The B.C. government struck a deal with former political aide Dave Basi five years ago to advance him funds for legal fees, and if necessary recoup that money by forcing the sale of his $857,000 family home.
That deal, undisclosed until now, contradicts claims by B.C. Attorney-General Mike de Jong that the government – as part of a settlement in the long-running political corruption case – agreed to pay $6-million in legal fees because Mr. Basi and his fellow defendant, Bobby Virk, had no ability to pay. “The government won’t pursue what isn’t there,” Mr. de Jong said at the time of the settlement on Monday.
However, the province registered a mortgage on Mr. Basi’s home in 2005 after the government agreed to advance funds for legal fees in exchange for the security on his home. Mr. Basi explicitly states in the mortgage document that he will forfeit his share of ownership in the home if he defaults on payments. The agreement also allows the government to foreclose in the event of default, or to seize half the proceeds of any commercial sale of the home.
His wife Inderjit Kaur Basi “unconditionally guaranteed” that payments on the debt would be made to the province “at the times and in the manner set out.” She assigned her interest in the home as security to back up the guarantee.
Details of the financial arrangement made with the province are in stark contrast to Mr. de Jong’s remarks. The government’s decision to pick up the tab for legal costs will require the province to unravel a legal arrangement that would have yielded a considerable sum of money and waive legal commitments by Mr. Basi and his wife to contribute to the cost of the legal fees.
In a sudden end to the politically charged saga, Mr. Basi and Mr. Virk earlier this week pleaded guilty to breach of trust and accepting bribes in exchange for leaking confidential information during the bidding process in the $1-billion sale of B.C. Rail in 2003. The trial, which had begun earlier this spring, was expected to continue possibly for another eight months.
Mr. Basi and Mr. Virk received a conditional sentence of two years less a day, to be served under house arrest. They each must also do 150 hours of community service. Mr. Basi was ordered to repay all the money he was accused of receiving, a fine of $75,695.
It’s not clear how much money the B.C. government could have obtained through a sale, since there is an older mortgage on the property. The public documents do not specify the size of that mortgage, or whether the government’s claim takes precedence.
Mr. Basi and his wife own a two-storey home with a secondary suite on a cul-de-sac in suburban Victoria, according to B.C.’s Land Titles and Survey Authority. BC Assessment records show the home was assessed this year at $857,000.
The province and Mr. Basi reached their arrangement on funding five years ago. At that time, B.C. Assessment placed the value of the property at $565,000. In other words, the property appreciated in value by nearly $300,000 since the province and Mr. Basi made their deal.
The government registered two mortgages against the property in February, 2006. Mr. Basi agreed that he “is or may become liable to pay certain amounts of money” based on his agreement with the province. He agreed to the government placing a mortgage on his home as a security for his liability, the mortgage document says.
The public documents do not specify either the principal amount of the mortgages or the interest rate. A government lawyer familiar with real-estate law said the dollar figures would be set out in documents that were not publicly available.
The Land Titles documents also show the government registered a claim against any rent that may be collected from the property.
David Loukidelis, the deputy attorney-general, said Wednesday he and the deputy minister of finance were responsible for the decision to pick up the legal costs for Mr. Basi and Mr. Virk. “Neither the special prosecutor nor the Attorney-General had any knowledge of the matter or any involvement,” he said.
“A major consideration was the relatively small amounts that might be recovered from Mr. Basi and Mr. Virk, compared to the millions of additional dollars it would cost the government to continue to fund defence, prosecution and court-related costs through to the completion of the trial, and to fund any appeals, with no guarantee of convictions,” Mr. Loukidelis stated in a news release distributed in response to a request to the ministry for an interview.
Mr. Loukidelis also said that Mr. Basi and Mr. Virk were being released from a non-disclosure condition of their plea bargain that prohibited them from discussing the financial matters.
Mr. de Jong, who did not respond to a request for an interview, phoned a Vancouver radio station to comment on the growing controversy over the plea deal. He said the decision to pick up the tab for the legal fees was made independent of the political arm of government, but he supported it. “I think they made the right call,” Mr. de Jong said.
Without the plea deal, the government would be spending another $2-million to $3-million with “no prospect of recouping that money,” he said.
The scandal erupted with a police raid on the legislature buildings on Dec. 28, 2003. Mr. Basi and Mr. Virk were charged on Dec. 21, 2004.
