Justice Committee on April 15th, 2010

[The Chair, Conservative, Ed Fast]

I call the meeting to order. This is meeting number 12 of the Standing Committee on Justice and Human Rights. Today is Thursday, April 15, 2010. Members, you have before you the agenda for today. We're continuing our study on organized crime in Canada.

We have with us a number of witnesses to help us with our review. First of all, we have the Public Prosecution Service of Canada, represented by François Lacasse, as well as Yvan Poulin. We also have FINTRAC, with Hélène Goulet, Paul Dubrule, Denis Meunier, and Chantal Jalbert. Welcome to all of you.

I think you've heard what the process is. Each organization has ten minutes to present, and then we'll open the floor to questions from our members.

Who wants to start? Why don't we start with the Public Prosecution Service of Canada? Mr. Lacasse.

[François Lacasse, Senior General Counsel, Supreme Court Coordination, Public Prosecution Service of Canada]

Bonjour. Good morning.

I am François Lacasse. My colleague Maître Yvan Poulin and I will split our presentation. I will make a brief overview of the law of disclosure, and my colleague will address the issue of disclosure in the context of a mega-case against organized crime.

In R. v. Stinchcombe—a case that you have heard of before, the 1991 leading case regarding disclosure obligations in criminal cases—the Supreme Court of Canada stated that there is a general duty on the prosecution to disclose all relevant information in possession of the crown. Prior to Stinchcombe, the disclosure procedures varied across the country from region to region, even from prosecutor to prosecutor. Basically, Stinchcombe changed all that by crystallizing a unified approach to disclosure.

The prosecution's disclosure obligations are a component of the right of every accused in Canada to make full answer and defence, a right that, as you know, is protected by section 7 of the Canadian Charter of Rights and Freedoms. Many rules govern disclosure, but I will address only the few key ones that are necessary to understand the impact of disclosure on prosecutions involving organized crime, which usually qualify as mega-cases.

The first key rule, the most important one that governs the nature of what must be disclosed, is the concept of relevance. In short, the courts have taken a very generous view of what relevance is. It is not restricted to evidence that can be adduced in court. It includes information that may be useful to the defence, whether inculpatory or exculpatory. If, in short, the information may have some use to the defence, it is relevant and thus must be disclosed. For prosecutors, it is basically defined in a negative way: only what is clearly irrelevant should not be produced, and in case of doubt, the case law tells us that we must err on the side of disclosure.

Finally in that regard, I should mention that information that is privileged need not be disclosed. This, in the context of organized crime, comprises essentially information protected by the privileges protecting informers' identities and investigative techniques.

As to timing, the obligation is triggered by a request for disclosure made by the accused or made on his behalf. Disclosure should be made before the accused is called upon to elect a mode of trial, or in summary cases, before the accused is requested to plead. That's very important as well in the context of megacases.

The law does not provide for a universal mode of disclosure. Although providing paper copies of the material is the means most resorted to, it is not the only form in use. Electronic format is a useful tool, especially in megacases, as will be discussed by my colleague.

Finally, costs and resources necessary to fulfill disclosure obligations are borne by the state. This aspect, you will guess, is also very important in the context of megacases.

In conjunction with disclosure, another very crucial factor must be taken into consideration when assessing the complexity of current criminal prosecutions; that is the challenges made by the defence to the investigation itself pursuant to the charter. This possibility entails that before assessing or determining guilt or innocence a criminal trial may and often is preceded by pretrial motions, the purpose of which is to determine the investigators' actions and to scrutinize those actions to determine their legality and constitutionality. In case of a charter breach, the law provides for remedies that can be fatal to a prosecution, including exclusions of evidence as well as stays of proceedings.

The meeting of these two aspects of modern criminal trials in Canada, disclosure and investigative review, has fundamentally changed the paradigm of criminal prosecutions in Canada. They are now focused basically on process.

That being said, I would submit nevertheless that Stinchcombe disclosure has undoubtedly served to promote fairness, transparency, and more accurate outcomes in criminal trials. However, disclosure comes with a price. It poses very significant challenges to the prosecution of organized crime cases, as will be discussed by my colleague, Maître Poulin.

[Yvan Poulin, General Counsel, Quebec Regional Office, Public Prosecution Service of Canada]

Thank you, Mr. Lacasse.

