RCMP Watch

Peter Brieger (Financial Post) - The fledgling RCMP units created to fight white-collar crime have generated “disappointing results” that highlight a lack of leadership, high staff turnover and laws that make prosecuting fraud more difficult than in other countries, particularly the United States, says a new report by the former Superintendent of Financial Institutions.

The public may have “unrealistic expectations” for the Mountie’s Integrated Market Enforcement Teams (IMET), which were launched less than four years ago, but that doesn’t excuse the program’s poor track record, Nick Le Pan wrote in the review commissioned by the RCMP.

“The IMET program cannot just hide behind the lack of realism in expectations,” he wrote in the report, made public yesterday. “It contributed to those unrealistic expectations initially [by unrealistically promising to complete investigations within a year], but has done little to communicate effectively more reasonable expectations since then.”

“Results do need to be, and I believe can be, better within the current legal framework.”

Commercial crime needs to be given higher priority by the RCMP and investigations must speed up, Mr. Le Pan wrote, adding that money alone won’t help the situation.

“Without better leadership, management and oversight, more money will not help, though more money is needed,” he wrote in the 77-page report.

The commercial crime teams currently have 13 active investigations on their plate with just one conviction since IMETs launched in 2003, Mr. Le Pan said. There are four cases in which the Crown is considering laying criminal charges, he added.

“Without at least some charges and convictions, the goal of promoting confidence in Canada’s capital market cannot be met,” Mr. Le Pan wrote. “Credibility comes from results. Attracting and retaining people for investigations and prosecutions would be easier if there were more results.”

Mr. Le Pan’s report comes after former Supreme Court Justice Peter Cory and Osgoode Hall law professor Marilyn Pilkington argued in a widely cited report that commercial crime cases are hampered by the RCMP’s lack of sophisticated knowledge about the capital markets and that penalties for white-collar crime are inadequate.

Meanwhile, the Mounties’ commercial-crime unit must also address a 21% vacancy rate, which is more than “what well-managed public and private sector professional organizations would target,” Mr. Le Pan wrote. Two dozen of the 71 RCMP officers who worked in IMETs have left for other departments and all the officers who headed the teams when they launched are also gone.

However, Canadians often misunderstand that there is a higher standard of evidence required for a criminal conviction than what stock-market watchdogs need to lay regulatory charges. As well, prosecutors in this country don’t have the same latitude as state and federal prosecutors in the United States, he added.

Crown prosecutors, for example, cannot force a person who is not being investigated to hand over evidence, or charge people over the course of a major investigation, Mr. Le Pan wrote. “Expectations of U.S.-style results are unrealistic given Canada’s different legal environment,” he said.

And while there are “generally good working relations” between IMETs and provincial securities regulators, their interests don’t always match when both are probing an alleged crime. With 13 different regulators across the country, it can be “difficult and time consuming” to reach consensus on certain issues, Mr. Le Pan said.

The report’s extensive recommendations include reducing delays by improving cooperation between the RCMP and Crown prosecutors as well as securities regulators; boosting program funding; aggressively pursuing all “investigation and prosecution options” allowed under Canadian criminal law; and improving oversight to generate speedier results.

Jim Flaherty, the federal Finance Minister, welcomed the report. He told reporters in Edmonton, where he was giving a speech, he’ll be talking about the report next week with his provincial counterparts.

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Number of major investigations to date - 13
Charges laid to date - 1
Cases in which charges could be laid - 4
Conviction/guilty pleas to date - 1
Source: Enhancing Integrated Market Enforcement Teams, Achieving Results In Fighting Capital Markets Crime