I asked Dr. German to advise me about how we got to this situation in British Columbia. That's one of the questions he will be providing information about. There are some pieces that are already in the public domain.
In 2009, when our integrated casino team, which received $1 million per year in provincial funding, was defunded, there was a report prepared in advance of that to make recommendations about how to reform that team so it would be more effective. It advised the government, at that time, that there were criminal organizations operating in B.C. casinos, that they were laundering the proceeds of crime through B.C. casinos, and that there were extensive illegal gambling houses in the Lower Mainland. The government decided to move ahead with the defunding of the team. I believe that was a critical error and a very significant one that resulted in the situation that we faced.
There were a number of internal memos. There were individuals within the gaming policy enforcement branch, likely, within the B.C. Lottery Corporation, as they had shared responsibility. They were providing information to the ministry about this. An audit into this specific activity was prepared by a third party business firm called MNP. The report was completed the year before I was elected. That report was not released to the public. I released it shortly after taking responsibility for the file, when I was briefed on it, because I believed the public deserved to know what was happening in B.C. casinos. In my opinion, the government made a decision not to release that report because they were unprepared to take the action necessary, given the implications it would have for the provincial proceeds that come from gambling.
People who were bringing this money into the casinos were actually gambling and—I don't want to let any secrets out in front of the committee, but they were losing, because the house always wins—they were losing significant amounts of money and the province was making money from this activity.