Sanctioning Dissent
PART 2: Use of financial tools to stop protest that disrupts the economy is a dangerous detour away from a participatory democracy
[Part 1]
On Sunday February 13, 2022, the day before Canada’s Governor in Council declared a public order emergency under the Emergencies Act, Chrystia Freeland had an afternoon Zoom call with all the CEOs of Canada’s major banks—a meeting that the finance minister later told the Public Order Emergencies Commission (POEC) was convened on a couple-hours-notice, indicating “the degree of concern and anxiety” the head bankers were experiencing.
The purpose of the meeting, according to Freeland, was to gauge if the bankers were as worried as she was: “Am I right to be as worried as I am? What do these guys think?” Freeland also wanted to find out if the financial tools available to the banks at the time to freeze the assets of the “freedom convoy” organizers were working.
Some of what was said was startling.
At one point during Freeland’s Sunday bankers’ meeting, someone present (whose name was redacted) said: “I am told this is a Public Safety lead, but if you list them as people subject to sanctions (i.e. as if they are terrorists) we could act swiftly. But we likely need new rules to deal with this kind of situation.”
“What we did on Friday was precisely because of what our AML [anti-money laundering] systems were able to identify. BUT we are taking a big reputational hit, lots of backlash on social media for it. Fox News is telling people to take their money from us. We need your help to find a better way to communicate with Canadians.”
The bank CEO speaking here is more than likely Bharat Masrani, the head of TD bank, and the accounts he referred to were those of protest organizer Tamara Lich.
On February 12th, it was reported that TD froze two personal bank accounts that received $1.4 million dollars in donations from GoFundMe and bank transfers for the truckers. The bank had to apply to the Ontario Superior Court for permission to do so, and said they would return the money to those who donated.1
Another bank CEO (name redacted) says, “Canada’s reputation is indeed at risk. We need to show the world proactively that we won’t let this happen again… our trade corridors will remain open. We should think about putting the military in place to keep the border crossings moving even after the protestors are removed. To send a clear signal,” according to the transcript.
Freeland responds: “Couldn’t agree more with those points. We must make clear that 1) we will resolve this 2) we won’t let this happen again.”
Another bank CEO (with name redacted) says to Freeland, “[right now] we need court orders to act. We had identified an individual who is an organizer who had several hundred thousand dollars move into their accounts, we flagged it to FINTRAC… started work on a court order and because of the delay of 4 hours, the money was withdrawn before we could stop it.”
Freeland asks, “Was the problem there… a gap in the current system or [that] it moves too slowly?”
“Four hours was too long,” was the banker’s reply. “The problem is AML [anti-money laundering] is focused on finding bad money turning to good. This is about good money turning to bad… if we listed them as terrorists we could move fast.”
Take a moment to let that sink in. If we listed them as terrorists we could move fast.
There are two points I want to make here.
The Criminal Code defines terrorism is an act committed "in whole or in part for a political, religious or ideological purpose, objective or cause" with the intention of intimidating the public “…with regard to its security, including its economic security, or compelling a person, a government or a domestic or an international organization to do or to refrain from doing any act." Activities recognized as criminal within this context include “death and bodily harm with the use of violence; endangering a person’s life; risks posed to the health and safety of the public; significant property damage; and interference or disruption of essential services, facilities or systems.”
There is clearly room here to include many forms of disruptive protests, including ones based on environmental issues, under the broad heading of terrorism, if they disrupt the economy. Indeed, one of the head bankers who participated in Freeland’s zoom call was suggesting the Freedom Convoy protestors should be listed as terrorists based on this definition.
Second, the banking establishment, with the agreement of Canada’s finance minister, is signalling that the judicial system takes too long when it comes to freezing bank accounts. In other words, some of the most powerful people in the country are advocating for punishment by extrajudicial means.
Screen grab from drone video taken of the big rigs converging on Wellington Street in Ottawa as part of the “Freedom Convoy” on January 28, 2022. The invocation of the Emergencies Act allowed for the use of “financial tools” against organizers without due process or proper notice.
Mismatch between reality and what’s being portrayed as an increasing domestic threat level
I have dipped my toe into the field of digital identification schemes and wrestled with the viability of democracy in the age of “surveillance capitalism” and if you’ve been following my posts, you’ll know that I’ve come away from these forays deeply worried.
The enhanced authority to use “financial tools” in matters deemed by the minister of finance to be “related to national security”—outlined in Part 1 of this series— is particularly worrying because it is happening in tandem with three other developments.
