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.