Response to David Hicks and Reply

Response to David Hicks Review of Money Laundering in Canada: Chasing Dirty and Dangerous Canadian Journal of Sociology, 2008 33(3):767-770. First, let me thank David Hicks for the effort he took to review our book Money Laundering in Canada: Chasing Dirty and Dangerous Dollars. While he was obviously critical of our book, we acknowledge his right to hold his different views. We would however like to correct some of the statements that Professor Hicks has made and perhaps clarify our own positions. If Professor Hicks is not troubled by the money figures that are bandied about and that grow ever larger with no empirical base, then that is fine. We agree that the figure is large. The size and impact of that amount of cleaned illicit money remains unknown--by anyone, anywhere in the world. John Walker, the Australian guru of the attempt to empirically determine these numbers, whom we quote in some detail, has recently embarked on a global effort to identify the size; however, even he acknowledged that the task might not be doable. We acknowledge numerous times that criminals should not be allowed to enjoy their ill-gotten gains, but we question the costs of targeting money rather than the predicate offenses that produce those illicit profits. The RCMP cases have appeared on the Nathanson Centre website, with highlights reported in various articles as Professor Hicks states. The data was collected most specifically for this book and therefore of course the data not appear to provide substantive improvement given that it is the same RCMP case file data. What is surprising is the confusion that Professor Hicks apparently finds with the charts. He mentions in particular the chart on p. 86. As is obvious to anyone studying cases and is obvious from our case analysis, several different mechanisms are typically used in any one police case: i.e., deposit institutions, real estate, and much else. Therefore the implicated economic sectors add up to more than 100 percent. We cannot imagine how the chart could be clearer. For example 59.7 percent of all of the cases involved through the purchase of motor vehicles, but some of these cases also used other sectors of the economy for their needs. A point we emphasize in the text is that 76.5 percent of the cases at some stage involved deposits into financial institutions--therefore remaining the most popular laundering mechanism (but again, possibly in combination with the use of other sectors). Professor Hicks is absolutely correct that we seem to have reassigned a new title to FINTRAC--for that we apologize. I suspect we get no credit for the consistency with which we continued to make this error! While conceding that gross error we must question the criticism that Professor Hicks directs towards our discussion of FINTRAC and we must suggest that it is Professor Hicks who is unaware of the procedures that, prior to the coming into force of Bill C-25, law enforcement had to go through in order to obtain anything more than basic information. Our book was well into print before the passing of this new legislation--as Professor Hicks is aware. Professor Hicks states that it is implausible and illogical for us to argue that FINTRAC was a hole. He should either re-read our section or consult the Auditor General's report that we reference. The black-hole description was not ours alone. The new Canadian legislation was brought in precisely because FINTRAC was operating as a very expensive black hole! We do not deny that it was Parliament that set out the rules under which FINTRAC could share intelligence. That does not shift valid criticism away from an organization that was at that time not efficient but rather merely suggests that the legislation should have been, and to a limited extent has been, changed. When we were researching FINTRAC the police and financial institutions were frustrated by the lack of information they were receiving and did not see their input activity as rewarding

Psychoanalysis · Sociology · Crime, Illicit Activities, and Governance · Psychology