Whenever we are dealing with organized crime, that automatically means there will be a mega-case. The ultimate objective of the more and more frequent investigations into organized crime is to dismantle the organizations and, more importantly, to neutralize the leaders. Over the last few years, experience has shown that the leaders generally operate by surrounding themselves with a buffer zone, such that detection and evidence-gathering involving them are very difficult.

It is thus that the gathering of sufficient evidence generally, and more often than not, requires very lengthy investigations involving the use of a whole gamut of tools, that go all the way from simple shadowing to electronic surveillance, including work by undercover agents. The use of these investigation methods, given their nature and the duration of the investigations themselves, will necessarily generate a tremendous volume of evidence that must be collated, classified and disclosed in accordance with the principles Mr. Lacasse has just outlined.

The challenge therefore is to respect the principles set out in the Stinchcombe decision in a context in which the volume of evidence is, in every case, absolutely gigantic. I am the prosecutor responsible for the Project Colisée that you have probably heard talk of and the aim of which is to deal with the Montreal mafia. The Colisée case in my view very well illustrates the volume of evidence that can be gathered during the course of an investigation.

Between 2002 and 2006, the RCMP and other police forces led an investigation targeting the Montreal mafia. During this period, close to 1.2 million conversations were intercepted by the police. More than 50% of these 1.2 million conversations took place in a language other than French or English, such that we had to call upon translators during the entire duration of the investigation. We used the services of more than 30 translators. Approximately 8,000 conversations were chosen and transcribed in order to be included in the disclosure and, in fact, in the evidence adduced in the proceeding. A large number of these conversations, often some of the most incriminating with regard to the leaders, were of poor sound quality, for having been picked up by microphones placed in very noisy places, which only added to the complexity of the whole affair.

On top of electronic eavesdropping, approximately 120,000 videotape hours were filmed surreptitiously and had to be disclosed. At the height of the investigation, more than 100 investigators were involved in one way or another, several of them in the preparation of the disclosure. Three public prosecutors were assigned full time as legal advisors during the investigation. Towards the end of the investigation, the number of prosecutors assigned to the Project Colisée had climbed to 10, in preparation of the legal phase.

As you are aware, in November 2006, following all of this investigative activity, the police proceeded simultaneously to the arrest of 101 persons. We disclosed to some of the accused most heavily implicated the equivalent of more than a million pages of documents in the days following the arrests.

In the case of investigations of this level, the objective looms large. The challenge is considerable. Indeed, the challenge consists in disclosing a very large volume of evidence in as complete a fashion as possible and in the least possible amount of time. Given the volume, you will not be surprised to learn that we made use of the electronic format, that offers several advantages and, more particularly, that is now recognized by the courts as being a method we are free to use for the disclosure of evidence. Here are some of the advantages: costs are considerably reduced, because disclosure is done electronically; the research capability both for the defence and for the Crown and the police, are much greater; the volume is obviously smaller and electronic documents lend themselves much better to disclosure in the case of phone-tapping and electronic surveillance.

We have the tool, in other words electronic disclosure. During the disclosure, we followed what I call three guiding principles, with a view to disclosing the evidence as efficiently as possible. These principles are foresight, focus and management.

We talk of foresight in the sense that disclosure must be planned for as soon as the investigation begins. It is not at the end of the investigation that we should be asking ourselves how to proceed with regard to those elements to be disclosed. If we do not plan, the quantity of information is such that it will be impossible to disclose in an opportune and readable way. As you are perhaps aware, we now assign prosecutors in order for them to help the investigators plan the disclosure of evidence as pieces of evidence are gathered. The policies of the Public Prosecution Service of Canada recommend this practice.

The second guiding principle is focus. What we tell investigators and what Crown prosecutors attempt to do is to restrict the breadth of investigations and to avoid what I call a scattered approach. It is inappropriate for the police to carry out an investigation that generates a useless volume of evidence and that does not allow for the attainment of the set goals.

The third principle is management. In order to fulfil the requirements, disclosure must be understandable and readable. One must be able to sort it out. Therefore, we classify and categorize the pieces of evidence according to their usefulness, and we do so from the very start.

In conclusion, I would say that the healthy management of the disclosure of evidence pertaining to organized crime requires the use of electronic media. It also requires the respect of the guidelines that I have just outlined. Our experience, with the Colisée case and others, has shown us that this is in the realm of possibilities. It is however evident that this requires important resources and that these resources must be used very judiciously.

