Premier ordered leak, BC Rail trial told

Premier Gordon Campbell instructed a former government aide now accused of corruption to leak confidential reports on the controversial sale of BC Rail, a defence lawyer alleged Wednesday.

Kevin McCullough told B.C. Supreme Court that his client Bobby Virk's refusal to take such action meant his job as a ministerial aide was threatened.

"Mr. Virk declined and rebuffed the premier and told him that he could not leak the reports because he was under a confidentiality agreement?" McCullough asked Martyn Brown, the premier's chief of staff.

Brown called the accusations levelled at both Campbell and himself "ludicrous."

'The conversation you're alleging that happened, I don't remember it at all' B.C. Premier Gordon Campbell's chief of staff Martyn Brown

"I did not do that, and I doubt very much the premier would have had anywhere close to a conversation and he certainly, never in my wildest imagination, would ever counsel such a thing," Brown said.

When McCullough suggested Brown told Virk his job was "on thin ice" for not complying, Brown said he didn't recall such a conversation and added Virk had been doing "a good job" at the time.

The confidential reports, which sought the opinions of railway shippers on which company should buy the BC Rail line, were commissioned by the government, the jury heard.

CP was preferred, says lawyer

McCullough said that according to the documents, the shippers seemed to prefer CP Rail as the new owner, but CN eventually won the bid in November 2003.

"It would be a problem for the government if their own internal reports that they contracted to get showed that CP was the shippers' choice rather than CN?" McCullough asked Brown, who disagreed.

Virk is charged with fraud and breach of trust in relation to the $1-billion sale of the Crown-owned asset.

McCullough spent a fourth day alleging both Brown and the premier carried out several steps around the privatization sale to ensure CN Rail would eventually win the bid because "the fix was in" from Day 1.

McCullough alleged Brown used his slogan "problem-solution-benefit," when asking Virk to leak the documents, saying it was a political strategy to put unfavourable information into the limelight so the government would have control over the response.

McCullough also told the jury that his client tried to warn the premier's office about breaking an election promise not to sell BC Rail, but was ignored.

McCullough suggested Virk was worried about fallout from hiring CIBC World Markets to act as financial adviser during the sell-off of the provincial asset when the government had made an election promise to put all large contracts up for tender.

"Virk came to you and told you that CIBC World Markets was going to get this untendered contract for millions of dollars and that they were a friend, a close donating friend, of the government. He told you that," McCullough put to Brown.

"I don't remember that at all," Brown replied, saying he didn't even know CIBC donated cash to the B.C. Liberals.

"You don't recall him saying, 'Martyn, we're breaking one election promise selling BC Rail, we shouldn't stick another one on top of it?"' McCullough asked.

"The conversation you're alleging that happened, I don't remember it at all," said Brown, who is still Campbell's chief of staff.

The privatization of Crown-owned BC Rail was already controversial because the B.C. Liberals had promised during the 2003 election to keep it in government hands a decision they reversed soon after the election.

Trial almost derailed

The testimony comes after a two-week delay.

The trial was thrown into uncertainty Monday when the judge told jurors that the timetable had jumped from six weeks to more than 10 months. The increase raised the possibility of a mistrial, had not enough jurors been able to change their schedules.

But with all 12 jurors present Wednesday, Brown resumed testimony for a fourth day.

Also accused of fraud and breach of trust in the case are Dave Basi, another former ministerial aide, and his cousin Aneal Basi, a low-level government communications worker at the time who is now charged with money laundering.

The Crown alleges Virk and Dave Basi leaked confidential government documents in relation to the B.C. Rail sale in exchange for cash, trips and meals.

Charges were filed following an unprecedented search warrant served at the provincial legislature in December 2003 that saw RCMP officers carting away dozens of boxes of evidence.

On Wednesday, McCullough also put it to Brown that Virk shared his concerns with then-transportation minister Judith Reid, his employer at the time, and with then-finance minister Gary Collins, Basi's employer. Brown said no.

Brown also said he did not recall Virk warning him of "boondoggle BC Rail severance payments" that were being handed to executives of B.C. Rail.

"Do you not recall him saying to you that this will be the 'cherry on the cake, we've got to do something about it?'" McCullough asked.

"No I certainly don't. It's a colourful term, but notwithstanding I don't remember it," Brown said.