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~Jess

In 2023, the Government of Canada established the Public Inquiry into Foreign Interference. The focus of the inquiry is foreign interference in federal electoral processes and democratic institutions. The current phase of the inquiry is reaching more broadly to understand the capacity of the government to detect, deter, and counter foreign interference.

I was asked to participate in the roundtable on political financing, and I focused on comments on foreign interference financing, drawing on international examples (and some Canadian) of concrete FI activity and its financial mechanisms. If you’re interested in this topic, you can check out all the roundtables here. I recommend you watch the roundtables from Wednesday, 23 October, on Canada’s national security apparatus and enforcing, deterring, and prosecuting foreign interference activities. Those two panels featured some faces that are likely to be familiar to readers of this newsletter (I have worked with several of these folks, both academically and professionally), and there were some very interesting and innovative ideas for combatting foreign interference.

The main takeaway from both of those panels, plus my own, is that, by and large, we do not need new offences for dealing with foreign interference. My own recommendations focus on structural changes and some tinkering with the Proceeds of Crime, Money Laundering and Terrorist Financing Act and associated regulations, but more on that next week when I submit my final report to the Commissioner.

For today, here’s a summary of my comments on what foreign interference financing looks like and a link to my presentation and questions and answers. I was very heartened by the Commissioner’s interest in financial intelligence, the role of FINTRAC in all of this, and getting to the facts. This was my second time participating in a Commission of Inquiry, and this was an excellent use of my time.

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Foreign Interference Financing

Foreign interference requires resources and money. It takes money to build disinformation networks, pay influencers, and spread messages. It also takes money to engage in transnational repression activities, whether that’s through official salaries, bonuses, or stipends. It also takes money to buy votes, fund candidates and parties, and ensure that voters who support a particular message make it to the polls.

Financing has been a neglected element of foreign interference investigations and research. As such, I focus on international examples of foreign interference financing (some of which will also reflect what the commission has heard here in Canada) and will aim to give concrete examples of how money enables foreign interference.

These cases inform a discussion of Canada’s strengths and vulnerabilities (in terms of legislation, regulation, and capability). While there are some areas of improvement for Canada in terms of legislation, the vast majority of the work Canada needs to do to exploit financial intelligence for foreign interference financing disruption is in investigations: resources, skills, and political will.

Canada needs to invest in its capabilities to detect and disrupt foreign interference. This applies to its financial intelligence unit, FINTRAC, and its law enforcement and security services responsible for conducting these investigations. They must understand and exploit financial intelligence in the foreign interference space.

Financing Foreign Interference Activities

States use various methods to interfere in the politics of other countries:

• Financing Political Parties and Candidates: Foreign actors have financially supported political parties and candidates aligned with their interests. These funds can be direct donations, loans, or other financially advantageous transactions.

• Funding Political Campaigns: Foreign governments have also funnelled money to support specific political campaigns. This funding can provide a significant advantage to the recipient, potentially distorting the electoral process and undermining fair competition.

• Incentivizing Voters: Foreign actors also directly target the electorate to influence voting behavior, such as discounted flights, shopping vouchers to encourage return to vote.

• Vote Buying: Vote buying is another potential method of foreign interference. While not as common as other tactics, it involves offering money or incentives directly in exchange for votes.

• Exploiting Diaspora Communities: Foreign actors also attempt to leverage their diasporas to influence elections in their host countries. This can involve mobilizing support for favoured candidates, providing financial contributions, or even engaging in voter intimidation.

• Misinformation / Disinformation: State actors will also spread mis- and dis-information in elections (and outside of election periods) to shape the information battlespace. In some cases, state actors pay troll farms to amplify particular messages.  In other cases, states pay for advertisements, sponsor investigative journalism, and pay for interviews to promote their interests.

Financial Transactions in Foreign Interference

The activities involved in foreign interference financing are essential to understand, as are the transactions that support these activities. These usually involve cash payments, cryptocurrency transfers, loans, and bank transfers, as well as the use of third-party intermediaries, foundations, think tanks, organized crime groups, political consultancies, shell companies, state-owned enterprises, and sometimes embassy accounts and resources. Gifts and luxury goods are also used to compensate threat actors for their role in foreign interference. In-kind donations (payment of legal fees, buying media space to promote a selected candidate or party) and even transportation subsidies to ensure voters get to the polls are all examples of financial transactions involved in foreign interference.

