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More 'Stonewalling' about $6 Million for Basi and Virk

Auditor general, van Dongen battle lawyers to get to bottom of legal bill payment by BC tax payers.

Bill Tieleman 18 Sep

Bill Tieleman is a regular Tyee contributor who writes a column on B.C. politics every Tuesday in 24 Hours newspaper. E-mail him at [email protected] or visit his blog.

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David Basi (far left) and Bob Virk (far right) after entering guilty pleas in Oct. 2010.

"Stonewalling is a good term to use to describe this situation overall and in this case." -- John van Dongen, BC Conservative MLA

How did two former ministerial aides charged with breach of trust and fraud get their $6 million legal fees paid by the B.C. Liberal government despite pleading guilty in the B.C. Legislature Raid case?

We may never know, despite B.C.'s independent auditor general John Doyle attempting to find out through a B.C. Supreme Court application heard for five days last week.

And the hallmark of the lengthy B.C. Legislature Raid case -- delay -- emerged again, with Doyle's application first put off from June to September and now recessing until early December for final arguments, meaning Chief Justice Robert Bauman is unlikely to make a ruling until 2013.

The issue arises from one of the province's biggest political scandals ever -- with B.C. Liberal government political aides Dave Basi and Bob Virk charged with leaking confidential documents in the $1 billion privatization sale of B.C. Rail in 2003 to lobbyists for a losing bidder in exchange for money and other benefits.

Government employees facing charges can have their legal defence bills covered under a process called indemnification -- but only if they are acquitted.

But Basi and Virk made a sudden surprise guilty plea in Oct. 2010 ending their trial after hearing testimony from just two of an expected 40 witnesses -- including former and current top politicians and staff, possibly even Premier Christy Clark and former premier Gordon Campbell.

Basi and Virk had strongly protested their innocence since the case exploded with an unprecedented police raid on the B.C. Legislature in Dec. 2003 to gather evidence against the two men.

Doyle's efforts to obtain the controversial Basi-Virk legal billings and those of about 100 other government officials whose costs were indemnified since 1999 are being strongly opposed in court, primarily on the basis that solicitor-client privilege blocks his access to the billings of lawyers.

Doyle's legislative authority to conduct an audit and make recommendations to government is also being questioned.

'An incredible effort to avoid accountability'

Outside a courtroom where government is funding up to eight lawyers to argue various sides of the case, John van Dongen, a former B.C. Liberal solicitor general who quit the party in March in part because of Basi-Virk, was "very frustrated."

"There's a fair question whether this issue should be in this courtroom at all and whether it's properly motivated," van Dongen said in an exclusive interview. "There's an incredible effort to avoid accountability and transparency to taxpayers -- there's a problem here."

"Disclosure has been avoided and covered up," said van Dongen, who was given intervener status by Bauman on the grounds that his past position could add information useful to the court.

While van Dongen was a B.C. Liberal cabinet minister and insider for many years, he says he found out about the $6 million payment of legal fees the same day as the public did from then-B.C. attorney-general Mike de Jong, now finance minister.

Veteran lawyer Roger McConchie was retained by van Dongen at his own personal expense to make submissions supporting the auditor-general's application and attend the entire hearing, as did the Abbotsford-South MLA.

Perhaps ironically given the importance of the principles involved, throughout the whole hearing there were always more lawyers in the courtroom than media and observers combined.

In court, McConchie made a powerful argument that denying the auditor-general confidential access to legal billings in indemnification cases was wrong.

"Where the public interest cries out for investigation and audit, the court should be able to permit access to privileged information," McConchie told Bauman.

And McConchie said the "auditor-general plays an extremely important role" in ensuring that government spending is accountable to taxpayers.

"An audit has a sobering effect on conduct," McConchie said. "The salutary deterrent effect is that a possible audit by the auditor-general can have on ministries owes its effect to the possibility of a wide-ranging, unrestricted audit."

Auditor general's plea for access

McConchie's 50-page submission and arguments echoed those of the auditor-general's legal counsel Louis Zivot, who filed a 111-page submission with hundreds of references to case law and legislative authorities to back the application.

"It was intended by the legislation that the Auditor general have full access," Zivot told Bauman. "The legislation could have been drafted to exclude legal expenditures."

"If we have to negotiate with the attorney general as to what we can have and how we can have it, it will impede the auditor general," Zivot said.

"It is absolutely necessary that the Auditor general have access to all these documents," he said. "While a good deal of focus is on Mr. Basi and Mr. Virk... they are only two of the hundreds of recipients of indemnities."

The records that have been given to the auditor general have been severely severed or redacted, effectively rendering many of them useless, Zivot said.

"Some pages are virtually black -- you can't tell who conversations were with -- these are insufficient for auditing accounts," Zivot said. On the lectern in front of Zivot observers could clearly see a document with blacked out pages.

In concluding, Zivot warned that a decision against Doyle would not only negatively impact the B.C. auditor general's powers but those of other provinces as well, who have very similar legislative authority.

