(CanWest News Service circulated the following story by Gerry Bellett on December 12.)
VANCOUVER, B.C. — Lawyers for two men accused of political corruption in relation to the $1-billion sale of BC Rail to Canadian National Railway Co. are demanding the provincial government produce 17 behind-the-scenes documents covering the controversial sale of the railway, which one lawyer described as the “smoking gun.”
Former government aides Dave Basi and Robert Virk are charged with accepting a benefit, fraud and breach of trust in relation to the sale of the railway.
Their lawyers were in B.C. Supreme Court on Tuesday seeking an order from Justice Elizabeth Bennett for production of the documents, which are a combination of legal advice, comments and analysis of the sale made by a law firm hired by the government and BC Rail.
The government is claiming solicitor-client privilege in withholding the documents.
The Crown alleges Mr. Basi and Mr. Virk accepted bribes from a lobbyist representing OmniTRAX, one of the bidders for the freight division of BC Rail, which was sold for $1 billion to the successful bidder, CN Rail.
Mr. Basi and Mr. Virk allegedly leaked confidential government information about the bidding process. The criminal case stems from a police raid in December 2003 on the legislative offices of Basi and Virk. The allegations haven’t been proven in court.
Kevin McCullough, acting for Mr. Virk who was a former assistant to then-transportation minister Judith Reid, said Tuesday the documents will explain Mr. Virk’s role in carrying out the political agenda of the premier’s office and the minister of finance as he was appointed to sit on the evaluation committee that was reviewing bids to buy BC Rail.
“He was placed on the evaluation committee to be the political eyes and ears on behalf of the premier’s office and the minister of finance,” said Mr. McCullough.
Mr. McCullough said Mr. Virk has a right to access the documents to defend himself because he was on the committee.
The documents, he said, would help explain Mr. Virk’s actions in respect to the instructions he received from then-finance minister Gary Collins and the premier’s office, which when put together form the “amalgam of the smoking gun.”
McCullough said the documents would shed light on the part played in the sale by bureaucrat Chris Trumpy who is deputy minister of finance and secretary to the treasury board.
According to Mr. McCullough, Mr. Trumpy was appointed lead negotiator on the sale of BC Rail by Collins but at the time he was also chair of the B.C. Investment Management Corp., which was holding $350 million worth of CN Railway stock.
“The question in my mind was how was the government in a position to appoint someone who was chair of a Crown corporation holding a massive amount of CN stock to the B.C. Rail evaluation team and make him head negotiator dealing with CN Rail?” Mr. McCullough said.
“It’s an obvious conflict and one which my client was very politically aware of. The question was: would the NDP get hold of it?”
Michael Bolton, acting for Mr. Basi, said it would be fundamentally unjust for his client to be deprived of access to the documents as his co-accused Virk clearly had a right to them.
While he was addressing Bennett, Mr. Bolton said he was of the opinion the government at one time contemplated forcing BC Rail into bankruptcy and placing the company into the Credit Company Arrangement Act as a sort of soft landing bankruptcy.
He also said it was apparent CN Rail’s bid was the one favoured by the province over that of U.S. company OmniTRAX but that Basi was expected to encourage OmniTRAX not to drop out in order to keep up the “appearance of a fair and competitive bidding process.”
Mr. Bolton said Mr. Basi’s efforts resulted in OmniTRAX sending in a second bid that was $45 million higher than the original.