FINTRAC's sideshow

Following the money, but a little late

Following the money is always an important aspect of any national security investigation. But in the bigger picture of intelligence monitoring of the Freedom Convoy, FINTRAC (Financial Transactions Reports and Analysis Centre of Canada) was a minor player. This was a product of its history and the limits of its mandate at the time. (See the previous guest expert column by John Pyrik)

FINTRAC was a post 9/11 invention that added a component of terrorist financing reporting to a pre-existing agency responsible for money-laundering intelligence. The assumption seemed to be that the mechanisms for terrorist financing and criminal money laundering would be essentially similar. Most of the work done by FINTRAC in the years since has focused on the money-laundering side of the agency. FINTRAC operates in the intersection between the banks (and other financial service providers) and the RCMP. The system works as follows. Banks are required by regulation to report suspicious transactions (STRs) that may involve money laundering or terrorist financing to FINTRAC. FINTRAC may, in turn, take these STRs, triage them, and investigate further. If FINTRAC finds that there is reasonable evidence of money laundering or terrorist financing, it can provide a report to the RCMP, which would then engage in a follow up criminal investigation. Its a complex system, with multiple responsibilities.

Recently released records provided to the Public Order Emergency Commission have cast some additional light on the work of FINTRAC. (These reports have not yet been posted to the Commission website so I can’t cite record numbers)

A draft report prepared in February 2022 provided an overview of FINTRAC’s outlook on what it described as “Terrorist Financing Risks of Freedom Convoy.” It is important to understand, as the report itself makes clear, that “terrorist” refers to a criminal code definition (s83.91(1)(b)) that is broader in scope than what may be commonly understood as terrorism, especially as the term has often been used in public discourse after the Al Qaeda 9/11 attacks. The broader scope definition has several components, including a motivational element (political, religious or ideological purpose); an intention (essentially an act of intimidation regarding public security); and a degree of seriousness (causing death or serious bodily harm, endangering life, or causing a “serious risk to the health or safety of the public or any segment of the public”).

The FINTRAC draft report canvassed various pieces of open source intelligence on the Freedom Convoy that might demonstrate risks of violent extremist activity (IMVE—”ideologicallly motivated violent extremism”) and might reach the legal threshold of the criminal code definition of terrorism. FINTRAC, like other components of the federal national security and intelligence system, was struggling to determine whether the activities of Freedom Convoy protesters actually reached that threshold. FINTRAC had no answer at the time—the purpose of the report was to urge the need for development of what it called “strategic financial intelligence.”

In the midst of fast-moving developments with the Freedom Convoy, FINTRAC’s “strategic financial intelligence” was late to the game. Another FINTRAC document is revealing in that regard. Two days after the invocation of the Emergencies Act (February 14, 2022), FINTRAC was still trying to put together reporting on the potential threats involved by Freedom Convoy fund-raising using crowd source platforms and virtual currency. All that FINTRAC could say on February 16 is that it hadn’t observed, through the reports that had reached them by that stage, “any increase in STRs related to convoy financing.”

FINTRAC was also struggling with a legal question of whether it could access data from a hack perpetrated against the “GiveSendGo” crowd funding site that the Freedom Convoy had turned to after its original site, “GoFundMe” had frozen its account. The hackers released donor data from GiveSendGo related to the Freedom Convoy on Sunday evening, February 13. The hackers posted a message that read, in part, “Attention GiveSendGo grifters and hatriots. The Canadian government has informed you that the money you a…holes raised to fund an insurrection is frozen…” The hackers also linked GiveSendGo to the Trump-backed January 6 insurrection on Capitol Hill.

Whether FINTRAC felt able to push through this legal quandary and access the hacked data is unknown at this time.

The importance of access to GiveSendGo data revolves around the extent of foreign sourced money that was designed to support the Freedom Convoy (little of it actually made its way into their hands) and whether any of the donations could be linked to malicious activity by foreign states.

Foreign interference was the ultimate question for any strategic financial intelligence effort. To date we don’t know what, if anything, might have ultimately been discovered by FINTRAC about foreign interference efforts. The Commission’s overview report on “Fundraising in Support of Protestors,” merely notes that 59% of the donations to GiveSendGo originated from the U.S. The monetary value from US donors was $4,593,686.50 USD, which more or less equaled the monetary value of donations from Canadian sources. That’s it.

https://publicorderemergencycommission.ca/files/overview-reports/COM.OR.00000005.pdf?t=1667925554

One of the challenges for the Commission will be in deciding, in its final report, whether to recommend that something be done about disallowing foreign funding to overtly political protest in Canada. That, it is safe to say, would be a minefield. At the very least, the Canadian national security and intelligence system needs to up its game.