News

The Big 'Railgate' Question Looming Still

For a second election, we still don't know: Was BC Rail deal tainted by 'consolation prize' offer?

By Bill Tieleman, 11 May 2009, TheTyee.ca

BCOfficeRaid

Raid on legislature, December 28, 2003. No trial yet.

Mystery magnifies danger, as a fog the sun. --Charles Caleb Colton, 1780-1832

There are many mysteries yet to be solved in the B.C. legislature raid case, even nearly six years after it happened and following disclosure of more than 300,000 pages of evidence to the defence.

And whatever the results of the May 12 provincial election, there is also much danger for Premier Gordon Campbell and his BC Liberal Party if and when the mysteries are unravelled.

That may happen soon, because while the corruption charges against former B.C. government ministerial aides David Basi and Bob Virk have yet to be heard despite years of legal procedures, the Supreme Court of B.C. is gearing up for a long and fascinating trial that could begin very soon.

Basi and Virk stand accused of leaking confidential government documents critical to the $1 billion privatization of BC Rail to CN Rail in 2003 to lobbyists acting for another bidder, OmniTRAX.

Lobbyists Erik Bornmann and Brian Kieran are alleged in police documents to have provided benefits and money to Basi and Virk, who were intimately involved in the sale through their roles respectively as aides to then-finance minister Gary Collins and then-transportation minister Judith Reid.

Government communications aide Aneal Basi, David's cousin, also faces charges of money laundering connected to the case.

Dodging bullets through two elections

The Campbell Liberals have amazingly dodged the bullet through not one but two provincial elections -- 2005 and 2009 -- as special prosecutors, defence lawyers, other legal counsel for the province, BC Rail, the federal RCMP and still other parties parade through the courtroom of Justice Elizabeth Bennett with more reasons for delay than rainy days in Vancouver.

But one way or another, the denouement cannot be delayed much further.

But of all the mysteries, one alone could lead to the acquittal of Basi, Virk and Basi and explain one of the biggest, longest and most frustrating political scandals the province has ever seen -- the "Consolation Prize" -- what may be the Maltese Falcon of the case -- either incredibly valuable or simply a hoax.

The consolation prize?

The defence's key argument in attempting to exonerate Basi and Virk is that they were only following orders to keep OmniTRAX in the bidding for BC Rail -- orders that included giving lobbyist Erik Bornmann inside information about the process.

What is the B.C. legislature raid case?

Also known as "Basi-Virk," it stems from an unprecedented search of the B.C. legislature on Dec. 28, 2003, that police at the time ominously linked to drug dealing, organized crime and corruption said to extend to the highest levels of government.

Subsequently it became clear the search was in fact connected to the $1 billion privatization of BC Rail by BC Liberal Premier Gordon Campbell.

Two former ministerial aides -- David Basi and Bob Virk -- now face charges of breach of trust and fraud for allegedly passing confidential government documents on to lobbyists representing OmniTRAX, one of the corporations that bid for BC Rail. Aneal Basi, a former government communications aide and cousin to David Basi, faces money laundering charges.

The case has exposed the extensive political connections between the B.C. and federal Liberal parties, provincial lobbyists, the leadership campaign of former Liberal prime minister Paul Martin and even the RCMP.

The B.C. legislature raid case is currently in the pre-trial defence application stage at B.C. Supreme Court. The trial itself is expected to last six months or more and call dozens of witnesses, including powerful former B.C. Liberal cabinet ministers, political staff, lobbyists and many others.

-- Bill Tieleman

The bidding was seriously tainted -- Canadian Pacific dropped out publicly days before the announcement CN Rail had won the contest in November 2003, saying the process was unfair.

It has subsequently been discovered, in part through documents recently obtained by the New Democratic Party opposition through a court order, that Burlington Northern Santa Fe Railway -- which was partnering with OmniTRAX in its bid -- also dropped out privately before the process was completed.

BNSF said it was "extremely dismayed with the handling of the BC Rail Transaction.... because of the lack of fairness in which the process has been conducted."

And newly released documents also show that Canadian Pacific Railroad wrote in a letter to Ken Dobell, Premier Gordon Campbell's senior deputy minister, that the "actual value of the bids" in the $1 billion privatization of BC Rail in 2003 was known by winning bidder Canadian National and others before the B.C. government made its decision.

So, the defence alleges, the only way to keep the last bidder in the process and maintain a facade of a real competition was to promise OmniTRAX a "consolation prize" it would receive for cooperating with the government.

That consolation prize allegedly was the Roberts Bank Port Subdivision rail line, a spur line owned by BC Rail and worth up to $70 million.

