MONEY-LAUNDERING DRAGNET

There are rumblings that Ottawa's latest high-minded effort to
straighten out its unruly citizens, money-laundering legislation,
could bounce up to second reading in the House of Commons next week.
Bill C-22, introduced last December, is by any measure another power
overreach on the part of Chretien government - and there are no signs
it has any plans to back down.

Hunting down money-launderers sounds like a laudable objective. The
words alone conjure up all kinds of dark images: drug money, Mafia,
organized crime, prostitution and other grimy underworld doings.
Canada's war on money-laundering, however, appears to have other
origins in an even darker underworld, the relentless push by
bureaucrats and politicians to control and monitor. In the case of
Bill C-22, it also means enlisting Canada in the U.S. government's
notorious War on Drugs.

If passed, Bill C-22 would give Ottawa fresh authority to trap the
innocent, infringe on privacy, collect mountains of information on
citizens and put routine money transactions under suspicion. It would
also conscript lawyers, banks, accountants and others into a national
subculture of informants and snitches.

In a letter to Justice Minister Anne McLellan last December, the
Canadian Bar Association listed some of the threats posed by Ottawa's
plan to increase its surveillance over money transactions greater than
$10,000. It said routine legitimate business transactions could be
disrupted and solicitor-client relationships undermined. "The
mandatory reporting of information which may be confidential is a
drastic measure and a gross intrusion into a previously protected
sphere. The bill, it said, amounted to "restructuring the relationship
of trust between lawyers and clients."

In the name of fighting organized crime, Ottawa also wants to set up a
new bureaucratic agency with big powers. The Financial Transactions
and Reports Analysis Centre of Canada would collect information
supplied by bank informants and lawyers, and - depending on
regulations - could end up with a licence to harass the innocent and
legitimate.

If Bill C-22 does move up the Commons agenda next week, it would
coincide with a new move in Washington to accelerate its existing and
overwrought attempt to stop alleged money-laundering. The U.S. has one
of the toughest reporting regimes on the planet, but it still claims
money-laundering - much of it linked to the drug trade - is a national
curse.

The real curse, however, is the War on Drugs. Recent statistics cited
by The New Yorker put U.S. federal government spending on drug control
at $16-billion (US) a year, mostly in attempts to stop drug use and
support the criminal justice system. State and local governments spend
another $24-billion (US). The result, so far, is an increase in the
prison population to more than two million from 750,000 a decade ago.
The average drug offender serves more time than the average rapist,
burglar and mugger. Meanwhile, the number of hard-core addicts has not
changed.

Why is Canada playing into this futile and ruinous program? There is
no logical reason, except the relentless drive of those who thrive on
opportunities to increase government power.

Just in case the drug scare doesn't catch popular fancy, promoters of
hard-line money-laundering powers have concocted new and expended
definitions. In a confidential study for the federal government,
consultant Samuel D. Porteous managed to expand the generally
understood idea of "organized crime" - the traditional source of
money-laundering - into a catch-all net.

Whatever the public's concern, it is certainly a far cry from the one
devised by Mr. Porteous. In a condensed version of his study, he laid
out his "working definition." Organized crime is "economically
motivated illicit activity undertaken by any group, association or
other body consisting of two or more individuals, whether formally or
informally organized, where the negative impact of said activity could
be considered significant from an economic, social,
violence-generation, health and safety and/or environmental
perspective."

By that definition, spending $10,000 in cash to get your mother into a
hospital in Chicago could be considered threat to the economic
stability of the Canadian health-care system.

Out of that blanket definition come massive claims that money-
laundering is a zillion-dollar problem. Based on Mr. Porteous' fantasy
definition, Ottawa keeps floating different numbers. Total activity is
said to be $5-billion or $17-billion or maybe $7-billion or
$10-billion. All "economic crime" is said to include insurance fraud
($2.5-billion), "cellular phone fraud" ($650-million), stock market
fraud ($3-billion), telemarketing fraud ($4-billion). The authenticity
of these numbers is dubious, but, even if accurate, Canada already has
adequate crime prevention laws.

Bill C-22 proposes a new legal regime to investigate private
activities of Canadians. The information collected through the
national snitch network, a massive volume of stats and data on
thousands of Canadians and transactions, would in fact be a giant
fishing pool for government investigators prosecutors and even tax
collectors.