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Defence alleges Liberal insider received $175,000 from BC Rail without invoices

VANCOUVER - The legal defence in the Basi-Virk case alleged in court Thursday that B.C. Liberal Party insider Patrick Kinsella was paid over $175,000 in consulting fees without submitting any invoices for his work.

The allegations were made to justify a request for the release of B.C. Rail documents relating to Kinsella by the defence team for three men charged with corruption.

On Friday morning, British Columbia Supreme Court Justice Elizabeth Bennett ruled that about half of the documents being sought are relevant to the case and ordered them released, according to a report by The Province's Keith Fraser.

The documents include emails describing meetings being set up between Kinsella and B.C. Rail shortly after the 2001 election, in which Kinsella was Gordon Campbell's campaign chair.

David Basi, Bob Virk and Anneal Basi -- all former government aides -- are facing charges that they accepted bribes or laundered money in relation to the sale of B.C. Rail to CN Rail. Their defence claims that the three were just following orders from superiors in a much larger scheme.

In court Thursday, Kevin McCullough, representing Bob Virk, alleged Kinsella played a key role in the $1 billion privatization of B.C. Rail and that he had significant communications with successful bidder CN Rail when the deal got into trouble after the sale was announced.

McCullough blasted the lack of invoices to B.C. Rail from Kinsella and his company the Progressive Group for what he said amounted to more than $175,000 of the $297,000 the former B.C. Liberal Party co-chair in 2001 and 2005 charged the Crown corporation for "business advice."

"The fact that we only have invoices commencing in July 2004 for all the Progressive Group when we know in excess of $175,000 was paid from 2002 to 2004 alone is significant to what Mr. Kinsella was doing for B.C. Rail," McCullough told Bennett in arguing for disclosure of the documents.

But B.C. Rail lawyer Robert Deane said this afternoon that there was “an explanation and it’s not sinister.”

Deane said CN Rail had taken over B.C. Rail documents in July 2004, so they were not in B.C. Rail’s possession.

Deane said an affidavit filed in June of 2009 explained that when the transfer of B.C. Rail to CN was completed in about July 2004, recoreds were transferred to the control of CN.

Outside court Deane declined to answer questions about why B.C. Rail still retained some records related to Kinsella but not others or whether B.C. Rail knows if the invoices exist and are in CN's control.

McCullough discounted Deane's explanation.

"Whether or not those documents existed and whether they were shipped to CN is another matter," he argued.

Also at the Thursday hearing, Kinsella's lawyer James Sullivan had argued that about 108 B.C. Rail records, documents and emails connected to Kinsella should not be disclosed to the defence, saying they were either not relevant to the case or are private and harmful to Kinsella's business.

"Mr. Kinsella is not a government official or a public figure. He's a private citizen who relies upon his good reputation for his business," Sullivan said. "Mr. Kinsella, it must be stressed, is not a party to these proceedings."

Michael Bolton, representing former ministerial aide David Basi, had also alleged that Kinsella played a critical role in the sale of B.C. Rail and that his records are therefore essential to the defence.

"At a political level, he's the man the government couldn't do this deal without," Bolton said of Kinsella's role as a paid consultant at B.C. Rail. "It's a matter of having a key political fixer on the payroll."

And Bolton had little sympathy for Sullivan's arguments to protect Kinsella's privacy.

"Mr. Sullivan argues correctly that his client isn't a public figure - that's true - he's a backroom guy, he's a political figure. It's a power broker role," Bolton said of Kinsella. "There's no doubt Mr. Kinsella would like to remain in the backroom but these documents are critical to the defence."

“Given that B.C. Rail was put on the market in 2002, and the charges come from that event, these documents are likely relevant. Mr. Kinsella does not have a privacy interest on the documents,” Bennett stated in making her ruling on Friday.

The Thursday afternoon session saw some of the testiest arguments yet seen in court in over three years, with McCullough at one point seeming close to being ejected by an obviously angry Justice Elizabeth Bennett.

And Bennett repeatedly ordered Sullivan to sit down and stop interjecting, at one point warning him his actions could potentially result in grounds for an appeal in the case by the defence.

The pre-trial hearing is now adjourned until August 17, when Justice Bennett is expected to rule on whether she will stay on as the trial judge despite her promotion to the Appeal Court of British Columbia.

The court will also hear from provincial government lawyer George Copley whether backup email tapes of cabinet ministers and staff still exist or not after they were sent to EDS Advance Solutions for destruction in early May.

Bill Tieleman is a regular Tyee contributor who writes a column on B.C. politics every Tuesday in Vancouver 24 hours. E-mail him at [email protected] or visit his blog at billtieleman.blogspot.com, where a longer version of this article is posted.

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