First, the category of what qualifies as a national security threat has expanded to include economic disruption, and cyber-security threats—"informational activity” that can cause “minor or major harm” such as misinformation, disinformation, and malinformation (MDM).2 This is subject matter we’ll return to in Part 3 of this series.
Second, for the first time in 2019, the government of Canada began adding names of groups and individuals to the Criminal Code’s terrorist listings: In 2019, it added two “ideologically motivated violent extremist” (IMVE) groups to the list and in 2021, the government placed 17 new groups on the list.
Third, the rhetoric about how the domestic threat level is increasing has been ramping up.
For instance, earlier this year a piece by the Canadian Press (on the CBC) was titled, “Anti-authority narratives could tear ‘fabric of society,’ intelligence report warns.” It was referring to a report by a federal task force tasked with safeguarding elections. CP obtained the report in full through an Access to Information request and reported that the document stated, “the Canadian violent extremist landscape has seen the proliferation of conspiracy theories, a growing lack of trust in the integrity of the state and more political polarization.”
But when you turn to the task force’s published findings about what was actually observed during the four Canadian by-elections it was tasked with safeguarding, you learn that the task force “did not observe, at any time, any indication of foreign influence directed at the by-elections,” or any “threats of violent extremism.”
Strangely, these findings were excluded from the CP reporting on the subject.
Similarly, during the Public Order Emergency Commission (POEC) it was revealed through the testimony of Ontario’s Intelligence Bureau Commander that claims of national security threats posed by the “Freedom Convoy” or its organizers were not based in any evidence. As I’ve previously written, Superintendent Patrick Morris told the Commission that there was no evidence “in the intelligence” of espionage, sabotage, or foreign influenced activity that involved the threat to any person relating to the Ottawa blockade.
Morris also said that while he heard media and social media accounts of the threats – what he called “online rhetoric” – he was “aware of no intelligence that was produced that would support concern in that regard.” Despite this reality, and the “minimal amount of violent crime throughout the event”—Morris said there were ten charges laid for violent crimes and six were against police officers—the “public discourse… is providing a very different picture than what law enforcement collectively gathered. It is painting a different picture – it speaks to extremism, it offers parallels to terrorism, it speaks of sedition.”
The question is, where is this “different picture” coming from? The POEC hearings provide some insight.
Superintendent Patrick Morris (R) is the Commander of the Ontario Provincial Operations Intelligence Bureau (POIB). Brendan Miller (L) is the lawyer representing Freedom Corp—the entity that represents the protesters.
Economic disruptions posed by protest deemed national security threat
During the hearings, the prime minister’s security and intelligence advisor, Jody Thomas argued that the definition of “threat to security of Canada” under the Emergencies Act should change to reflect the times. As I previously reported here, Thomas told the commission that she was aware of CSIS’s conclusion that the Ottawa protests did not meet the threshold necessary to declare a national emergency but she felt the intelligence agency’s mandate needed to be “modernized.” Thomas also told the commission that the definition of a threat to “national security” should be made in a policy and not in legislation, and that it should be crafted by Public Safety Canada, the department in charge of public safety.
Indeed, Public Safety Canada does have a much broader interpretation of what constitutes a national security threat, and it includes “economic-based threats” to national security, and the “intentional disruption” of “globalized supply chains.”
Perhaps we should be reminded of what finance minister Chrystia Freeland said during her testimony to the POEC about the Ambassador Bridge blockade.
But first, here’s some important context:
A few months before the Ottawa protest and bridge blockades, it was reported that US president Joe Biden brought in a “Buy America” provision that gave tax credits to Americans who buy union-assembled electric vehicles and batteries manufactured in the US. While the bill was awaiting approval in the US Senate, Freeland along with Mary Ng, minister of international trade, sent the Senate leadership a letter threatening to impose retaliatory tariffs on a slew of US-made products if the proposal became law. Part of the argument the ministers made was how important Canada is to the auto sector—pointing to the fact that vehicles built in Canada are 50 per cent US-manufactured parts, with more than $22 billion in US auto parts being imported by Canadian manufacturers per year.
Much of this content enters Canada via the Ambassador Bridge. According to one news report, the bridge plays a crucial role in the movement of goods between the two countries—totalling nearly $200 billion in 2021 alone—or 30 percent of $664 billion, the total value of all goods moved.