Obfuscation: State actors often use intermediaries (including friends, family members, and trusted business associates) to send and receive funds on behalf of or in support of the political candidate or party and to obfuscate their role in the interference activity. In some cases, financial institutions might be co-opted to enable the transfer of funds with less scrutiny. Finally, states also pressure donors to give money to specific candidates.

These activities and transactions outline how Canada’s adversaries finance foreign interference activities. Much more research needs to be done to establish more robust patterns of activity that can be used to support detection and disruption. For now, however, this high-level description can inform discussions on legislation, regulations, policy, and enforcement.

You can watch my full presentation (and question & answers) here (starting around the 24-minute mark):

More to follow after my final report (including sources and recommendations) are shared with the Commission.

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In early September, the US indicted two Russian nationals for money laundering and failure to register as foreign principals. The indictment accuses the Russians of setting up a conservative media outlet as a front for Russian propaganda.

The US considers this a form of foreign interference, stating that:

“While the views expressed in the videos are not uniform, the subject matter and content of the videos are often consistent with the Government of Russia's interest in amplifying U.S . domestic divisions in order to weaken U.S. opposition to core Government of Russia interests, such as its ongoing war in Ukraine.”

The indictment claims that US Company-1, a Tennessee-based online content creation company, never disclosed to its viewers that it was funded and directed by RT.1 Russia uses RT to direct disinformation and propaganda at Western audiences. The indicted Russians are both citizens of Russia and employees of RT. There is no indication that the Russians are in the United States or have been arrested.

Tenet Media

The indictment refers to entities as “US Company 1”, “Canadian Company 1”, “Founder 1”, and “Founder 2” and indicates that these companies and founders have a significant connection to Canada. US Company 1 has been widely reported to be US-based Tenet Media. There’s compelling evidence that this is the case, and I recommend you review some of these sources to see that evidence. Journalist Aric Toler does a great job of linking the indictment to open information. You can review his thread here. Plenty of details match. For instance, the indictment says Founder 1 incorporated a US company in Tennessee on or about January 2022. This matches the date and location for the incorporation of Tenet Media, which was incorporated on 19 January 2022 under the name Roaming USA Corporation but changed to Tenet Media a few months later. The business was incorporated by Lauren Tam and Liam Donovan was later added as a registered agent (see corporate document below).

While not currently facing charges in the US, the indictment states that Founder 1 and Founder 2 (widely reported to be Canadians Lauren Chen and Liam Donovan) did not register as the agent of a foreign principal as required by law (the US FARA Act). This article focuses on the role of the Canadians in this foreign interference case.

(I’ve redacted addresses for the business — some of which are residential, and one of which is commercial. This is still available through the business registry, but there’s no need to share that info here.)

Roaming Millennial

Now that we’ve established that Tenet media is very likely US Company-1 in the indictment, it’s worth taking a closer look at Chen/Tam, Donovan, and their corporate holdings. Lauren Chen’s real name is Lauren Yu Sum Tam (Lauren Tam, as per the registration for Tenet Media), and Chen/Tam’s husband is Liam Donovan. These two are also directors of the company Roaming Millennial Inc., established in Canada in 2017.2 (Roaming Millennial is also Chen/Tam’s YouTube moniker.) Roaming Millennial is very likely Canadian Company-1 in the indictment. Tenet Media is described as a subsidiary of Roaming Millennial Inc, but I haven’t found any legal documents to establish that fact. Regardless, Chen/Tam and Donovan control both entities.

One name stands out from the corporation documents — Tracey Roseborough. It’s not clear who this is. She originally signed the Roaming Millennial corporate documents when the company was established back in 2017. Roseborough’s address is listed in Quebec, while the corporate documents identify an address for service in Winnipeg. A little digging identifies MLTAikins as the likely law firm for Chen/Donovan and Roaming Millennial in Canada:

• This law firm shares a street address and a floor in the building with the address for service on the corporate documents. While several other law firms and consulting companies are domiciled in this building in Winnipeg and likely offer incorporation services, no other firm lists an address on the same floor as MLTAikins.