"Essentially this is a very important matter for the auditor general of British Columbia but also for other auditor generals," Zivot said. "A finding that the auditor general does not have these powers would have an adverse effect on the [B.C.] auditor general, other auditors general and auditors."

The other side

But strong arguments against the auditor general's application for these files were also heard in court.

While the government has not taken a position for or against Doyle's application, an amicus curiae or "friend of the court" was appointed by the court to oppose the auditor general's application with all relevant arguments to protect solicitor-client privilege.

Not only were lengthy arguments made in an 88-page submission strongly fighting Doyle's position but lawyer Michael Frey [pronounced Fry] previously opposed van Dongen's application for intervenor status, saying the former veteran cabinet minister had nothing to add to the case.

When it came to the auditor general's application, Frey was completely dismissive of its merits.

"The Amicus's first and foremost submission to this court is that, as a matter of statutory interpretation and law, the petitioner [Doyle] has no power to compel the abrogation of solicitor client privilege. His general production power in the [auditor general] act does not authorize the infringement of privilege," Frey wrote.

"Further, the amicus submits the petitioner has also significantly overreached in claiming that the standards justify an interpretation of the act that empowers him to compel abrogation of solicitor client privilege, or an absolute necessity for compelled interference with the privilege on any basis in connection with audit work," he continued.

Frey noted in court that Doyle's office has received partial records of indemnification legal billings that have been redacted -- or blacked out to remove some details -- and could conduct his audit with those.

Justice Bauman intervened to ask for clarification at that point.

"Is your argument that what he [the auditor general] can get through redacted material... ought to be plenty enough?" Bauman asked.

"Yes," Frey quickly responded.

Mysterious Sandra Harper

Basi and Virk are also opposing the auditor general -- at least in part. They have given a partial waiver on access to those documents possessed by government -- but not the files of two lawyers retained to independently review the legal bills of Michael Bolton, lawyer for Basi and Kevin McCullough, lawyer for Virk.

And as always with the B.C. Legislature raid case, efforts to find out what happened invariably uncover yet more mysteries.

One of the lawyers attending the full five-day hearing was Sandra Harper, one of the independent reviewers of Basi and Virk's legal costs.

Harper took the stand briefly to explain her position: that she declined to provide her files to the auditor general when he requested them, saying that while she did not object, Virk did, and so Doyle should seek a court order for her to produce them.

But things took a strange turn in her testimony on Sept. 12.

"I acted as the independent reviewer of counsel for the accused, Mr. Basi and Mr. Virk, until Sept. 2010, when I resigned," she told Bauman.

What? The only independent reviewer of the $6 million in legal fees for the accused for five years quits just weeks before the actual trial starts in Oct. 2010?

Naturally, I wanted to know why, and approached Harper as she left court on a break Friday.

Tieleman: "Bill Tieleman, with 24 hours newspaper and The Tyee, Ms. Harper -- may I ask you one simple question?"

Harper: "No."

Tieleman: "But don't you even want to know the question?"

Harper: "I won't be talking to the media. You may find out the answers through others at the court."

And with that she was gone, leaving the puzzle additionally intriguing.

But wait, there's more.

Harper also publicly opposed van Dongen's application for intervenor status when it was made in May.

"It's so politically motivated and so off topic that I'm very concerned that Mr. van Dongen's real message is not inside court but outside court and there's a very real concern of the application becoming politicized," she said then. "The Basi-Virk matter has been political enough."

That view didn't hold sway with Bauman, who granted van Dongen's request, saying: "I am satisfied that a responsible intervention will be made."

But it's hard for this case to avoid being "political" when the co-accused were both senior B.C. Liberal ministerial assistants who leaked confidential government material not only to lobbyists Erik Bornmann and Brian Kieran -- who were never charged and were slated to become key Crown witnesses -- but also to Bruce Clark, the premier's own brother, who also was never charged with any offence.

So why is Sandra Harper not willing to tell the public why she quit as the reviewer of Basi and Virk’s legal bills?

And why did she openly oppose van Dongen's application for intervenor status?

Hard to know when Harper won't even hear questions, let alone answer them.

But there's no record of Harper making political donations to any party on the Elections BC financial reporting website.

Fog has yet to lift

And so the mysteries continue nearly nine years after the Basi-Virk/B.C. Legislature raid case first exploded into public view.

Since that time the overall costs to the public have topped $18 million, including prosecution and RCMP expenditures as well as Basi and Virk's legal bills.

Overall, it's clear that win or lose, the auditor general's application will not be able to answer the much larger questions of what happened when the government sold the publicly-owned B.C. Rail that it has promised in 2001 to keep.

That's why it's worth continuing to call for a public inquiry, which has been supported by the B.C. New Democrats, the B.C. Conservatives and the B.C. Green Party.

You can add your voice at the Facebook page -- Basi-Virk Public Inquiry.

But until and unless that inquiry takes place, there are too many mysteries and not enough clues.  [Tyee]

Read more: Politics

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