[The Chair, Conservative, Ed Fast]

Thank you.

We'll move now to Hélène Goulet. You are presenting on behalf of FINTRAC.

[Hélène Goulet, Deputy Director, Strategic Policy and Public Affairs and Chief Review and Appeals Officer, Financial Transactions and Reports Analysis Centre of Canada]

Thank you, Mr. Chairman.

I would first like to convey the regrets of the director, Jeanne Flemming, who is unable to be here today.

I would like to introduce Chantal Jalbert, who is the assistant director of regional operations and compliance; Denis Meunier, the assistant director of financial analysis and disclosures; and our general counsel, Paul Dubrule.

Let me now turn to our mandate and what we do. Our mission is to contribute to the public safety of Canadians and to help protect the integrity of Canada's financial system through the detection and deterrence of money laundering and terrorist financing activity. FINTRAC was created by the proceeds of crime money laundering legislation, in 2000, as an independent agency reporting to Parliament through the Minister of Finance. The Department of Finance is the legislative and policy lead for the government on Canada's regime against money laundering and terrorist financing activity. In 2001, after 9/11, the Anti-terrorism Act added terrorist activity financing to our mandate.

FINTRAC is Canada's financial intelligence unit. We have slightly over 300 staff, and we have three regional offices in addition to our main headquarters.

We are a unique agency in Canada. Our mandate is to analyze financial transaction information and disclose certain information to investigators within the thresholds that our act provides. Our act stipulates that we can only release information to police where we have reasonable grounds to suspect that the information would be relevant to an investigation or prosecution of a money laundering or terrorist activity financing offence. Where we have reasonable grounds to suspect that the information we can disclose would be relevant to threats to the national security of Canada, we must disclose it to the Canadian Security Intelligence Service.

In short, we provide financial intelligence leads to law enforcement and national security investigative agencies. We are a resource for every police department in Canada, with the unique ability to follow the criminal money trail across the country and around the world. We also disclose information to the Canada Revenue Agency, the Canada Border Services Agency, and the Canadian Communications Security Establishment when specific statutory tests in relation to these agencies are met. Finally, we may disclose information to foreign financial intelligence units.

To give you the most accurate picture of our mandate, it is worth noting what FINTRAC is not. We are not an investigative body, and we do not have powers to gather evidence, lay charges, or seize and freeze assets. FINTRAC does not investigate or prosecute suspected offences. Rather, we are an analytic body that produces financial intelligence to be disclosed, if appropriate, to help further investigations conducted by law enforcement and security agencies.

Daily, FINTRAC receives reports on several kinds of financial transactions from a variety of businesses, what we call reporting entities. The most prominent of these entities are the banks and we also receive reports from casinos, credit unions, life insurance companies and money service businesses, not to give you an exhaustive list. We are authorized by law to receive suspicious transaction reports and reports of attempted suspicious transactions, large cash transaction reports of $10,000 or more, casino disbursement reports and reports of international electronic funds transfers of $10,000 or more.

Over the years, we have built a very large database of transaction reports, and through sophisticated computer programs and the skills of highly trained analysts we can analyze this data in combination with information from other sources, such as law enforcement databases, commercially or publicly available databases and, sometimes, information from foreign financial intelligence units. Simply put, we take in financial transaction data, combine it with other information to which we have access, analyze all this and disclose our analytical product in the form of a case disclosure. Without getting into the tradecraft of what we do, we specifically look for financial transactions and patterns that make us suspect money laundering or terrorist activity financing.

As you can imagine, the movement of illicit funds is often a well-hidden and complex affair, involving hundreds, sometimes even thousands of transactions, as well as dozens of individuals and companies. Sometimes, crime organizations will use over a dozen different financial institutions across the country and around the world to launder their profits. As you can see then, this is far beyond the resources of any single police force to track, hence the need for FINTRAC.

As we progressed from the start-up development phase to a mature experienced organization, we have been able to increase considerably our output of financial intelligence. FINTRAC's most recent annual report, tabled last fall, summarizes a number of the criminal investigations that were assisted by its financial intelligence during the year. One of the 556 cases disclosed was an international investment fraud which involved thousands of transactions and hundreds of millions of dollars.