Because Roseborough’s address is in Quebec, and the law firm is in Manitoba, it seems unlikely that the firm would have used someone from another province to register the corporate documents, which means that Roseborough’s connection is more likely to be a friend or family (Chen/Tam’s mother reportedly lived in Quebec). Why Chen/Tam didn’t sign the incorporation documents herself is a mystery.

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Working for RT

According to the indictment, Founder-1 (aka Chen/Tam) began working for RT in the spring of 2021. From March 2021 until February 2022, Founder-1 (Chen/Tam) wrote articles to fulfill a written contract between Roaming Millennial and RT’s parent organization, ANO TV-Novosti.3 After the Russian invasion of Ukraine in early 2022, Chen was asked to launch a new YouTube channel and recruit high-profile personalities to create Russia-friendly content. Founder-2 (Donovan) also worked directly for RT and with Ruptly GmbH, RT’s German subsidiary, from October 2021 until May 2022.

The Money

The indictment also outlines a series of financial transactions that took place between Chen/Tam, Donovan, their companies, RT and its subsidiary, and shell companies located in:

• Czech Republic;

• Hungary;

• United Kingdom;

• Türkiye (two shell companies);

• United Arab Emirates (three shell companies in Dubai and Ras Al-Kaimah); and

• Mauritius.

The Czech shell company had a website purporting to sell automobile parts but also listed unrelated services (a common practice when trying to obfuscate the fake nature of a shell corporation). Some of these jurisdictions are known jurisdictions of concern for money laundering, both now and in the past.

Between October 2023 and August 2024, Tenet Media received approximately 30 wire transfers from foreign entities to its US bank account, totalling roughly $9.7 million, while they invoiced a UK shell company for $9.3 million. Chen and Donovan also invoiced the UK shell company for their personal fees, totalling $760,000. Tenet Media’s inbound wire transfers ascribe the payments to the purchase of electronics, not a known business line for the media company. In money laundering or other illicit financing cases, a fake reason for the transaction is often included in transaction details.

Criminal Sanctions Evasion?

In July 2022, RT was sanctioned under Canada’s Russia Sanctions (SEMA). Some media reports have suggested that this was a breach of sanctions. Global Affair’s Canada’s sanctions page says the Regulations “impose an asset freeze and dealings prohibition on designated persons listed in Schedule 1, which include both individuals and entities.” The actual regulations are worded a bit more vaguely, omitting the language of broader sanctions.

Whether or not the activities of Chen/Tam and Donovan are covered under Canadian law depends on whether payment for services constitutes dealing in any property held by or on behalf of a designated person (entity) (3(a)). (If this provision applies, b also likely applies.) The drafters intended to effect a broad ban on transactions, but whether a court would uphold this interpretation remains to be seen. The lack of case law for Canadian sanctions is an issue for interpreting precisely what is meant here.

Further supporting the interpretation that “dealing in any property” includes payment for the services is the use of shell companies. Chen/Tam and Donovan are alleged to have been paid by RT, its parent company and subsidiary, through a series of shell companies. RT had to effect payment in this manner because no Canadian or US bank would accept payment for services from RT directly, a sanctioned entity, or its subsidiaries or parent companies. Facilitating the transaction would constitute dealing in the sanctioned entity’s property, so it stands to reason that receiving payment from this property could also constitute dealing.

According to the indictment, the relationship between the Canadians, their companies, and RT does not appear to have ended with the imposition of Canadian sanctions. Instead, Chen/Tam signed a contract to recruit conservative media personalities for a YouTube channel, and Chen was billing RT through Roaming Millennial Inc.

While none of these accusations have been proven in court, the indictment suggests some bad things. Indeed, it goes so far as to accuse Chen and Donovan (through their likely monikers of Founder-1 and Founder-2) of being unregistered foreign principals in the US, so an indictment against them might be forthcoming.

Public Safety Minister Dominic LeBlanc said: “Canada has been working in close cooperation with the U.S. and other allies on this serious matter. While we are unable to comment on ongoing investigations, we are united in confronting Russia’s aggression and subversion against democratic societies and we will not hesitate to take any actions necessary to hold Russian threat actors to account.”

