Justice Committee on March 25th, 2010

[James Dubro]

Well, of course, I emphasize drugs and pot because I'm advocating the legalization of pot to solve the problems. But you're right, there are all those areas and lots of other areas.

Certainly there's people smuggling. I did a documentary on people smuggling. It's a major organized crime activity around the world, and a very lucrative one. The answer to that is a lot more complicated than simply legalizing pot, although that gets rid of a lot of problems.

In terms of union activities and construction, going back 100 years, I would say, in this country, there have been activities, extortion on a very low level, and contract killing. For whatever reason, in our society there are people who want things done to other people. To get something done, who do you go to? You go to someone in the underworld.

Antonio talked about levels of corruption.

Gambling, which is something that Margaret emphasized, is still a major activity. While the government runs most of gambling now, the other major partner is the mob.

Loan sharking is another one that I'm sure you're aware of, which was very, very big in Montreal in the 1970s and 1980s, and even today. People cannot get money from banks.

So we're talking about the whole range of activities. I don't know what percentage is actually drugs. I think the money revenue is coming from drugs.

[Serge Ménard, Bloc, Marc-Aurèle-Fortin, QC]

Our time is limited so you might answer at the same time to what I asked earlier. Seven minutes are very short.

It is my impression that drugs are so lucrative for the large criminal organizations — those are the most violent or that establish their discipline through violence — that they leave to other groups activities such as cigarette smuggling or even prostitution.

In fact, there are many other criminal organized groups but ultimately drug trafficking is so lucrative for the more dangerous large criminal organizations like the Hells Angels or even the mafia that they let those others thrive next to them.

[Antonio Nicaso]

I agree with you. I think drug trafficking is the main source of income for criminal organizations.

There are different levels of involvement in the narcotics trade. Criminal organizations such as the Mafia or the 'Ndrangheta are involved at the level of importation; motorcycle gangs are involved at the level of distribution; and street gangs are involved at the level of drug retail or selling on the street. This is the way that criminal organizations organized themselves in consolidating this major source of income.

But I believe another important source of income is money laundering. We underestimated the importance of money laundering in the lives of criminal organizations. It's practically impossible to run a criminal organization if you don't have an avenue to launder money. You can't stash money in cash. And I believe construction is a great way to reach legitimacy. When we deal with money laundering, and when we deal with a way to find a cover for your criminal activities, you are looking at corruption and infiltration. That's the way criminals and sometimes politicians and businessmen meet together for different reasons.

[Dr. Margaret Beare]

One of the things that's so difficult about the conversation is that every one of those criminal operations or enterprises brings in quite different factors. I'm not certain that you can say today that drugs are the big money-maker. Possibly they are the priority money-maker for some Mafia operations. But again, while I was looking at the situation of trafficking in humans, some of the criminal operations seem to be deciding that is a less risky and highly profitable enterprise to get into.

Basically any industry that has a possibility to make a profit is going to have a criminal and possibly a corruption sideline to it as well.

In regard to some of the kinds of criminal activity that you talked about in terms of unions or construction, in terms of looking at what they're doing in the United States, I think we can maybe learn some things there. We certainly tried to learn from the RICO. But what they're doing in some of those industries is what they call IPSIGs. In order to keep the operation going--like the business or the corporation or whatever--they make the people pay for trusteeships, auditors, and all the rest of it. What this emphasizes is that we have to assume that in any money-making operation there is the possibility that criminals are working. In fact, some criminals will be operating in those industries.

One point I'd like to make is that we are speaking on the assumption that crime is increasing. Every time one has these hearings--I think every year--we talk about crime increasing. Certainly the statistics are not increasing, and I'm not meaning to downplay organized crime or the dangers or the amount of money or anything, but I don't know that we have the evidence that it is increasing.

Thank you very much.

[The Chair, Conservative, Ed Fast]

Thank you.

We'll move next to Mr. Comartin for seven minutes.

[Joe Comartin, NDP, Windsor—Tecumseh, ON]

Thank you.

