Gabriel Yiu: B.C. Rail sale case is B.C.'s biggest political scandal

By Gabriel Yiu

After the election, the B.C. Liberal government has been facing issue after issue that raise questions about its  integrity.

Whether it's B.C.'s deficit, the economic and unemployment situation, public safety or health-care cuts, the facts are quite different from what Premier Gordon Campbell said during the provincial election campaign.

But a much bigger "political bomb" has just exploded in B.C. Supreme Court.  According to the affidavits of high-ranking officials, the e-mails of the premier, his senior staff, his former deputy premier, finance minister, transportation minister, and solicitor general from 2001 to 2005 were ordered destroyed during the provincial  campaign in May this year.

This is a shocking revelation for it suggests that the B.C.  Liberal government  could have committed obstruction of justice.

In western democratic countries, the courts  are the foundation of our system of justice. Political leaders, be they premier or prime minister, cannot be above the law.  Thus, if the B.C.  Liberal government deliberately violates a court order and obstructs justice, that is indeed a very serious matter.

A local senior lawyer, Russ Chamberlain, told the Province newspaper, "If any individual in government, while there’s an ongoing prosecution, destroys documents that are relevant to the prosecution, that would be obstruction of justice.”

On July 20, Justice Elizabeth Bennett determined that the deleted e-mails of the premier are “likely relevant” to the B.C. Rail sale corruption case and ordered the B.C.  Liberal government to hand over those e-mails  on August 17.

Why were the premier's e-mails ordered to be deleted during the election?

It is not clear whether the provincial government could provide these e-mails, but the following facts are known at this point in time:  

Last month, the lawyer representing the provincial government stated that all the cabinet e-mails between 2001 and 2005 had been destroyed—and these e-mails were only kept for 13 months.

This month, the media revealed the affidavit sworn by Rosemarie Hayes, who is responsible for government e-mails, stated that her department had received an instruction in May to direct the technology company serving the government to destroy the e-mail backups.

It is not clear whether the technology company has destroyed all the e-mails after receiving the instruction, or whether the deleted e-mails  can be restored.  

What is clear is that the B.C.  Liberal government's order to destroy the premier's and his cabinet's e-mails  appears to  violate the government’s own policies.

The Core Policy and Procedures Manual (Section 12.3.3) clearly states that “Government records destruction schedules must be suspended during court orders for Demand of Discovery” and that “Records disposition must be suspended during legally mandated reviews.”

The government’s electronic mail records management policy (Schedule 102903) states that e-mails “required for ongoing legal, fiscal, audit, administrative or operational purposes” must be transferred “to a storage medium suitable for retention for seven years".

The Executive Records Policy (Schedule 102906) requires the premier, cabinet ministers, deputy ministers, and assistant deputy ministers to retain documents that have “legal” or “evidentiary” value.

The executive records policy (Schedule 102906) also requires executive records, including e-mails and voicemails, to be retained for a minimum of 10 years.  

Therefore, it's incomprehensible that the B.C.  Liberal government only keeps e-mails of the premier and his cabinet for a mere 13 months.

It also raises a disturbing question: whether someone high up in the B.C. Liberal government deliberately destroyed these e-mails to hide the truth concerning corruption in the B.C. Rail sale.

Who are the affected  parties?

On December 28, 2003, the RCMP raided and searched the B.C. legislature.   The three key figures in the case are Dave Basi, Bob Virk, and Aneal Basi.  

Dave Basi  and  Virk were ministerial aides to then-finance minister Gary Collins and then-transportation minister Judith Reid. The Crown has alleged that the former aides received benefits from lobbyists in exchange for confidential information about the sale of B.C. Rail.  

Former government communications officer Aneal Basi is accused of money-laundering for his cousin Dave Basi.

Legislature reporters recognized the two key figures as persons wielding enormous influence in the B.C.  Liberal government.  

As the senior aide  to the transportation minister, Virk could attend the most important meetings and obtain strictly classified documents.  

Because Collins was also the house leader, all the government bills and motions passed through Dave  Basi’s hands.  

In addition, Dave Basi  was also the B.C.  Liberals’ prominent organizer in the Indo-Canadian community, meaning that he could influence the results of nominations. Thus, his influence extended to MLAs and  to B.C.  Liberal staffers.  

Since Dave Basi was also an organizer for the federal Liberals, he had close relations with former prime minister Paul Martin’s B.C. representative, Mark Marissen.  Because of that, former deputy premier Christy Clark’s home (her husband Mark Marissen works in his home office) was visited by the RCMP.