One law that likely does not apply to this case is the Foreign Influence Transparency and Accountability Act. Despite working for a foreign news agency and propaganda outlet, and not declaring that relationship, Chen and Donovan would not have been required to register as foreign principals because this component of the Act only applies to individuals and entities engaged in influencing political and governmental processes:

“The political or governmental processes in question include any proceeding of a legislative body, the development of a legislative proposal, the development or amendment of any policy or program, the making of a decision by a public office holder or government body, including the awarding of a contract, the holding of an election or referendum and the nomination of a candidate or the development of an electoral platform by a political party.”

During the development of Bill C-70, there was discussion about requiring the disclosure of payment by foreign actors for the creation of content (including opinion pieces), but that was not included in the final draft of the bill.

Another issue in terms of a potential prosecution relates to the nature of the information collected in this case and whether it can be used in a court of law. US intelligence is often successfully used in prosecutions, while in Canada, we still encounter the “intelligence to evidence” problem. How the information about the shell companies and their relationship to RT was obtained might complicate matters. On the other hand, payments to Canadian bank accounts create a reliable money trail.

This will undoubtedly be a case to watch and has the potential to set important precedents for both foreign interference and sanctions evasion.

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In recent years, the lines between organized crime and state-backed threats have increasingly blurred, particularly in cases of foreign interference. While this is not an entirely new development (the intersection of state threats and criminal elements has a long history throughout the Cold War and beyond), states are now more frequently employing criminal entities to carry out targeted killings, acts of intimidation, and other forms of interference. Iran has led the way with quite a number of assassination attempts, kidnappings, and intimidation activities against political dissidents and activists and using criminal organizations to do their dirty work. However, India has also played this game in the United States and Canada.

The Swedish intelligence agency (Säpo) recently confirmed that Iran has employed local crime rings to attack Israeli and Jewish targets, particularly Israeli embassies in Europe, following the events of October 7th. In one instance, the leader of the Foxtrot organized crime group was recruited by Iranian agents (in Iran) after fleeing Türkiye in an effort to evade international law enforcement. Iranian authorities arrested and recruited him, and had him direct his criminal organization on their behalf.

This is far from the only case of this type of activity. Read to learn more about the intersection of state and criminal threats (and their financing) and how to counter this evolving issue:

In 2015, Mohammad Reza Kolahi Samadi was assassinated in the Netherlands. He had previously been sentenced to death in Iran after being accused of planting a bomb in 1981. A suspected Iranian intelligence agent was convicted of hiring two known criminals to kill Samadi. Iran has also been accused of ordering the attempted assassination of a Spanish politician, Alejo Vidal-Quadras.

Iran’s intelligence service was also recently accused of hiring Canadian Hell’s Angels to kill political dissidents in the United States. In response, in January of 2024, the US and the UK jointly sanctioned Iran’s transnational assassinations network.

Iran provides funding and direction directly to its criminal proxies, likely through drug smuggling and the activities of the Islamic Revolutionary Guards Corps. The IRGC is widely believed to control narcotics distribution inside Iran, which makes them prime candidates to interface with other criminal entities. In particular, Iran-based nacro-trafficker Naji Ibrahim Sharifi-Zindashti is believed to be “intertwinted” with Iran’s foreign interference efforts (transnational repression). Iranian security forces protect Zindashti and his criminal network. This network has been “linked” to murders in the UAE, Canada, and Türkiye.

India has also been accused of using criminal proxies to carry out its assassination orders in the United States and Canada. In the US, an officer in India’s intelligence service (RAW) was accused of attempting to assassinate a US citizen and was also involved in the death of a Sikh activist in Canada last year. He used a hired hit team to try to kill a US citizen and succeeded in hiring a different hit team to kill a Canadian Sikh activist Hardeep Singh Nijjar. Four Indian nationals are accused of murder and conspiracy for killing Nijjar in British Columbia. They are all believed to be connected to the Lawrence Bishnoi gang, a criminal group from northern India that has spread into North America. The US job cost $100,000 and was going to be paid for in cash.