Professor Beare, to you, and Mr. Dubro, maybe to you as well, concerning the question of tying violence to drug enforcement, the urban health research initiative of the British Columbia Centre for Excellence in HIV/AIDS just came out this month with a report, interestingly enough, that was peer reviewed by the Fraser Institute. I couldn't quite figure that one out. I'm asking if you're aware of it. If so, do you think the methodology is valid, and are you are aware of the studies they reviewed? Basically all of the studies--I think with the exception of one--found that as jurisdictions stepped up drug enforcement, the level of violence went up correspondingly, and this included assaults all the way to murder.

Do you have any comments on that, again, on whether it's a valid report and whether the study was done according to accepted social science methodology and whether the results are--

[Dr. Margaret Beare]

I have not read that report, but what it seems to refer to is what we know. When you take out a monopoly, which perhaps drug enforcement would do, you're opening it up to competitors, which then increases the amount of violence until whoever is there is once again able to regain political influence, again put in place a corruption network, and regain a monopoly.

[Joe Comartin, NDP, Windsor—Tecumseh, ON]

I was in Italy with the minister and other members of Parliament last spring. There we met with a number of the government agencies fighting organized crime. They advised us that they believe it was mostly by taking the wealth away from the family known as the Mafia that they basically destroyed them. Going along with that, the other groups of Cosa Nostra and some of the other families stepped in, but I didn't get any indication from the agencies that the level of violence had gone up in that country as a result of destroying the Mafia family, although others were competing to take over.

Is that an exception, or was I just not being given the information?

[Dr. Margaret Beare]

Perhaps Antonio knows more. Maybe it has to do with what the level of violence was beforehand.

[Antonio Nicaso]

The level of violence has decreased, but the main tool in fighting organized crime in Italy is seizure and confiscation of the proceeds of crime.

[Joe Comartin, NDP, Windsor—Tecumseh, ON]

I understand that, but if I can stay with the question of the level of violence, why would it have gone down in that jurisdiction, whereas when it happened elsewhere in the world--mostly in North America, but elsewhere in the world--every other one of these reports shows that the violence levels actually went up?

[Dr. Margaret Beare]

I'm wondering if it's more organized in that jurisdiction, in the sense that an organization was in fact taken out or impacted. When we look at drug trafficking and criminal activity in Canada, sometimes we make it sound as if it's one or two organizations and that all the proceeds are going into somebody's pocket, whereas in fact research out of Montreal seemed to indicate that there are so many small operators that there'd be more small operations to compete with one another and cause the violence you talked about. Perhaps if there is more of a Mafia-like centralized structure, there's basically less competition.

[Antonio Nicaso]

It has to do with a different type of criminal organization. There are criminal organizations that are territorialized; they control the territory, and what they want is to run the criminal activity. They don't want violence, because violence increases the scrutiny from police and media, and that's what they try to avoid.

You mentioned Italy. In some regions of Italy, the criminal organization has a strong link with the territory. They control the territory and avoid the violence of street gangs or common criminals. In Canada we don't have that type of organization, the type that controls the territory. In some areas we do, but not across the country.

[James Dubro]

In many ways, increased violence indicates less organized crime or less organization, and more disorganized crime or fighting among different groups, as happened in Vancouver last year. The Hells Angels didn't particularly want violence, as violent as they are; it was only because the Rock Machine came in and started taking on their territory that they got very macho about it and started killing each other. This happens on the street level. Right now in Montreal we're talking about a street gang taking on the Mafia.

[Joe Comartin, NDP, Windsor—Tecumseh, ON]

Professor Beare, you made the point about street-level gambling. I didn't catch what you were trying to convey to us. I got the sense that we don't provide resources to fight that. Are you advocating that we--

[Dr. Margaret Beare]

'm advocating that if we are in fact focusing on the kind of activity that puts dirty money into the hands of criminals, that would at least be an area to maintain.

Again, just as I was writing in trying to do this research, the joint force gambling operation in British Columbia was closed down. I thought there was an active joint force operation in Ontario. It turns out that it is now turned into something called pods, and the reason seems to be that gangs and guns are the higher priority.