Defence theory: just following orders

Lawyers Michael Bolton for David Basi and Kevin McCullough for Bob Virk have repeatedly argued in court that their clients' political superiors ordered the consolation prize be given to OmniTRAX.

The RCMP told B.C. Liberal Transportation Minister Kevin Falcon that the separate privatization process for the port subdivision had to be cancelled because it had been compromised by leaks of confidential government information.

And in police search warrant InformationTo Obtain documents sworn by RCMP Corporal Andrew Cowan, the residence of Bruce Clark -- then a federal BC Liberal executive and brother to then-B.C. Liberal cabinet minister Christy Clark -- was searched because:

"I believe that Clark received documents pertaining to a Request for Proposal and presentations regarding Roberts Bank. I believe that Clark has had meetings with Basi. I believe the items sought will be found at..." then giving Bruce Clark's Vancouver home address, the ITO concludes.

As always, it must be strongly cautioned that the ITO contains unproven allegations that have never been tested in court and that Bruce Clark faces no charges in the matter.

So, was the Roberts Bank Port Subdivision rail line a "consolation prize" for OmniTRAX?

So far there is no "smoking gun" that incontrovertibly proves the defence theory correct, although there is considerable evidence that points in the direction of a viable hypothesis.

But one piece of information contained in the NDP release of 8,000 pages of information previously obtained by defence lawyers through freedom-of-information requests has not been discussed anywhere so far except by blogger Laila Yuile, and posted online by the NDP.

Handwritten notes tell a tale

Yvette Wells was executive director of the Crown Agencies Secretariat, closely involved in the sale of BC Rail, working with cabinet ministers, senior government officials and others.

Wells' hand-written notes were obtained by the NDP and defence and are now public record.

On October 22, 2003, Wells attends a meeting with others and records the initials of those present in her notes as "KM/BS/CT/YW".

It appears to indicate that the other participants may have been: Chris Trumpy, the deputy minister most involved in the sale, Kevin Mahoney, BC Rail's then-vice-president and an unknown individual -- "Bob S," who was apparently in the Transportation Ministry.

Wells' notes include a reference to "CIBC" -- CIBC World Markets was the agency hired by the province to deal with financial aspects of the BC Rail sale.

Here's what Wells recorded in her own handwriting:

- "why didn't we disclose all bids to everyone?

- why parts of one and not others?.......

- dilemma:

- don't want to mislead other bidders

- don't want to tell them CN are getting other info -- don't want them to do work, spend $.

- don't want them to drop out b/c if can't resolve issues - we may go back to other bidders.

- CN got data from CIBC that they shouldn't.

- Bob S. contact on issue"

Wells' notes, the defence will no doubt argue, explain why a "consolation prize" was desperately needed to keep OmniTRAX in the bidding and preserve the view that it was "competitive" right through to the final decision.

But it will take sworn testimony in front of Justice Bennett and the tabling of other evidence uncovered by the defence but not yet made public before we will know if the most expensive consolation prize in B.C. history will also prove to be the ticket to acquittal for David Basi, Bob Virk and Aneal Basi.

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15  Comments:

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  • morechatter

    3 years ago

    Its all a Crime around here

    And its sad because despite all that has happened in BC with the Liberals in power and all the talk that goes no where and says little.
    And at least when discriminating against passengers it was the back of the bus for you in Vancouver its off the bus. And as yesterday women pleads with bus driver as she is sickly and bleeding? Do you think she got a ride? Think again not in this town. And we don't need any railgate for that just look at the officers busily driving behind buses so they can give out tickets instead of protecting the station.
    Because you can't do both.

  • morechatter

    3 years ago

  • Grumpy

    3 years ago

    Imagine........

    Campbell wins the election, only to be convicted later over BC Railgate. Sorta winning the battle but losing the war.

  • NRF

    3 years ago

    The trial will never be

    I wish I could share Tieleman's apparent confidence that the trial will unfold and provide answers to questions. More likely, IMO, the Special Prosecutor will lose the SCOC appeal about the secret witness and announce that, sadly, charges must be stayed or the administration of justice will damaged.

    The BC Liberals hope this goes away and they have the managing hand.

  • Dan the socialist

    3 years ago

    What amazes me is how many

    What amazes me is how many people I talk to do not know anything about this and the few that do, really do not care. But yet those same people will bring up Glen Clark...I blame it on the very bias media we have in BC.

  • peasant43

    3 years ago

    Bleak House

    Jarndyce and Jarndyce drones on...

  • Grumpy

    3 years ago

    Don't be amazed Dan..................

    .............. that is exactly what the Liberal controlled mainstream media wants! In BC, one gets all the news one can buy!