While money might change hands for particular assassinations and jobs, criminal networks can also be compensated for their services through protection by state security forces, allowing criminal empires to grow and thrive.

Other areas of state and non-state threat intersection exist as well. For instance, the Chinese government has been accused of providing subsidies to companies openly trafficking illicit synthetic drugs, and that “wholly state owned” companies are involved in drug trafficking. The US Select Committee on the CCP noted that the fentayl crisis has helped CCP-tied organized criminal groups become the world’s premier money launderers and has enriched the PRC’s chemical industry. While China’s refusal to address this issue might be profit motivated, there is no question that the fentanyl crisis has had a devastating impact in North America.

States use criminal elements to create plausible deniability for their actions and to acquire expertise and resources (like weapons). Without criminal networks, states would have to use their intelligence assets to conduct interference and assassination activities, putting their assets at risk of imprisonment and prosecution. This has been the case for North Korea, which has used its own agents in attempted (and successful) assassination attempts. Using state agents could also open countries up to detection if they were to try to bring a new asset into the country for a particular job, as many of the countries engaged in significant foreign interference and transnational repression are the subject of ongoing intelligence and national security investigations.

The intersection of state and non-state threats complicates investigations because it requires information and intelligence to be shared across very different threat streams and likely different classification levels. It also requires somewhat different knowledge and skills from investigators. State threats require in-depth knowledge of geopolitics, while criminal threats often require more localized knowledge. These investigations might also require sharing and coordinating across different jurisdictions and sharing information with local law enforcement, all of which come with bureaucratic hurdles and concerns about information security and intelligence sharing.

One way to track this kind of activity is through financial intelligence. Criminals are profit-motivated, which means that they want to be paid and have access to their wealth. Denying them either of these things removes some of their motivation for conducting interference and assassination activities on behalf of their state sponsors. On the other hand, states can use their resources to hide the source and use of these funds by using official accounts at embassies and consulates or even moving large amounts of cash into and out of countries through diplomatic pouches.

Using criminal actors to conduct state interference activities is a tried and tested strategy. Expect states to continue these efforts — and for states with little concern about being caught, they might even become more overt about using criminal actors.

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Regardless of the threat, it’s financed in some way. For example, if we look at threats as defined in Canada’s CSIS Act, we can see this link:

• Espionage requires money: often this is provided through state budgets, perhaps through embassies, in electronic funds transfers or in cash, but we are increasingly seeing espionage activities undertaken and financed through cryptocurrencies. States like Russia use espionage to undermine democratic principles and processes, and fund those activities directly from state coffers or through elaborate webs of companies, individuals, and accounts.

• Foreign influenced activities (aka foreign interference) are also financed in much the same way, but often using individuals as covers to provide payments to individuals or entities to help with things like the theft of intellectual property, to hide or obfuscate the true beneficial owner of a corporate acquisition (particularly in sensitive sectors like rare earth minerals,, aerospace, etc), or to simply pay individuals to undertake particular influence activities like intimidation of a diaspora community. Other examples include: Supporting the campaign of particular politicians, either through social media and influence campaigns, or in some cases through donations. These donations can be direct to the candidate, or might be received through third parties / proxies, in some cases in violation of election laws. States also pressure donors to give money to specific candidates.

  They also use information operations and social media amplification to promote a particular policy objective.1 They will also invest money, pay for advertisements, or sponsor investigative journalism or interviews to promote their interests.

• Terrorist activity of course also requires financing: terrorist groups, cells, and individuals need to raise money for their propaganda and attacks, and they move it domestically and internationally using our existing banking infrastructure as well as new technologies like cryptocurrencies.

There are also a number of other threats that have a financial component, like proliferation financing,2 sanctions evasion (those sanctions might be imposed on terrorists, human rights violators, war criminals, etc), and corruption & kleptocracy. All of these are threats to global security, and have a financial component that can be detected, and ideally, disrupted.

States and non-state actors seek to evade our detection mechanisms and finance these threats. We respond in a number of ways, including through investigation and prosecution, and also by implementing sanctions such as terrorist listings, state designations, and restrictions on import/export and investments.

