At a time when traditional journalism is weathering both economic and political storms, we should all take a moment to reflect on the vital role it plays in healthy democracies. The following story, about a joint investigation by The Toronto Star and The National Observer of FINTRAC, (Canada’s money laundering and terrorist financing enforcement agency), is illustrative of this truth.
As I previously wrote, FINTRAC chose to keep secret the identity of a bank that it penalized for failing to report a suspicious transaction and committing hundreds of other violations in its dealings with a controversial client. Thanks to journalism's dogged determination (which is not cheap, by the way), the mystery is over.
It took 10 months of media scrutiny and public outrage before Canadians learned Manulife Bank of Canada was the mysterious financial institution behind a $1.2-million fine for money-laundering violations.The decision to confer anonymity upon this giant financial institution was puzzling, given that the same day in April, a handful of much smaller companies — facing far less severe fines — were publicly named by FINTRAC. This is all part of a pattern:
Over the past eight years, FINTRAC has named 40 companies for violating the law while keeping secret another 55.Left unanswered is the reason for this double-standard, especially disturbing given the scope of Manulife's malfeasance:
-Manulife’s fine, which was reduced twice from an initial $1.8 million, was for five different types of violations of anti-money laundering and anti-terrorism financing law, involving a failure to report transfers totalling at least $12.2 million.Curiously, for much less serious violations, FINTRAC showed no such penchant for secrecy. Those named and shamed included one whose misdeeds seem relatively minor:
-The bank failed to report one suspicious transaction to FINTRAC — labelled a “very serious” violation that experts say undermines Canada’s system to detect financial crimes and trace dirty money.
-Manulife also failed to report 1,174 outgoing international electronic transfers of $10,000 or more, 45 deposits of $10,000 or more in cash and four incoming international electronic transfers of $10,000 or more.
-The bank was also fined for failing to “develop and apply compliance policies and procedures.”
Mahdi Al-Saady, CEO of Altaif Inc., an Ottawa-based money exchange and transfer company, was hit with a $42,600 FINTRAC fine — and publicly named — in 2014.The fact that Altaif was named is, of course, not the issue. The real question is why all who run afoul of FINTRAC are not treated the same, with the rules rigidly applied.
The violations for which Altaif was fined included failing to report the sending and receipt of money transfers of more than $10,000 — two of the same violations the unnamed bank was found to have committed.
I have my own suspicions, but I leave it to informed readers to draw their own conclusions.