Monday, September 13, 2010

BASI-VIRK: BC Rail Director says $1 billion privatization could be "contaminated" if government info was leaked

David Basi & lawyer Michael Bolton outside BC Supreme Court

Leaks in $1 billion BC Rail sale could “contaminate” the process, BC Supreme Court told in political corruption trial

By Bill Tieleman, 24 hours columnist

A B.C. Rail director explained the damaging results that would have occurred if confidential government documents on the $1 billion privatization of the Crown corporation were leaked to a bidder, as the Basi-Virk trial resumed Monday in B.C. Supreme Court.

Brian Kenning was just the prosecution’s second witness in the long delayed political corruption trial, which was sparked by an unprecedented police raid on the B.C. Legislature on December 28, 2003 – just a month after the sale of B.C. Rail to CN Rail.

The trial comes at an awkward time for Premier Gordon Campbell, following a new Angus Reid poll showing he is the most unpopular provincial leader in Canada with an approval rating of just 12%.

Special Prosecutor Bill Berardino questioned Kenning on what would have happened if a confidential government document on the sale was obtained by a bidder.

“It contaminates the process. It potentially destroys the integrity of the process, B.C. Rail evaluation committee member Kenning replied. “It absolutely shouldn’t be in the hands of any of the bidders.”

Former B.C. Liberal ministerial aides David Basi and Bob Virk are charged with breach of trust and fraud for allegedly providing lobbyists for a bidder with internal government information about B.C. Rail. Former government staffer Aneal Basi faces money laundering charges related to those allegations.

NDP MLA Leonard Krog summed up the political situation Campbell succinctly outside court.

“The last thing the premier needs to hear right now is a train whistle,” Krog said.

Earlier Kenning claimed that B.C. Rail had to be sold because it was losing money and could not pay its debts.

Kenning said a review by the B.C. Rail board of directors after the 2001 election won by the B.C. Liberals - whose campaign promised the Crown corporation would not be sold - determined that it should be sold "as quickly as possible."

Former Social Credit government staffer and political observer Will McMartin has previously called claims that B.C. Rail was "bankrupt" or "debt laden" a lie that has been repeatedly made by the B.C. Liberal government.

"The fact is that BC Rail was a profitable company before the BC Liberals took power. The Crown corporation recorded 23 consecutive years of operating profits and 18 years with net income during the late 1970s, 1980s and 1990s. Indeed, over that period the rail company sent $137.7 million in dividends to the provincial treasury," McMartin wrote in The Tyee online publication on March 29, 2010.

McMartin followed that article with another dissecting the testimony of Campbell's Chief of Staff Martyn Brown that B.C. Rail was in financial trouble earlier in the trial.

Kenning also told the court that in the first round of bidding CP Rail was the top bidder, offering $950 million, while CN Rail was offering between $700 million to $800 million and OmniTrax $710 million.

In the second round CP dropped its bid by $200 million while CN raised it's bid by the same amount. CN ultimately won with a $1 billion bid.

The trial continues Tuesday with cross-examination of Kenning by defence lawyers.


Anonymous said...

Obviously and once again Will McMartin is proven to be full of crap. I heard the comments from the guy who worked at BC Rail on the CBC today. BC Rail was losing money hand over fist. He said they lost tons on passenger traffic and were losing on lumber loads as well. Will McMartin must have though that the Fast Ferries made money as well.

RossK said...



You (and/or more discriminating listeners/readers) may wish to reconsider the passenger rail matter based on the matter of an obscure 'statute' change that came out of the blue and, in my opinion (and I believe that of Mr. McMartin as well), paved the way for a licenssee/longtime Campbell Gov't supporter that came later, after the privatization.


My take on this matter, for those interested, can be found here.


Anonymous said...

anon 7:46 we are beginning to see who really is full of crap here and it has to do with a huge rip off of a railway.

Ian said...

Anon's comments are as hollow as Kennings. How hollow? The evaluation committee didn't believe them, according to notes taken by Yvette Wells (soon to be testifying?)at committee meetings.

If further proof is needed, the evaluation committee provided proponents with revenue estimates in its RFP backgrounder showing growing surpluses.

I've got a short post on Wells' notes here:

Anonymous said...

When does the part of,
"organised crime has crept into every corner of BC" come into play?

Just curious, there seems to have been some side tracking done here?!

Lets back track to what Sgt. Ward said, back in Dec.28th 2003-"O/C,TERRORISM, POLICE CORRUPTION".
does anyone recall these words?

Anonymous said...

What I don't get, is why Campbell lied and said the BC Rail was not for sale, and then sold it anyway. My own brother, worked for the BC Rail, and said the BCR was a good money maker. I guess it was, a good money maker, for Campbell and his friends wallets. How could Campbell, fraudulently sell the BCR, and not know the terms??? The BC Railroad, belonged to the BC citizens. Campbell should have been forced to resign, right then and there. And for sure, when he was a convicted felon, for his DUI.

Anonymous said...

Not until the truth,the whole truth gets revealed will we see an end to the selling off of our province,and then some.

All this trouble to protect the reputation of a shyster.

The Mulroney years will haunt those in office forever and the rest of us will wonder why our beloved mounties couldn't do anything to help!

Anonymous said...

The contaminated process of the billion dollar deal going down as Basi/Virk make up this whole string of events because it makes Basi/Virk look good and the BC Liberals look bad? It just dosen't add up and the long awaited trial which will further bring the premier's popularity to ditto if I got it all figured out right as Campbell takes his party down for the count.
And as the billion dollar privatization deal finally makes it to trail CP Rail profits are looking up, up, up thanks to the sell of BC rail, not to shabby no doubt as its a market that has the bull by the horns as its a game of monopoly with a get out of jail card for free and collect 1billion dollars with a little help from a friendly premier and his coherts who will do what it takes to make ends meet as long as it ends up in CP rails hands.