There's an intriguing issue: the  Crown is prosecuting the alleged recipients of bribes, but not those who allegedly paid bribes. The “bosses” of the two key alleged figures, Collins and  Reid, as well as  Clark, all left politics afterward.

Campbell and his B.C. Liberal government are also on trial.

Why?  The defence has argued that Basi and Virk were only following instructions from the top ,and there were others in the B.C.  Liberal government who had passed classified information to  a public relations firm.  

The defence has stated in court that the  accused had been instructed by the premier’s office and top B.C. Liberals to conduct some dirty tricks, like hiring people to call radio stations attacking NDP, and harassing protesters.

The defence  maintains that  they can  prove their allegations if  given access to  the e-mails of the premier and his top staff, his former deputy premier, finance minister, transportation minister, and solicitor general between 2002 and 2005.  

A consequent question is that if the defense can prove that Basi and Virk were merely following instruction from the top, isn’t that a much more serious offence?    

Perhaps the e-mails would reveal other dirty laundry on the sale of the B.C. Rail assets  to Campbell’s keen supporter.  

Although we do not know who had twice ordered the destruction of the master and backup copies of e-mails at the very top echelon of the government,  it's  likely  that this wouldn’t have  resulted from the careless negligence of a low-ranking official.

The sale of B.C. Rail is interesting in light of what happened in 1993, when then-Vancouver mayor Gordon Campbell replaced Gordon Wilson as the leader of the B.C. Liberal party.

In 1991, the Wilson-led B.C. Liberal party became the official opposition party. It was quite unusual for him to be replaced two years after a very successful election.

According to media reports, one of Campbell’s staunch helpers was the chair of CN Rail, David McLean.  McLean also raised funds for the B.C.  Liberals’ 1996 election campaign.  

He and companies he has been associated with have also donated tens of thousands of dollars to the B.C. Liberal party.

Even if we overlook the hundreds of millions of dollars’ worth of tax write-off benefits for CN Rail’s purchasing of B.C. Rail assets, the deal was a real bargain when we compare its purchase price with the building costs of other public  railway networks:  

BC Rail—2,315 km of railway networks and 740 kilometres of industrial, yard, and track sidings  throughout the province: $1 billion

Skytrain Millennium Line—16 km.: $1.2 billion

Skytrain Evergreen Line—11 km.: $1.4 billion

Skytrain UBC extension—12 km.: $2.8 billion

Canada Line—19 km.: $1.9 billion

In addition, after the sale, the premier has been actively promoting his “Asia Pacific Gateway” project, elevating Prince Rupert and utilizing the railway network to promote the northern port as North America’s entry point to Asia.  

CN Rail has certainly benefited from the increase in cargo transportation.

A brief chronicle of the sale of B.C. Rail:

In the 1996 B.C. election campaign, Campbell stated in his  party platform that  the B.C. Liberals  would sell B.C. Rail.  

The pledge caused strong opposition in the interior and northern communities.   Campbell was narrowly  defeated in the election.

In the 2001 election, Campbell reversed his position and vowed he would not sell B.C. Rail.  The NDP was defeated.  Shortly after Campbell became premier, he started the process of selling B.C. Rail.

In August 2002, Reid disclosed that the government would sell B.C. Rail.

On November 13, Liberal backbencher MLA Paul Nettleton publicly accused the B.C. Liberal party of having a secret agenda to privatize B.C. Rail.  

One week later, Nettleton was expelled from the B.C.  Liberal caucus and became an independent MLA.

In October 2003, former Social Credit premier Bill Vander Zalm publicly opposed the privatization of B.C. Rail.

In November, one week before the announcement of the bidding outcome, CP Rail withdrew from the bid and stated that a “clear breach” of fairness had occurred when other bidders obtained confidential government information about B.C. Rail.

On November 25, the government announced the outcome of the B.C. Rail bidding, CN Rail’s $1-billion bid won the contest.  Campbell argued that the government didn’t sell B.C. Rail.

December 12, Collins met two executives of OmniTRAX in a Vancouver restaurant.

On December 28, a team of RCMP raided and searched the offices of two ministers; many boxes of materials and computers were seized.  

On January 26, 2004, Campbell shuffled his cabinet. Reid was out, and declared that she wouldn’t run for reelection.

On March 10, 2004, then-transportation minister Kevin Falcon announced the cancellation of the Roberts Bank spur line bidding, because the RCMP disclosed that classified government information had been leaked, and that this undermined the fairness of the bidding. Later, the minister disclosed that the cancellation cost the government $900,000.

On September 16, 2004, Clark announced that in order to take care of her son, she was stepping down from politics and wouldn’t seek reelection.

On December 14 of the same year, Collins announced  he leaving politics. He joined Harmony Airways.

