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Former British Columbia Premier Bill Vander Zalm in Vancouver, B.C., on Monday September 20, 2010.

Darryl Dyck For The Globe and Mail/darryl dyck The Globe and Mail

Dressed in dark slacks, a neat plaid jacket set off with a gold tie, and flashing his trademark, high-wattage smile, former premier Bill Vander Zalm described in the Supreme Court of British Columbia how his career was brought to an end – and he tried to justify accepting an envelope stuffed with cash from a Taiwanese billionaire.

The payment of $20,000 in $100 U.S. bills has haunted Mr. Vander Zalm ever since 1991, when the transaction was revealed in a report by then acting conflict of interest commissioner Ted Hughes.

The money was given to Mr. Vander Zalm in a Vancouver hotel room by Tan Yu, a businessman who for $16-million was buying Fantasy Gardens, a theme park Mr. Vander Zalm owned with his wife, Lillian Vander Zalm.

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In court on Thursday, Mr. Vander Zalm said the cash was taken only "for safe keeping," and he stressed that it came to him in a plain brown envelope, not a brown paper bag as was widely reported in the media at the time.

"I've had to live with this garbage all these years," he said emphatically, when asked by Mr. Hughes's lawyer, Irwin Nathanson, what difference it made if the money came in an envelope or not.

Mr. Vander Zalm said it was never clear why the cash was given to him for safekeeping, but he suspected it was because Mr. Yu, who was worth an estimated $7-billion when he died in 2001, was making a trip to the U.S. the next day.

Mr. Hughes, whose report forced Mr. Vander Zalm to resign, is suing the former Social Credit premier for statements he made in his 2008, self-published autobiography, Bill Vander Zalm: For the People.

Mr. Hughes alleges he is defamed in the book by being portrayed as someone who crafted his report to gain favour with the NDP, so he could win that party's support and be appointed B.C.'s first conflict of interest commissioner.

Mr. Vander Zalm defended his book, saying he began to feel the process was biased against him when he went for his first meeting with Mr. Hughes. He said the atmosphere in the interview room was unnerving, and "it was a bit of a shocker" to see that Mr. Hughes was flanked by two other lawyers, Joseph Arvay and the late John Finlay, whom he felt were philosophically and politically opposed to him.

"The review was conducted … in a very stark room … we were required to come in one at a time … two lawyers and Mr. Hughes [were there] and they would fire questions [at me]… the whole thing was very strange. Never seen anything like it," Mr. Vander Zalm said.

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He said he began to feel the trio of lawyers had concluded in advance that he was guilty of conflict of interest.

When pressed by Mr. Nathanson, as to why he felt Mr. Arvay and Mr. Finlay were biased against him, Mr. Vander Zalm admitted he knew nothing about their personal views, except that Mr. Arvay was "NDP" and had once represented an abortionist in a trial.

As premier, Mr. Vander Zalm staunchly opposed the provision of abortions through B.C. health-care services.

He said the complaints raised in his book weren't meant as personal attacks on Mr. Hughes, but rather to express his thoughts at the time, which were that the closed-door inquiry was unfair.

"Had that been an open hearing … that [$20,000 payment]would never have become an issue," he said, because he would have been able to explain it fully. "I have been the most open person [in politics] I want things visible. That's how you stay out of trouble."

Asked why he didn't mention the cash exchange in his first interview with Mr. Hughes, Mr. Vander Zalm said it was "because I wasn't asked."

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In his conflict of interest report, Mr. Hughes found that Mr. Vander Zalm acted improperly by negotiating the sale of Fantasy Gardens while at the same time arranging for Mr. Yu to have meetings with the finance minister and to have lunch with the Lieutenant Governor.

Mr. Hughes also concluded that Mr. Vander Zalm's explanation for accepting the $20,000 for safe keeping was not credible.

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