Commissioner Justice Marie-Josée Hogue listens to a lawyer speak during the Public Inquiry Into Foreign Interference in Federal Electoral Processes and Democratic Institutions, in Ottawa, on March 28.Adrian Wyld/The Canadian Press
The Foreign Interference Commission must follow the money.
It was bad enough to learn that unnamed parliamentarians are collaborating with China and India. But allegations that some MPs accepted filthy lucre and other perks from meddling foreign actors cannot be ignored.
Those revelations, contained in the commission’s initial report and a separate study by the National Security and Intelligence Committee of Parliamentarians (NSICOP), warrant a broader mandate for the public inquiry led by Justice Marie-Josée Hogue.
Foreign interference through the financial system is the elephant in the room. Illicit financial flows are part and parcel of foreign interference. So, why is the Hogue Commission not authorized to look into it? Perhaps it is because the federal government, which set the inquiry’s terms of reference, is afraid of what might happen if Canadians learned more about those dishonourable dealings.
NSICOP’s report was particularly damning – even though the dirtiest details were withheld from the public.
The committee, it stated, has seen “troubling intelligence” that some parliamentarians are “accepting knowingly or through willful blindness funds or benefits from foreign missions or their proxies which have been layered or otherwise disguised to conceal their source.”
One such example, which was heavily redacted, described how China employed “intermediaries” to furnish funds to support unnamed candidates in the 2019 federal election. That included “two transfers of funds approximating $250,000 through a prominent community leader, a political staffer and then an Ontario member of Provincial Parliament.” CSIS, though, was unable to confirm whether any candidate ultimately received the funds, the report said.
Equally troubling is the allegation that China used Canadian proxies to press unidentified individuals to donate money to the campaigns of preferred candidates by dangling promises of repayment.
A separate example described how India provided financial support to unnamed candidates from two political parties and CSIS’s subsequent determination those candidates were unaware of the source of the funds. The censored nature of the disclosure, though, makes it impossible to glean how many political candidates were tainted and the amount of money that changed hands.
Pakistan, meanwhile, engaged in fundraising to support its pet politicians in our country, according to the report.
It is not clear if any of the funds cited in those examples were initially funnelled through banks or money services businesses. But that doesn’t mean the money didn’t eventually flow into Canada’s financial system. Justice Hogue must find out.
She should start by questioning officials at the Office of the Superintendent of Financial Institutions (OSFI), the federal banking regulator, about the nitty-gritty of its new integrity and security guideline for banks and insurance companies.
Superintendent Peter Routledge said in a speech last fall that his office is “not seeing widespread evidence” of foreign interference in banks or the financial system. But perhaps that’s because OSFI’s guideline is only applicable to financial institutions, including the branches of foreign lenders and insurers, “to the extent it is consistent with applicable requirements and legal obligations related to their business in Canada.”
Moreover, why does OSFI’s guidance only encourage – rather than require – financial institutions to report suspected instances of foreign interference to authorities including CSIS and the RCMP?
Just how big are those loopholes? Canadians deserve to know.
Testimony should also be sought from the Financial Transactions and Reports Analysis Centre of Canada (FinTRAC) since it is authorized to disclose financial intelligence relating to threats to the security of Canada, including foreign-influenced activities.
During its fiscal 2023–24 year, FinTRAC generated 1,783 disclosures of “actionable financial intelligence” for its law enforcement and national security partners. Of that total, 212 related to terrorist financing and threats to the security of Canada, including foreign-influenced activities, FinTRAC disclosed in response to a query from The Globe and Mail.
Although FinTRAC is understandably restricted from discussing the financial intelligence that it has shared with CSIS, the RCMP, OSFI or any other authorized recipients, surely it can provide insights about broader trends to inform the Hogue Commission’s final recommendations.
For instance, what are the key indicators of foreign interference and what guidance does FinTRAC provide businesses, including banks, about flagging suspicious transactions?
Much like OSFI, FinTRAC has a newly expanded mandate. Both regulators, though, need more resources to tackle this issue.
The inquiry won’t have done its job if it fails to investigate foreign meddling through the financial system when public hearings resume in the fall. Not only does its preliminary report cite the use of “financial support” and “bribery,” but other Western democracies have tied illicit money trails to foreign interference.
In France, for example, the far-right party previously known as Front National (since renamed Rassemblement National) received a €9.4-million loan from a Russian bank with ties to the Kremlin back in 2014. Two years later, party leader Marine Le Pen shamelessly asked Russia for a €27-million loan to bolster her party’s election prospects.
Russian money has also been linked to cases of foreign interference in Italy and Britain. Canada should learn from the experiences of these allies.
“An ability to view the elements of foreign interference holistically would not only bring to light the strategic drivers and financial flows behind foreign interference but could also transform the EU’s capacity for strategic response,” states a 2023 report by the European Parliament.
The Hogue Commission won’t get to the bottom of Canada’s foreign interference mess unless it is empowered to examine holes in the financial system that undermine our democracy. It’s time to ask ourselves who stands to benefit if the topic remains taboo.