In Canada, we actually have a fairly comprehensive framework to address threat financing. The problem is we lack measures of effectiveness, any real understanding of outcomes, prosecutions for violators, and meaningful investigative capabilities.  In many other countries (particularly outside of the five eyes), the concept of threat financing is developing, at best.

What we know so far:

Threat financing is a stable of threat activity, but metrics to describe it are limited. We know that there have been two successful terrorist financing prosecutions in Canada; this is far below the number from most other countries with similar counter-terrorist financing frameworks and capabilities. And there has been a financial component to every attack or thwarted plot in Canada, and FINTRAC told us in 2018 that Canada is a base for financing activities for a number of groups. But it’s unclear why Canada has so few terrorist financing prosecutions: is there a problem with the public prosecution service? Our investigative capabilities? Something in the legislation? Other countries have had more success in prosecuting terrorist financing; and while this is not the sole (or even best measure) of disruption, it’s often the most concrete, and a logical place to start.

In other types of threats, it’s the lack of data that tells the story. How many accounts have been frozen as a result of Canada’s terrorist listings? Unknown. How many Russian accounts / assets have been frozen as a result of sanctions? We don’t have a clear picture, but the RCMP has started to tell us a bit more, indicating that since February 2022, $135,671,223 in assets have been frozen in Canada, and $292,263,795 worth of transactions have been blocked. They also told us that $78,838 worth of assets in Canada have been frozen as a result of the Iran SEMA sanctions, and none under the Haiti regulations.

But there are more unknowns than known. Has Canada detected any efforts by Russia (or other state actors like the DPRK) to use Canada to evade sanctions? Unknown. But given Canada’s global connectivity, strong financial system, and technologically advanced economy, I’d estimate that there are some state and non-state actors seeking to use the Canadian financial system to their benefit. But we have little ability to detect and disrupt this activity, and almost no incentive for security and intelligence agencies to share any successes publicly.

When we look at this internationally, there are even fewer metrics.

On top of that, the diffuse nature of our system and framework for detecting and disrupting threat financing is part of the problem. We have a network of departments and agencies all with a small piece of the puzzle. Of course, attention often falls on FINTRAC, Canada’s financial intelligence unit. This is similar internationally - the financial intelligence unit is often thought to be the centre of financial issues. But in many cases, their role in threat financing is relatively limited, because they often don’t have an investigative mandate. They receive and disseminate reports, a critical function, but they are not the hub of detecting and disrupting threat financing. That role should fall to law enforcement and security services, but in practice, countering threat financing is not prioritized.

For instance, the RCMP has struggled to protect supposedly ring-fenced financial investigators and resources; instead, they have been assigned to ‘more pressing’ investigations. While we can all understand the need to prevent threat to life activities like terrorist attacks, we also need to think about the long term. We can’t continue to allow, for example, Hizballah, to run a financing network; it enables their attacks and activities against our allies and threatens regional stability and by extension Canadian interests (not to mention the reputational damage that we suffer from allowing this to continue).

Of course, CSIS also has roles and responsibilities in combatting threat financing; and while their activities will always be less public, given how little information is dedicated to threat financing issues in their public reports, I have concerns about their ability to detect and disrupt this activity, and to prioritize it within their investigations.

There are several other key members of what I consider Canada’s threat financing regime: CBSA of course, CRA charities directorate, Global Affairs Canada, and many other consumers and producers of financial intelligence like CSE, Export Development Canada, the Privy Council Office, etc. This is truly a whole of government issue, but one that has received far too little attention. Internationally, all of these bodies and agencies need to be working together to combat threat financing. I can assure you that rarely happens.

What we need to do

If Canada and its allies want a robust economy, a safe and secure financial system, a more secure global community, and a good international reputation, we need to modernize how we approach threat financing. Detecting, analyzing, deterring or disrupting threat financing needs to be front and centre of our global security discussions.

What threats to global security don’t have a financial component? What happens if we get better at detecting and disrupting the financing of threats in Canada, and internationally? I would argue that we would step more firmly into “prevention” territory, rather than reacting to emerging or developing threats. We would have the ability to detect and disrupt threats as they emerge (or even before); preventing the next terrorist attack is obviously a key objective, but so should be preventing states from using Canada and other countries as a means to evade sanctions, hide the proceeds from their kleptocracy, and acquire companies and intellectual property in sensitive or strategic sectors.