In April 2007, the trial of Dave Basi, Virk and Aneal Basi began in B.C. Supreme Court.

In March 2009, the NDP revealed that, according to the financial statements of B.C. Rail, former B.C. Liberal campaign manager Patrick Kinsella had  received $300,000 from the Crown corporation between 2002 and 2005.

In July 2009, the legal counsel of the government and the director responsible for government e-mail messaging stated in court that the e-mails of the premier and his cabinet prior to 2005 had been destroyed.   Justice Bennett ruled that these emails are "likely relevant" to the case and ordered the government to provide it on August 17.

Gabriel Yiu has run twice as an NDP candidate in provincial elections.



Stephen Rees

Jul 25, 2009 at 4:51pm

"BC Rail – over 3,000 km of railway network covering the continent"

Do you not have anyone there who reads this stuff before it is published? BC Rail has 2, 320 km and covers part of the province of BC. It does not cover the continent.

Charlie Smith

Jul 25, 2009 at 6:06pm

With regard to the comment by Stephen Rees, it has been fixed to read "throughout the province". Gabriel Yiu informed me that the 2001 BC Rail Annual Report stated that the "BC Rail line consists of 2,315 km of mainland and 740 kms. of industrial, yard and track sidings throughout the province."

Casual Observer

Jul 26, 2009 at 3:39am

It's meaningless to compare the sale value of a rail network that has been built over several decades to the capital cost of a new stretch of Skytrain to start with. I know this is one of those big complicated financial whatchamacallits that NDP candidates don't like to think about too hard, but look up 'depreciation' in the dictionary and stop being silly.

Why should a government own and operate a railway anyways? So that we can subsidize it when it starts losing money instead of turning it into a profitable business?

wayne coady

Jul 26, 2009 at 10:37am

I have a question with respect to shares in CN or BC Rail.

In British Columbia there is a company called SHARE .

I would like to know if SHARE or the B.C. Federation of Labour held shares in BC Rail or CN ?

Wayne Coady
Wayne Coady


Jul 26, 2009 at 11:06am

In my opinion The Liberial government has never kept a promace in any of their elections.It doesn't matter if the railway depreiates or not a promiseis a promise,something that the liberal government might look up in the dictionary,silly or not it should not have been sold when promised not to sell it. Im my opinion the Liberial government is only there to fill their own pockets and help their friends,never mind about the poor or seniors.It's all about them and I feel this is crooked.So much for the Liberals I would like to see them gone before B.C. has no resourses of their own left.


Jul 27, 2009 at 12:31am

I recall these events being covered by then-Georgia Strait columnist Bill Tieleman as it broke in 2003. It was covered nominally by CBC Vancouver. There was glancing coverage by the Global TV/Asper monopoly of local print/TV/radio that was downplayed as the meddling by a couple of sketchy government functionaries whose independent actions were caught and immediately punished by unsuspecting bureaucratic managers - nothing to see here! How about an NDP fudge-it budget and let's sell the Coquihalla Highway to fix that accounting audit?

Tieleman and the Strait heroically published the story during both the 2005 and 2009 election campaigns, but got the most tentative nibbles from national media. Why didn't the NDP play this trump card? Why didn't the Green Party make BC Liberal integrity a key issue in their campaign?

This important story might have influenced voters and we might have a very different set of people in the BC Legislature, possibly an NDP/Green majority. Instead, we have corruption, contempt, and public assets used as private party favours.

At the root of this story is the collusion between the BC Liberals, corporate executives and their powerful, partisan, for-profit media monopoly that obliterates any real democratic participation through coordinated information control.

Maybe now, when the people of BC have been rewarded with yet another embarassing, far-reaching, unavoidable political corruption debacle in BC Supreme court, will they ask how these events were made possible. Alas, I think it's a much-too-idealistic hope that we could properly lay blame with our private institutions and wealthy power brokers and expect real, effective change. After all, that would be, like, revolutionary.


Jul 27, 2009 at 9:25am

@ Casual Observer

Physical assets, like train engines and cars depreciate. Train *systems* don't.

I know, it's complicated.


Jul 28, 2009 at 11:02am

people. come on. isn't this the standard way for any politician to behave worldwide? it's all the same everywhere. this is the standard modus operandi for most politicians. that is why voting means nothing and is pointless. the system works the way it works and is supported by those who have a vested interest in keeping the system this way.

Not Stupid-Pants

Aug 11, 2009 at 11:42am

Yeah, right ... gloom, doom, and wringing of hands, no need to think it through to a happier ending because, jeez man, we're all gonna die!

Smarten up, wimps of the world.