The increase in output in the last year continues a trend that began when we became operational. We are now able to produce more financial intelligence more quickly than at any time in our past. Demand for our financial intelligence is growing, especially when police agencies are investigating criminal networks with many possible suspects. Following the money trail has become an important part of investigative work. Financial intelligence sheds light on the transactions that are sometimes related to criminal activity. It can assist investigators in making decisions about where to seek evidence, whom to include or exclude as part of the investigation, how the targets are connected, and where the assets may be hidden. This is true of investigations of fraud, drug trafficking, and many other criminal offences in which proceeds of crime are involved.

The true measure of our success is and always will be our ability to add to the effectiveness of those who are investigating serious crimes.

There is also increasing demand for strategic intelligence. As we have matured and gained experience, we have been able to expand our capability to do strategic analysis. By explaining trends in money laundering, looking at the big picture, we can inform our reporting entities so that they are positioned to provide the best front-line detection and deterrence. An example is furnished by a recent report we did for the banks—it is on our website as well—entitled Money Laundering and Terrorist Financing Typologies and Trends in Canadian Banking.

To conclude, I would like to turn to a key issue for us, the protection of privacy.

Our act was carefully crafted to provide the highest possible protection for personal information while also making it possible for some information to be disclosed to law enforcement. We are the only federal agency whose mandate includes an obligation to ensure the protection of personal information under its control. Our mandate entrusts us with a considerable amount of personal information. Protecting it is a responsibility that we take very seriously. Our security measures are rigorous and thorough, our data banks cannot be accessed by any other outside body, and the act provides for serious criminal penalties to be applied to the unauthorized disclosure of information. As you may know, our legislation also provides for a mandatory review every two years by the Privacy Commissioner of our operations in terms of privacy protection. The first review, completed last fall, found that we are protecting the information very well.

Finally, you will have received, at the end of my statement or maybe afterwards, a chart that illustrates our business process. I realize that I have already taken up enough time, but we would certainly be more than willing to come back to explain that business process to you and perhaps illustrate how we build our cases.

Thank you, Mr. Chair.

[The Chair, Conservative, Ed Fast]

Thank you to all of you.

We'll move on to questions now.

Mr. Murphy, you have seven minutes.

[Brian Murphy, Liberal, Moncton—Riverview—Dieppe, NB]

Thank you, Mr. Chair, and thank you, witnesses.

I want to ask about disclosure first, Monsieur Lacasse and Monsieur Poulin. We hear that out there in the legal community, there is some work going on of a collaborative nature between the defence bar, the Canadian Bar Association, the prosecutors' association, and so on to, if not codify this, at least come up with protocols for best practices with respect to complying with disclosure requirements under Stinchcombe.

First of all, my question is whether that is taking place. As has been said by a number of people here, it would probably also be in the defence counsel's interest to have an idea of what the protocol is or what the nature and breadth of disclosure and timeliness for disclosure should be. You want to avoid arriving at trial and hearing, “Oh, I didn't know you had that,” and having a whole trial adjourn forever because of some pyrrhic document search.

Has that been happening, to your knowledge, among other associations?

Second, and perhaps more germane to our work here, do you see any way we can codify this and somehow take the elements of Stinchcombe and put them into some form of a law, in the broadest of bases, that would help?

[François Lacasse]

To answer your first question, yes, I have been informed that there is work being done by various associations regarding codification of disclosure. Neither Mr. Poulin nor I have been directly involved in that work. We are doing more work in the trenches. As you may have understood from our presentation, what we have tried to do is work with the existing rules to make the system work.

That is the first point. In relation to your second question, as to what kind of policy, I'll resume your question in that direction.

As crown prosecutors, it is not our bailiwick, if I may say so, to determine what kind of policy should be adopted and whether it would be in the best interest of the administration of justice to basically codify what the case law has been telling us for the last two decades, almost. We thought that the usefulness of our intervention would be to show that by developing policies and by insisting on cooperation among the investigative agencies, even in major cases involving organized crime, it is not impossible to comply with disclosure principles.

[Brian Murphy, Liberal, Moncton—Riverview—Dieppe, NB]

I understand your reticence to get into policy, or God forbid, politics. I understand. But you're a lawyer. You deal with this every day. You read decisions. I'm asking you to comment not on what it would look like but on what it could look like.

