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Auditor-General seeks records on Basi-Virk corruption trial and defence

Bob Virk (L) and Dave Basi (R) walk out of Vancouver's BC Supreme court May 17. 2010 during a lunch break.

John Lehmann/ The Globe and Mail/John Lehmann/ The Globe and Mail

The Auditor-General of British Columbia, is seeking "any and all records" held by the government, by Dave Basi and by Bob Virk, related to the BC Rail political corruption trial and a $6-million indemnity that covered defence costs.

John Doyle's office has filed a petition with the Supreme Court of B.C., seeking the material, which he says he needs to do his job as the watchdog of government spending.

Richard Butler, a lawyer employed by the provincial legal services branch, is named as a respondent in the petition, along with Mr. Basi and Mr. Virk, two former ministerial assistants convicted of fraud and breach of trust.

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The petition states that Mr. Butler handled the process in which Mr. Basi and Mr. Virk were given an indemnity that covered their legal fees, which were paid by the government when the two men entered guilty pleas last October.

The pleas, which came shortly after the start of the trial and after several years of pre-trial hearings, brought a sudden end to the case, which had promised to expose the inner workings of the B.C. government concerning the $1-billion sale of BC Rail in 2003.

The deal led to a public outcry and demands for an inquiry, which were rejected by the government.

But Mr. Doyle now says he needs the details of the indemnity to complete an audit.

"The Office of the Auditor-General is aware … that there is or was an indemnity relationship between the government and the respondents Basi and Virk with respect to the payment by the government of their legal fees relating to the defence of the criminal proceedings," states the petition.

"For the purposes of the financial audit and the performance audit, the Auditor-General seeks to examine the approvals, expenditures, records and documents supporting the expenditures made pursuant to the Basi/Virk indemnities. … Further, the Auditor-General … requires all records and information concerning the terms and conditions of any transfer, advance of money, loans, or guarantees relating to the Basi/Virk indemnities and the provision of public funds to … Basi and Virk," it states.

The petition says an attempt to get the documentation from Mr. Butler failed, and that neither Mr. Basi nor Mr. Virk responded to a request that they waive confidentiality and solicitor-client privilege.

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The two accused, who are serving terms of two years less a day under house arrest, did not return calls on Wednesday.

The petition states that Mr. Butler said the government was prepared "to waive any solicitor-client privilege of the Crown surrounding the requested information," but he could not provide the material because all transactions with Mr. Basi and Mr. Virk were covered by a confidentiality agreement.

The Auditor-General states in the petition, however, that "an agreement to provide confidentiality" to a third party does not override the authority of his office.

Leonard Krog, Attorney-General critic for the NDP, said the legal challenge offers the public a chance to get a glimpse inside the controversial case, which ended before any substantial evidence had been presented in court.

"This may be the one tiny crack in the facade of the cover up of BC Rail," Mr. Krog said. "We may finally now get a peek inside and see what happened in this case."

When Mr. Basi and Mr. Virk pleaded guilty, the government agreed to pick up their legal fees, apparently without attempting to recover any money from them.

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"I want to understand who made this deal, why it was made, and why the government wrote off the possibility of collecting hundreds of thousands [of dollars]from Mr. Basi [through claims on his home]" Mr. Krog said.

He said the case has been surrounded by secrecy for too long.

"From the public's perspective, it is an outrageous outcome," he said of the indemnity deal. "We spent $6-million to defend two criminals and the public isn't allowed to know how it all went down."

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