While the blockade was having an economic impact in the US—forcing car plants to halt or reduce production due to a shortage of parts—it was also a huge embarrassment, not only for the Canadian auto sector, who fought hard to impress upon US lawmakers that the US needed Canada, but also for Freeland, who feared that Canada would now be seen as a vulnerability when it came to the global supply chain.
The Ambassador Bridge blockade was having an “exponentially damaging impact on the economy,” “making it a hugely significant economic action,” Freeland told the POEC.3
Freeland also said her “team” met around the time that the Ambassador Bridge blockade started to determine what already existed in the “tools” available to the Department of Finance to deal with the situation and whether FINTRAC or the Banking Act could be “useful in resolving the situation.” They looked at the existing tools available to them at that moment and “realized pretty quickly that everything that could be utilized was being utilized.”
Freeland and her team then looked at what would be needed legislatively so that there would be authorities created that could deal with a situation like this in future and a memo was drawn up discussing all the legislative amendments that would be necessary. FINTRAC needed updating, Freeland explained, because it was only a monitoring authority providing “situational awareness in terms of what’s happening in terms of illicit financial flows in Canada… [but] FINTRAC’s line of sight was blinkered,” and did not include the payment platforms or crowdfunding platforms. This authority was later provided to FINTRAC through legislative amendments. The memo also addressed whether The Bank Act could be used to “allow the banks to effectively freeze accounts,” and what “would be the different authorities that would allow that.”
Freeland noted that a “legislative path… takes a long time”
“The legislative timeline was not appropriate to the scale and speed with the [economic] damage was mounting,” said Freeland. “The danger” was not the “immediate danger” of a car plant closing for 4 days, it was whether the blockades were doing “irreparable harm” to our trading relationship with the United States, and that they would now perceive Canada as a “vulnerability.” Freeland also noted that companies all over the world invest in Canada because of our “trading relationship with the United States.”
About four days before the Emergencies Act was invoked, Freeland spoke to Brian Deese, who at the time was assistant to president Biden as well as being director of the National Economic Council. She wrote about the exchange in a text to a colleague:
“They are very, very, very worried. If this is not sorted out in the next 12 hours, all of their north eastern car plants will shut down…He [Deese] said that he supposed this proved the point that we made previously to them about how closely integrated our economies are. (He did not seem to see this as a positive),” she writes.
At one point in Freeland’s testimony, counsel for the Commission, Shantona Chaudhury brought up a text exchange between her and Flavio Volpe, head of the Automotive Parts Manufacturers’ Association, in which Volpe commented on how the “Ambassador Bridge debacle” is “embarrassing.” Freeland replies, “Let’s talk tomorrow. I would love to get your ideas. I am worried too.”
The next text between the two isn’t until February 14th, the same day the Emergencies Act is invoked, when Freeland writes: “I know how devastating this has been and am determined that we need to take strong action. We didn’t save NAFTA only to have it undermined.”
In her zoom call with the bankers, Freeland reveals—in what could qualify as Orwellian doublespeak—that free trade and neoliberal capitalism trump democratic principles.4
“I am very resolute in ending this occupation of our democracy… I will never support negotiation with those who hold our democracy hostage. No good thing comes from that. Don’t be confused that this is about a public policy issue. You don’t shut down the Ambassador Bridge because of a public policy view.”
Screen grab of video of blockade on the Ambassador Bridge linking Detroit with Windsor.
No spike in suspicious transaction reporting around the Freedom Convoy, says Canada’s financial intelligence director
According to Freeland, crowdfunding platforms were risky because they could, and were, being used as a vehicle to move funds associated with money laundering or terrorism, and therefore had to be regulated by FINTRAC.
But the day before TD applied to the court to empty the bank accounts of Tamara Lich’s crowdfunded money, and a few weeks before Canada permanently amended the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to include crowdfunding platforms, an interesting thing happened.
The deputy director of the country’s financial intelligence unit (FINTRAC) in charge of tracking these kinds of transactions in Canada appeared before the Standing Committee on Public Safety and National Security and raised serious doubts about whether there was a need to include crowdfunding platforms in the Act. 5
Barry MacKillop noted that while it was true that crowdfunding sites were not a regulated business sector under the law, he felt the transactions were already covered under the Act because the crowdfunding sites “transit with or through businesses [that are] subject to the Act.”
“We are always looking for other sectors that might be covered by the act in order to improve our system. However, I don't think we can just add sectors because they are being used. What needs to be determined is whether a given sector is at risk of money-laundering or financing terrorism.”
