Scarred by a damaging election promise in 1996 to sell BC Rail, Liberal Leader Gordon Campbell changed his mind in time for the 2001 campaign. He vowed unequivocally before his landslide victory that a Liberal government would not privatize the provincially owned railway. Twenty months later, Mr. Campbell flip-flopped again, and the government put BCR's main operations up for sale.
CN Rail emerged as the new owner of BCR in November, 2003, after the province accepted its offer of $1-billion. The months-long bidding process was tarnished when rival CP Rail withdrew at the last moment, charging that the government had stacked the deck in favour of CN. Meanwhile, bids were also sought for a short BC Rail spur line to the coal port at Roberts Bank.
Just weeks after the sale of BC Rail, the RCMP staged a stunning post-Christmas swoop on the legislature offices of then Liberal finance minister Gary Collins and transportation minister Judith Reid. After police carted away computers and piles of boxes in the unprecedented raid, it emerged that the targets were Dave Basi and Bob Virk, ministerial aides to Mr. Collins and Ms. Reid, respectively. BC Rail was at the heart of the police investigation.
Almost a year to the day after the raid, Mr. Basi and Mr. Virk were charged with multiple counts of fraud and breach of trust. Mr. Basi's cousin, Aneal Basi, a government communications officer, was charged with money laundering. The two main defendants were accused of accepting benefits from one of the bidders for the Roberts Bank spur line in return for handing over confidential documents. But defence lawyers implied their clients believed they had implicit approval from their political masters.
It took four and a half years for the highly charged case to come to trial, and the proceedings were plagued with delays. Even so, the preliminary skirmishing over release of government documents, including thousands of e-mails, produced numerous disclosures that did not put Liberal actions in a good light.
With two former cabinet ministers, Mr. Collins and Ms. Reid, along with several once-powerful civil servants on the witness list, expectations had been high of startling new revelations concerning the controversial privatization of BC Rail. NDP critic Leonard Krog had called the long process "death by a thousand cuts" for the governing Liberals. Still unanswered is why BC Rail paid Patrick Kinsella, head of the Liberal 2001 election campaign, more than $300,000 in consulting fees during the time the railway's fate was being determined.
In October, 2010, Mr. Basi and Mr. Virk shocked the public by pleading guilty to a set of amended charges, with two of the original fraud charges dropped. They were both sentenced to two years less a day under house arrest for accepting benefits and breach of trust. Mr. Basi was also ordered to pay a $75,000 fine for accepting benefits. Months after the trial ends, documents obtained by The Globe and Mail show that an extensive police investigation into the BC Rail deal found no evidence of wrongdoing by any elected officials in the BC Liberal party.