BC Rail: the scent of a coverup

British Columbia Premier Gordon Campbell has spoken out on the sudden end of the corruption trial of two of his former aides.

British Columbia Premier Gordon Campbell has spoken out on the sudden end of the corruption trial of two of his former aides. Dave Basi and Bob Virk were arrested in late December 2003, after a police raid on the offices of Finance Minister Gary Collins and Transportation Minister Judith Reid. After a seven-year, $6-million legal process, the two switched their pleas to guilty, in exchange for light sentences. Both will serve terms of house arrest.

Campbell exulted, “Two people acted on their own and acted criminally. And I think unfortunately for seven years they’ve claimed innocence, and their lawyers have pretended that they were innocent when they knew they were guilty … They are two criminals who are now paying their price.” Having thus commented on the actions of the courts, Campbell went on to say, “A public inquiry would cost millions of dollars … Justice has run its full course … I’m not going to comment on the actions of the courts.”

What Campbell failed to mention was that BC taxpayers were also paying the price – the whole $6-million price tag for the defence of these two disgraced Liberals. The trial of Basi and Virk, commonly known as the BC Rail trial, was about fraud, influence peddling, and money laundering, connected to the privatization of BC Rail. Campbell had been elected on a promise not to sell the railroad, but later changed his mind. Basi and Virk were caught taking bribes related to that sale.

The deal on the $6 million goes as follows. Because Basi and Virk were government employees when they committed these crimes the government carried their legal expenses during the trial, on the understanding – apparently not uncommon in such cases – that if they were convicted they would have to repay the money. When the two switched their pleas to guilty they not only had the assurance that their sentences would be reduced, they had a written agreement that the government would forgive that debt – in exchange for their silence.

That the BC Liberals would spend whatever it costs of other people’s money to put an end to the Basi-Virk trial comes as no surprise, considering the timing of events. In the upcoming weeks both Collins and Reid were among the witnesses scheduled to testify amid defence allegations that the defendants had acted with the full knowledge of their political masters.

By any standards the sale of BC Rail was a shady affair. It begins with the aforesaid broken political promise – neither a criminal offence nor, sadly, a particularly rare occurrence but nonetheless a bad bit of work. Then, during the period of negotiations, BC Rail paid Patrick Kinsella, head of the Liberal 2001 election campaign, about $300,000 in consulting fees, though he appears to have also been working for the winning bidder, CN Rail, at the same time. In March of 2009, defence lawyers for Basi and Virk alleged in court that, prior to the billion-dollar deal, Campbell met in his office with Kinsella and his client, David McLean, chair of CN Rail.

Not that McLean needed an introduction to the premier’s office, he and Campbell were old pals. In 1993 he lobbied Campbell, then mayor of Vancouver, to run for the premier’s job. He went on to organize the Liberal fundraising campaign for the provincial election. He, his family, and companies he controlled were generous contributors to Campbell’s election run. His handsome salary from CN is paid in part in stock options, so he profited to the tune of millions when that company bought the profitable BC Rail at a fire-sale price.

Oh yes, BC Rail was a profittable Crown corporation, though Campbell claimed, to scant challenge from the media, that the NDP had run it into the ground and that it was $582 million in debt when the Liberals took power. None of this was true. BC Rail had made an operating profit in each of the 22 years prior to Campbell taking office. Again, it’s not against the law for a politician to fabricate facts, but it leads to the question, what else are they making up?

Which brings us back to the deal Campbell’s government made with Basi and Virk. If the BC Liberals have nothing to hide, why are they going to so much trouble to hide it? In return for the $6-million bonanza, both Basi and Virk have been instructed to respond to all questions concerning the deal by parroting the words “I must refer all matters to the attorney general.” The attorney general’s office is refusing to comment on the case.

This whole affair stinks, and it is not the smell of two criminals acting on their own. It is the foul stench of coverup, and it needs to be aired. Campbell is right, a public inquiry would cost the taxpayers millions more on top of those he has already squandered, first by selling off a profitable corporation to his own cronies, and then by buying off the two men who could have shed light on these questionable dealings. He should save BC the expense and simply release all documents and e-mails related to the sale of BC Rail.

But let’s not hold our breath for that. What we can anticipate, quite soon, is the end of Campbell’s days as premier. His popularity is so low it has begun to spark humorous comparisons -“smaller than the pool of Americans who have never heard of Oprah Winfrey,” according to The Tyee’s Steve Burgess. Soon his political days will be over, and he’ll go where political leaders go who have remembered to pay their debts: straight to the welcoming bosom of the million-dollar boardrooms.

Al Pope won the Ma Murray Award for Best Columnist in BC/Yukon in 2010 and 2002. His novel, Bad Latitudes, is available in bookstores.