MacKillop says that FINTRAC does not consider crowdfunding platforms to be “tools” for money-laundering or terrorism financing.
For one, the donations are not anonymous. People have to use a credit card and go through some type of Internet payment system like Stripe or PayPal. The companies that process the donations know who made the donation and where it’s going, even if it’s listed as “anonymous” on the public-facing site.
He noted, “there are many other ways that are probably easier to use to launder money or collect funds to finance terrorist activities,” and also that these platforms are used to benefit people all over the world.
“Current internet platforms are accessible to everyone around the world. They can be used to donate funds to a cause… GoFundMe may have been used to help people get out of Afghanistan, for example… I believe that crowdfunding platforms have been very useful in collecting funds to help people in need around the world.”
MacKillop also notes, “It's important to know what these platforms can give us in terms of intelligence… There has to be a balance between the desire to have as much information as possible and the protection of privacy. As the deputy director responsible for intelligence, I would like to have as much intelligence as possible. However, a balance must always be struck between what is reported to FINTRAC and respect for people's privacy and financial information.”
MacKillop also noted that while crowdfunding platforms themselves were not regulated by FINTRAC at the time, money services businesses like credit cards, PayPal and Stripe, which feed money to the crowdfunding platform, and the banks which receive it, were are all regulated to report suspicious transactions and have “clear guidelines” about what to look for when monitoring transactions.
For example, we have five very successful public-private partnerships dealing with human trafficking, fentanyl trafficking, romance scams, underground banking and child sexual exploitation material on the Internet. We have set out these PPPs, as we call them, with our recording entities and we provide very actionable indicators that they can plug into their own systems to create the algorithms to assist them in identifying suspicious transactions that may be related to those types of predicate crimes.
We've also provided them with terrorist financing indicators and IMVE [ideologically motivated violent extremists] indicators to assist them in identifying those types of transactions.
As background, it should also be noted that when money goes through a Canadian bank, the bank knows what the listed terrorist organizations are, and if the money was headed there, it would be stopped by the bank and FINTRAC would receive a “suspicious transaction report.” The banks cannot facilitate the transfer of money to a listed terrorist organization. According to MacKillop, the banks are “well aware of those organizations and the individuals associated with those organizations. They know who they are. They have their sanctions list. They do their monitoring. They do their reporting and they do it well.” 6
During MacKillop’s testimony to the parliamentary committee, Liberal member of parliament, Taleeb Noormohamed asked with regards to the trucker protests, which were ongoing at the time: “We've seen over the course of the last little while a lot of interest from the United States in the funding situation related to GoFundMe and the blockade in Ottawa… How concerned should Canadians be about foreign funds coming into Canada and spurring on ideologically motivated violent extremism?”
MacKillop: “What's happening in Ottawa has not been, to my knowledge, identified as ideologically motivated violent extremism.”
Noormohamed: “Do you have any concerns or have there been any flags raised thus far around potential sources of funding for what has been happening in Ottawa.”
MacKillop: “No. In terms of the sources of funding that we've seen to date… we have not seen a spike in suspicious transaction reporting related to this.”
[Stay tuned for Part 3 of this series, which will look further at how participatory democracy is being eroded and dissent is being stifled—including in the field of journalism—all in the name of safety and security]
Postscript: Barry MacKillop and Daniel Lambert, two senior FINTRAC officials were escorted out of the watchdog’s Ottawa office earlier this year for allegedly sharing another employee’s personal information. According to a news report, the two men are currently on an indefinite leave during a continuing human-resources review.
At time of writing, the POEC provides the most detailed account of what happened to the money raised, and it’s pretty complicated: see pp. 96- 103. It is interesting to note that the Commission did not receive any indication during the hearings that any of the funds raised by the Ottawa protests went to the border blockades.
The cyber-security bulletin was released in February 2022—around the time of the Ottawa and border protests—by the Canadian Centre for Cyber Security.
From Freeland’s testimony November 24, 2022 (25:35).
This very limited view of what democracy means was challenged by the CCLA during the POEC and reported on here.
According to MacKillop, FINTRAC does not investigate or seize or freeze funds, nor does it ask any financial institution to delay a financial transaction, only financial institutions do that. FINTRAC provides guidelines to the banks about what they need to report to the agency, but it does not tell them how to manage their own risk or the accounts of their clients.
Ok Got it. Did not work from the email but does from the app.
Great summary of the activities of our pathetic governors. I missed Part I and can’t find it in my crowded inbox. Please post a link. Many thanks.