  • Jeffrey J.

    3 years ago

    First Rate Journalism

    Without the tenacity and courage of Mr. Tieleman and the Tyee, this explosive scandal would have been buried long ago. As soon as Mr. Basi and Virk faced charges, it appeared immediately that they indeed, were "just following orders". If instead they were rogue agents, the evidence would be vastly different. Indeed, there appears to be NO evidence that they were acting on their own, and nor does the 'Crown' argue such.

    One of the most disturbing trends is the growing conflict of interest that appears when the Crown and RCMP avoid digging deeper into the evidence and seeking those more responsible for the scandal. That will have long term impacts on the impartiality of BC's justice system. Excellent coverage!

  • billy

    3 years ago

    Gordo still in jeopardy

    If the Liberals win, God forbid, Gord is still in big trouble, and I predict he will not fulfill his third term. If the trial dies (likely) within a couple of months of the election, the opportunity then arises for far more revelations through FOI. It will be sufficient gist to keep Tieleman, Holman et al occupied for many a year.

  • DPL

    3 years ago

    I refuse to forget the

    I refuse to forget the pictures of all those police seargents hauling boxes out of my Legislature building. Third world countries maybe, but in BC? It is shameful that such a thing had to happen, and as shameful, the way the present government stonewalled the investigation leading up to this long awaited trial. And all because the guy in the premiers office did a flip flp on another election pledge, and sold our railway which was making money, and he sold it cheap. My God, a bridge he is ramming through construction will cost three times as much as they made by destroying a BC asset. Who is skimming some dollars on this deal? Even some journalists are talking about doing a mini series on this long drawn out theft of BC assests. And some people actually want to re-elect this mob? The mind boggles.

  • Skywalker

    3 years ago

    DPL

    It is almost as bad as the nightly news camera shot into the kitchen window of Glen Clark's house.

  • dorothy

    3 years ago

    Use it or lose it

    "I blame it on the very bias media we have in BC."

    You cannot hold the media solely accountable for people's failure to discard the bunch of losers who run this province.

    First of all, media work to make money through advertising. They sell soap, as father Asper once put it. They are therefore looking for ratings, readership, exposure of their stuff, and people won't read anything that does not fit with their own paradigm.

    A teflon image of the BC Liberals is what people want, therefore the media provide it. The reason why people want it is what should interest us.

    The problem with people is that most of us are ruled by fear. Fear of death, fear of illness, of poverty, of being insignificant or in any way at the bottom of the heap. The Liberals supply us with a solid bank of scapegoats we can feel better than; they even help us justify our fear and hatred of the underdogs, by somehow implying that these are out to steal our hard-earned tax dollars and living it up at our expense. The Liberals are expert at blaming the victim, but at the same time, they are very careful to never have so many victims that they could form a coherent, unidirected majority. One horrifying example of this happening, and its consequences, is the Khmer Rouge with its killing fields. We are not talking silly games here. This is a dangerous balancing act, and to eliminate the concept of nobodies altogether would be a far more worthy and hopeful goal, but it takes a lot of things this province has been devoid of for years.

    We tread the tired old tracks of ‘them and us’, and the reason the Liberals keep getting re-elected is that they have become very, very good at playing us against each other, and we’re falling for it.

    Maybe we should adopt an idea from some of our citizens, those who subscribe to Sikhism, and set as our goal to turn a nation of jackasses into one of lions. Look at this link:

    http://www.sikhs.org/art5.htm

    and search for ‘jackass’, and you will know what I mean.

    Fortunately, we will not (yet) have to offer our heads in a fight to preserve our freedoms and rights. All we need do is USE our heads.

  • buccaneer bay

    3 years ago

    It`s called the big momentum....

    NDP 38 seats---libs 40 seats--7 too close too call........

    The latest from elections predictor.....

    http://www.electionprediction.org/2009_bc/index.php

    Cheers-Eyes Wide Open

  • freebear

    3 years ago

    Railgate?

    Is that near Skidegate?

  • Fish-counter

    3 years ago

    So many scandals...

    This is off topic, but so what?

    The last NDP government immortalised itself over the Fast Cat Fiasco. This government has done even better. Not only were they in power when the Queen of the North sank, but they were also in power when BC Ferries bought three new ferries that are too large by half. They are SO big that they are losing money hand over fist. Railgate or Ferrygate, they just got voted in again.

    The lesson from this would appear to be that you can drive drunk and fast in BC, in fact if you are a Liberal MLA, it is a job requirement. All you have to do is talk like a fairground carney and all is forgiven in the name of business-as-usual. BC politics is as queer as a fish.

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