So not only do the officers who do street-level policing feel that it's not given the priority it needs; they also feel that the local police are losing the expertise to even know what they're looking for.

We did two studies while I was at the Department of the Solicitor General, looking at gaming across the country. In those days I was in Ottawa, so I was riding with the vice guys, and they were pointing out the number of restaurants that had changed hands literally in the course of a game of cards. I was asking the police officer from Toronto whether I could do the same in Toronto, and he said no, they don't drive around and do that kind of law enforcement.

The only explanation I could think of was that again the resources have gone somewhere else. But also, as James or Antonio pointed out, now, with such a proliferation of government-run gambling, there's probably a sense that it's a bit hypocritical to be targeting the illegal operations.

Unfortunately, the illegal operations are not petty-ass things. They're...again, who knows? The question was asked where the largest amount of money comes from. Well, I don't think we should write off gambling. Maybe it's not right up there at the top any more, but it's not piddly-ass.

[The Chair, Conservative, Ed Fast]

We're out of time.

We'll move on to Mr. Rathgeber.

[Brent Rathgeber, Conservative, Edmonton—St. Albert, AB]

Thank you, Mr. Chair, and thank you to the witnesses for your presentations, although I must say at the outset that I'm troubled by much of what I've heard this afternoon.

We have heard the argument from time to time that if we just stopped prohibiting marijuana, magically all organized crime would disappear. As wonderful as that world would be, I have some problems with that simplistic theory.

I listened, Mr. Dubro, with interest to your libertarian defence for abolishing prohibition: that an individual should be able to do what he or she wants in the privacy of his or her own home without state interference. But then you drew the line at marijuana and ecstasy, and that's where your argument broke down. As a libertarian, which I'm assuming you are, based on what I heard you say, if you ought to be free to do marijuana and ecstasy in the privacy of your own home, or in public for that matter, why not heroin, why not cocaine, why not crystal meth?

[James Dubro]

I agree with you; that's where it goes. I am a progressive libertarian. The person I quote at the end is the fellow on Fox who calls himself a “pro-life libertarian”. A libertarian would allow for heroin. In fact, LEAP, Law Enforcement Against Prohibition, and Senator Campbell and various governors would make every major drug legal.

I pointed out that in the case of ecstasy, for instance, God knows what people are getting. It used to be, when it first came out, that it was done out of the lab in France or Switzerland. Now it's just concocted in garages and basements. God knows what they put in it. People have died from bad stuff. If it were legal and people decided to take it, the government would make a lot of money.

It would certainly knock out.... You said we oversimplified, and all of that. No one ever said organized crime would be gone if you legalized marijuana or even all drugs. God knows, before drugs they were into zillions of things to make money—booze, back in the twenties....

[Brent Rathgeber, Conservative, Edmonton—St. Albert, AB]

We're going to get to that, but you're skirting my question: why not cocaine, why not heroin?

[James Dubro]

I said yes.

[Brent Rathgeber, Conservative, Edmonton—St. Albert, AB]

You want them all legal?

[James Dubro]

Well, not at the moment. You'd have to do this gradually. You have to start somewhere—pot, as is happening in the United States. It's no good if, say, you legalize cocaine in Canada. That would just make more of a mess of this country vis-à-vis organized crime, because then you would have turf wars over U.S. territory. It would have to be done in the United States as well as Canada. It's not going to happen in the United States, so forget about it; there's no sense even mentioning cocaine. It might happen in Mexico at some point.

But marijuana is going to happen; I really believe it now. I didn't a few years ago. I believe it's going to happen with the next ten years.

[Brent Rathgeber, Conservative, Edmonton—St. Albert, AB]

What makes you think the United States is going to legalize marijuana?

[James Dubro]

It is through this referendum in California. It's just going in that direction, with all the so-called medical use. Basically, if you have the slightest pain, even in this country, you can get legal marijuana.

I happen not to use marijuana very often—maybe twice a year at most at a party—and believe me, I've seen the most sophisticated, respectable people smoking up or offering me a joint at a party. This is not a drug that should be illegal.