Wednesday, December 22, 2004

BC Rail corruption charges raise doubts about whole deal

VICTORIA - The charges alleging corruption in the BC Rail sale are very bad news for the Liberal government.
The talk around the legislature for months has been that there was less to the case than meets the eye. Charges - if there were any - would be petty offences, based on the boastful tendencies of would-be political wheels.
Wrong. The charges are explicit, and raise doubts about the legitimacy not just of the sale of BC Rail's Roberts Bank spur, but of the whole $1-billion deal to sell the Crown corporation.
They are just unproven charges. But they are very serious, taking the case far beyond the Roberts Bank spur or allegations that provincial government staffers tried to trade favours in return for jobs with the Paul Martin Liberals.
Dave Basi - then the top aide to former finance minister Gary Collins - is charged with accepting "money, meals, travel and employment opportunities" to help OmniTRAX in its bid for BC Rail. Bob Virk - ministerial assistant to then transportation minister Judith Reid - is charged with a similar offence, except he is not alleged to have received money along with the other benefits.
Both men are charged with leaking confidential information about the deal.
Most seriously the Crown is alleging Basi and Virk "recklessly put at risk the bidding process " for BC Rail by leaking confidential government documents and other information. Their actions defrauded taxpayers, CN Rail, CP Rail and CIBC World Markets, the financial institution arranging the sale, the prosecutors charge.
This charge isn't about the Roberts Bank spur line sale, a $70-million side deal. It alleges that the whole controversial sale of the Crown corporation was compromised, and taxpayers - among others - lost out as a result.
Transportation Minister Kevin Falcon killed the Roberts Bank deal - at a cost of $1 million to taxpayers - after police warned him it had been compromised.
But Falcon always maintained there were no worries or concerns about the main BC Rail deal. Now you have to decide who was right - the minister or the police and Crown prosecutors who conducted a 15-month investigation.
Look, the government has maintained, the concern was that OmniTRAX had the inside track, and the company didn't even succeed in winning the competition to buy BC Rail. That should show no harm was done.
But no matter who wins, a compromised bidding process - as alleged by the charges - hurts taxpayers and the participants that don't have inside information. If even one participant is moved to reduce its offer because of something it knows, or fears, the whole bidding process goes wrong.
And the Crown is suggesting that is exactly what happened, and that you lost as a result.
The charges even introduced a new player, Aneal Basi, a former Liberal youth wing executive who was hired as a communications staffer in 2002. Aneal, who was introduced in the legislature just before the election by Collins, faces two charges of laundering money accepted by his cousin Dave Basi.
No one has been convicted, and prosecutors often lay a big batch of charges while they figure out which ones might stick.
But this is very bad. (Imagine, for a moment, the Liberals' reaction in opposition to similar charges against NDP political staff.)
The charges leave unanswered questions. If Basi received money, and his cousin laundered it, as the Crown charges, who gave it to him? The charges indicates the payment was in return for assisting OmniTRAX, but don't reveal who put up the money.
The case will move slowly through the courts, and information will gradually emerge.
But meanwhile a huge, controversial and defining deal of the Liberals' first term is under a dark cloud. The Crown says the deal was criminally compromised and the government did not succeed in dealing with the damage.
And while the actions were all by individuals, it is governments that take responsibility.
Footnote: Expect the case to move slowly. All three men appeared before a justice of the peace this week. They'll appear in court at the end of January, with the main order of business likely to be arrangements for the Crown to disclose its evidence to the senior defence lawyers representing each of the three men. A trial is likely more than a year away.


Anonymous said...

Isn't it time for a full public inquiry?

Gazetteer said...

Excellent analysis Mr. Willcocks.

Thought something like this might be coming after we saw evidence of you going straight to the heart of the matter in your follow-up to Mr. Plant during yesterday's scrum (see S. Holman's 'rush transcript).