Defence lawyers in the B.C. Legislature raid case made a bombshell allegation Thursday that Premier Gordon Campbell met with BC Liberal 2001 election campaign co-chair Patrick Kinsella and David McLean, CN Rail's Chair, to discuss the $1 billion B. C. Rail deal before CN was announced the winning bidder.
Reading from a briefing note seized by police search warrant from Pilothouse Public Affairs, lobbyists for CN rival OmniTRAX, lawyer Kevin McCullough talked about problems CN might face with tax implications of the deal.
“This was disclosed face to face with the premier, David McLean and CN’s B.C. political advisor Patrick Kinsella,” McCullough quoted the document.
"The premier never wavered, even from the last election, from his intent to sell B.C. Rail," McCullough read. "Conscious of his tenuous political situation post-Maui [where he was jailed for drunk driving in early January 2003] he assured northern communities the province would retain track ownership."
But, McCullough said, this promise meant CN could not take full advantage of tax credits.
McCullough, reading from other emails and documents disclosed to the defence in the case of three former government aides facing corruption charges, also alleged that Kinsella was working for both CN Rail and B.C. Rail in the period prior to and during the sale of B.C. Rail to CN. Kinsella was paid $297,000 by BC Rail during that time.
McCullough said the B.C. Rail deal almost collapsed months after it was signed November 25, 2003 - leading to a May 19, 2004 intervention by Kinsella to Campbell's Chief of Staff Martyn Brown at McLean’s request.
“On the 19th of May  Kinsella is the point man for CN, he calls Martyn Brown to say they have to do anything they can,” McCullough said.
And McCullogh, representing former ministerial aide Bob Virk, alleged in court that senior government Deputy Minister Chris Trumpy and then-B.C. Rail Vice-President Kevin Mahoney worked together to "stifle" a Freedom Of Information request to access the transaction documents in the B.C. Rail deal.
The B.C. Liberal government is exercising "sub judice" - that the matter is before the courts - to avoid questions when it is convenient but ignores it for its own purposes other times, McCullough also told Justice Elizabeth Bennett.
Special prosecutor Janet Winteringham objected to McCullough’s argument on sub judice but Bennett cut her off, saying: “I’m not sure your role and function here – you’re the special prosecutor."
"There's a reason special prosecutors are appointed," Bennett concluded, no doubt referring to their role as being outside politics in prosecuting cases involving political figures.
B.C. Liberal House Leader Mike De Jong refused in the Legislature this afternoon to answer opposition questions about the revelations.
"The honourable member chooses to make allegations that derive directly from information and material that are squarely before proceedings at the Supreme Court of British Columbia. It is, therefore, inappropriate to answer," De Jong said in response to a question from NDP MLA Mike Farnworth.
The opposition used its entire question period to pepper the government with the allegations raised in court but neither Premier Gordon Campbell nor Attorney General Wally Oppal were present for them, leaving De Jong to take them all.
Outside the court NDP MLA Leonard Krog was scathing about the information disclosed.
"This deal was going off the rails and that the so-called 'consolation prize' becomes much clearer," Krog said, referring to the defence theory that OmniTRAX, the only bidder left in the sale other than CN, was offered a consolation prize of BC Rail's $70 million Roberts Bank Port Subdivision.
That privatization was cancelled in March 2004 when police informed the government the process was tainted.
Krog also said in relation to the main BC Rail deal that: "The premier's right hand, political advisor and old friend Patrick Kinsella is there working both sides of the streets."
Outside court defence lawyer Michael Bolton, representing former ministerial aide David Basi, said Kinsella was a critical link in the privatization of BC Rail.
"What we have indicates that Mr. Kinsella was a very pivotal person in the BC Rail deal," Bolton said. "Material today indicates he was doing work for CN and BC Rail."
McCullough also read emails obtained in disclosure of evidence between BC Rail executives and top government officials.
One email dated July 7, 2004 concerned a column written by Vancouver Sun columnist Vaughn Palmer about possible problems with the BC Rail sale to CN running into problems.
The email was from BC Rail VP Kevin Mahoney to Deputy Minister Chris Trumpy, who was a government appointee to the BC Rail deal Evaluation Committee.
"Mr. Vaughn Palmer of the Vancouver Sun had written an article that contained what appeared to be confidential information - that he wouldn't otherwise know," McCullough said, going on to read the email into the record.
"Subject: Palmer. Mahoney: Where does Palmer get his stuff?"
Trumpy replied 36 minutes later, McCullough said.
"Trumpy: What is your phone number now?"
"Mahoney: The old one whill get you here but the new number is 678-4748."
McCullough suggested that response was designed to make sure the conversation about Palmer's source of information was not in emails that could be later accessed.
"The defence says 2 + 2 = 4," McCullough said. "The article is about whether the BC Rail deal is in trouble."
"One of the issues in this case important to the defence is that one of the allegations is that the accuse were leaking things," McCullough said. "Leaking is how the government controls its political agenda. This isn't an individual rogue act - it's systemic, it's part of the plan."
NOTE - A shorter version of this story will run in Friday's 24 hours newspaper.