Ignoring this issue will mean that some states become a safe haven for a variety of corrupt and illicit actors; and once they become entrenched, they will become the launching pad for a variety of international security threats. When we think about global security threats, we must consider the financial dealings that underpin these activities, and focus on detecting and disrupting the flow of money.

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Let’s start by defining foreign interference and influence. According to the RCMP,

However, there is no definition in law, nor is there any law explicitly banning states from engaging in these activities.1 Note here too that the definition proffered by the RCMP emphasizes illegal, but not clandestine or deceptive, activities.

According to CSIS, foreign interference (also referred to as foreign influenced activities) is defined as [foreign-directed]2

This includes attempts by foreign states (or persons / entities operating on their behalf) to covertly influence, intimidate, manipulate, interfere, corrupt, or discredit individuals. These activities are often meant to deceptively influence Government of Canada policies, officials, or democratic processes in support of foreign political agendas. Some examples that CSIS provides of this type of activity includes cultivating influential people, spreading disinformation on social media, and attempts to covertly influence the outcome of elections. These activities are not constrained to a particular level of government: they can target federal, provincial, and municipal governments.

When we think about foreign interference, it can be helpful to ask ourselves two questions: who are the targets of the interference, and what is the goal? So here are three examples of potential foreign interference from 2022 that we can unpack by looking at these goals, targets, and how the activities were conducted.

PRC Police Service Stations

There were a number of different types of foreign interference and influence that were reported last year. One of course was the issue of “police service stations” that were believed to be operating on behalf of the People’s Republic of China (PRC) in the Greater Toronto Area, Vancouver, and elsewhere. According to some news reports, the Chinese police stations have effectively stopped operating due to visits by the RCMP and CSIS, and China’s ambassador to Canada was summed by the Department of Global Affairs over the matter.

These stations appear to have been an attempt by the Chinese Communist Party to exert influence over members of the Chinese diaspora in Canada, possibly in support of some of China’s broader domestic and international objectives. These police stations appear to also support efforts by China to repatriate dissidents living abroad, or “persuasion to return” operations where individuals who committed crimes in China are “persuaded” to go back to China to face criminal proceedings. These stations were established clandestinely (in Canada, they were established covertly, although some reports suggest that the stations were established with the knowledge of the host country, like in Italy), they were directed by a foreign government, and they were detrimental to both the interests of Canada, and might have involved threats to specific persons. According to either the CSIS or RCMP definition, these stations are clear examples of foreign interference in Canada, and might have also strayed into illegal activity, providing opportunities for disruption through criminal processes.

Convoy finance and amplification

Much fuss has been made about the issue of foreign support for the Ottawa convoy and occupation, particularly in terms of amplification of the protesters’ message, and in financing of their activities. As long-time readers of this newsletter will recall, I covered that topic in depth.

Insight Intelligence

Convoy Finance: 25% Foreign Funded, but Questions Still Remain

Last week, the Public Order Emergency Commission treated us to their overview of convoy finance. There’s lots of good stuff in the overview, and a few omissions. I looked at the report with two main questions in mind: how much did the organizers actually have access to, and how much of the money came from foreign sources. There’s plenty more to unpack, but let’s start here. And of course a warm welcome to the new subscribers to Insight Intelligence — our community is growing by the day, and we’re now over 2500 strong…

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4 years ago · 7 likes · 2 comments · Jessica Davis

But let’s look at this activity from the definitions of foreign interference. To start with the RCMP’s definition, while there was clear foreign funding and foreign amplification of the convoy, it wasn’t illegal. And while the convoy might have supported threats to the security of Canada (currently part of the considerations for the Public Order Emergency Commission), the other aspects of the definition do not appear to be met either. From a CSIS definition perspective, the big issue here is that the foreign influence does not appear to have been from a state actor, was not clandestine or deceptive (for the most part), although it was detrimental to the interests of Canada.

In sum, I’d say that the foreign amplification and financing of the convoy did not meet the definitions of foreign interference, although there was some foreign influence (by non-state actors) on the convoy. Countering this type of activity falls outside the scope of foreign interference tools, but we could consider limits on foreign donations political activities in Canada as one possible remedy.

