conflicts of interest — such as the Trump-branded properties — the Vancouver tower has also presented the same concerns and questions percolating his business elsewhere. Namely, who’s been purchasing units in the building? And have any of the tenants been doing so to curry favor with the president, or to try to influence American policy?

It certainly wouldn’t be the first time foreign officials or foreign operatives had taken a keen interest in getting in the president’s good graces by spending their money at one of his buildings. Just look at what’s taken place at Trump’s D.C. hotel over the past two years, which has seen numerous foreign delegations spend hundreds of thousands of dollars, and potentially more, when visiting Washington.

And that’s only the ones we know about. All told, some 70% of the Trump Organization’s overall property sales across all buildings have gone to anonymous shell companies since Trump won the Republican nomination in 2016.

Moreover, British Columbia, as the trans-national anti-money laundering Financial Action Task Force (FATF) wrote in 2016, was a clear hub for “Chinese officials laundering [money] through the real estate sector, particularly in Vancouver.” U.S.-Chinese relations, meanwhile, have been one of the most outsized policy fronts of the Trump era.

When ThinkProgress visited Trump’s Vancouver hotel in June, foot traffic seemed limited. None of the employees at the hotel responded to ThinkProgress’ questions about concerns pertaining to British Columbia’s legislation, or about foreign officials potentially currying favor with the hotel’s namesake. “Everything has to go through corporate,” the stocky, balding concierge said. The Trump Organization ignored ThinkProgress’ questions.

Regardless, the efforts by Eby and his allies to flip British Columbia into a bastion for anti-money laundering efforts — both in policies and enforcement — may soon have the collateral effect of shining light on those who decided to pick up a unit (or more) in Trump’s Vancouver high-rise.

Source: Thinkprogress.org

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