It's a very general, amorphous concept, this concept of relevance. What is and what isn't? Beauty is in the eye of the beholder. Relevance is in the eye of the framer. Can it be codified, or can it be made part of a policy or protocol?

[Yvan Poulin]

Parliament has decided to codify various common law principles in the past. We've seen that. The sentencing aspect of criminal law has been codified in sections 7, 18, and the following sections of the Criminal Code. It's possible to do that. Common law has been codified in the past.

Is it necessary to do it for the disclosure aspect of criminal law? It is for Parliament to decide and for the Department of Justice to study the feasibility of that.

[François Lacasse]

If I may add, Parliament has already legislated in relation to disclosure regarding sexual assaults. There are provisions in the Criminal Code that have been enacted following decisions rendered by the Supreme Court of Canada that have been declared constitutional. So yes, it can be legislated.

[Brian Murphy, Liberal, Moncton—Riverview—Dieppe, NB]

Just to follow up, you said that other groups are working on this. Our staff might be interested in getting access to that. There's an annual criminal law conference that involves prosecutors and defence attorneys. It isn't the Canadian Bar Association. Is that what we're talking about? What are you talking about?

[François Lacasse]

I am aware that the Department of Justice is doing some work and is consulting with other stakeholders. Exactly the kind of work the Department of Justice does.... We're independent now. We're the Public Prosecution Service of Canada. I am not aware, exactly, of who they are consulting or of what kind of work they're doing.

[Brian Murphy, Liberal, Moncton—Riverview—Dieppe, NB]

We could make our inquiries, I suppose.

Briefly, this is just a quick run-through of questions for Madame Goulet. How many analysts do you have? You're very careful to say we don't investigate, we analyze, but how many analysts would you have? And you talk about reports. That's the bodies, like banks, etc., reporting to you, right? There's an obligation to report. In a general sense, how many would you be dealing with on a daily, monthly, weekly basis, whatever timeframe you're comfortable with? How many employees do you have? How many analysts, that is? What's the volume?

[Hélène Goulet]

I'll ask Mr. Meunier to talk about the analysts and Madame Jalbert to talk about reporting entities.

[Denis Meunier, Assistant Director, Financial Analysis and Disclosures, Financial Transactions and Reports Analysis Centre of Canada]

Thank you.

We have about 40 to 50 tactical analysts and probably about 10 to 15 people working on strategic analysis in FINTRAC.

If you want an explanation, tactical intelligence is basically looking at specific cases, names, addresses, that kind of thing, information that would form part of a case that we would disclose to police, as opposed to strategic intelligence, which would be looking at trends and patterns and no names mentioned, just very generic typologies.

[Brian Murphy, Liberal, Moncton—Riverview—Dieppe, NB]

And the number of reports?

[Hélène Goulet]

Do you mean reports coming in to us from our reporting entities?

[Brian Murphy, Liberal, Moncton—Riverview—Dieppe, NB]

Yes. You used the term a report from a bank, etc. There's a long list here. Reporting entities report. I've just taken the verb from the....

[Chantal Jalbert, Assistant Director, Regional Operations and Compliance, Financial Transactions and Reports Analysis Centre of Canada]

Thank you.

As part of the anti-money-laundering and anti-terrorism-financing act, reporting entities covered by our legislation must provide reports to us, reports of the kinds of suspicious transactions or large cash transactions. How many? Last year it was 24 million.

[Brian Murphy, Liberal, Moncton—Riverview—Dieppe, NB]

Twenty-four million. And there are 40 people dealing with 24 million reports?

[Denis Meunier]

We have systems, of course, that help us do this analysis. We receive about 6,500 reports a day, and as my colleague has mentioned and as Madame Goulet has mentioned, there are a variety of them. They include suspicious transactions, large cash transactions, cross-border transactions, international wire transfers--international wire transfers are the largest body of information we receive--and casino dispersement reports, etc. We have systems that allow us to review these reports.

[Brian Murphy, Liberal, Moncton—Riverview—Dieppe, NB]

Just briefly, 6,500 a day is not 24 million, but maybe we'll come around to that again.

[The Chair, Conservative, Ed Fast]

We'll come back to that again.

[Denis Meunier]

Sixty-five thousand a day.