Electoral interference

Finally, there were also some allegations last year that politicians received funds from foreign donors. Indeed, as CSIS noted in their public document on foreign interference from 2021, illicit financing can target political parties and candidates: these funds can be seemingly sent from a Canadian, but the funds might have actually originated with a foreign threat actor. This information seems very similar to activity that was reported on in 2022 by Sam Cooper for Global News, and corroborated (in part) by reporting from the Globe and Mail. Some highlights:

• In Feb 2020, PCO produced a “national security memo” that documented China’s “alleged “subtle but effective foreign interference networks” that targeted the 2019 federal contest”. This was from the PCO IAS’s “Daily foreign intelligence brief” (published 21 Feb 2020), although the source of the intelligence is unknown. A side note on the brief: these are produced daily, and they are broadly available in the intelligence community. This is not a direct memo to the Prime Minister, although senior levels of governments regularly receive the brief, or excerpts from it.

• Cooper also reported that CSIS investigations contain allegations that China’s Toronto consulate covertly funded an interference network that included political staffers and at least 11 election candidates. Cooper says that the consulate made a clandestine transfer of approximately $250,000 to the Toronto-based network. However, subsequent briefings to the Prime Minister said that there was no evidence of Chinese money secretly flowing to the 11 candidates.

• The goals of this network were to recruit Canadian politicians and to obtain advice from political staff on China-related issues, according to Cooper’s reporting on an intelligence document.

So what can we make of this? There have been allegations about the Chinese Communist Party’s attempts to influence Canadian politics and politicians for well over a decade, well-documented in Stephanie Carvin’s book, Stand on Guard. Some of these allegations also relate to potential funding of political parties. Without knowing the source of the intelligence, it’s very difficult to assess the credibility of the reporting about the foreign interference network, although it seems very much in line with what CSIS has already said publicly about foreign interference.

It’s curious that some sources say that the transfer of funds never took place. This shouldn’t be a difficult thing to verify: if funds were transferred, they were almost certainly deposited in Canadian bank accounts. These transactions could be traced by FINTRAC, or if they fell outside of the Centre’s mandate, through warranted access to the accounts in question. In addition, these donations would, based on the limited information we have here, appear to be in contravention of the Canada Elections Act, meaning that if they occurred, there would be a clear bit of evidence for law enforcement to pursue charges.

Based on what we know so far, there’s a foreign interference network in Canada operating at the direction of the Chinese Community Party (or elements therein). These activities are largely clandestine and deceptive, are state-directed, and in some cases might cross the threshold of legality, and were certainly detrimental to the interests of Canada, clearly meeting both RCMP and CSIS definitions of foreign interference.

(On the broader connections that Cooper alleges in his reporting, including links to the United Front Work Department, I’m more skeptical. Not everything is connected all the time, and in China, there are a lot of different actors and interests at play.)

What we can do about it

There are a couple of things Canada can do to combat foreign interference. The first, and the most boring, is enforcing existing laws, such as the Lobbying Act, the Conflict of Interest Act, and the Canada Elections Act.

Other potential activities that can be undertaken is declaring offending diplomats (individuals who might be directing an interference network, or engaging in interference activities directly) “persona non grata”. This effectively strips them of their diplomatic statues and immunities, and requires them to leave the country.3

Canada could also develop a foreign agent registry. This would close some of the gaps in our existing legislation relating to influence activities, such as cultivating an influential person to advance particular ideas, paying influential people to write op-eds, etc. (Under Australian law, this is communication and disbursement, and are the only real gaps in existing Canadian laws that need to be addressed.) By requiring foreign agents to register, if they were to engage in proscribed activity, this would give law enforcement another tool. However, this would have to be developed to cover all levels of government (federal, municipal, and provincial).

Canada is far behind some of its allies in tackling this issue. This is in part because its a politically-sensitive topic, but also because it crosses political boundaries, and affects governments and political activity at the federal, provincial and municipal levels. This means that coordinating a response is critical. But we also have to acknowledge that there are some vested interests at play here, and upsetting the status quo is likely to leave some political actors upset.

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