In the last year, business magnates of the province decided there was a better place for Kevin Falcon to perch than in offices of a wealthy property developer. When the former Cabinet Minister became leader of the BC Business Party (AKA BC Liberals), I asked Lew Edwardson to remind us of a case of political corruption that occurred when Falcon and associates had places at the provincial Cabinet table.

Years ago, Lew had been outraged by the corrupt sale of BC Rail, but more particularly by the coverup of machinations underlying the sale. He made himself expert on the subject and became an activist, politely asking government officials to remember that protecting the public interest was their duty. Those requests were were either ignored or scoffed at, so Lew addressed numerous members of corporate media, asking them to look beyond self-serving statements of participants and independently report facts about BC Rail and failures of the justice system. Those entreaties were equally unsuccessful.

Led by the accomplished but politically naïve Andrew Wilkinson, BC Liberals were crushed in 2020 by John Horgan, a man who was an opposite of the Opposition leader. That led to BC Liberal influencers deciding an old reliable was needed to regain days when the region’s government was of business, by business, and for business.

Democracy is targeted by rich and powerful groups determined to win at all costs. They are served by loyal agents moving in the halls of power.

To know where we might go, it is important to remember where we’ve been. Lew Edwardson helps us do that. His words follow:

It appears the BC Liberals have gone back to the future. They have reached into the costume closet and pulled out a Falcon with two right wings.

The mini-Gordon Campbell bird that brought us Total Recall, Have You Had Enough Yet?, Pay As You Go, Deregulation and many other insults is back, towing railcars filled with enough target baggage to keep the BCNDP fully supplied until and through the next election campaign.

On one morning in February, I happened to hear a radio interview wherein Kevin Falcon was ranting about principled leadership regarding equal application of the law. His general theme was that government had to respect and apply the law in all cases or society would not respect it. He is right of course but let us just think about his record and what it says about the likelihood he is the answer to straight and narrow governance. Speaking of railcars, here is a harbinger of what Falcon and his cronies will be up to if given one more last chance.

On December 28, 2003, the Royal Canadian Mounted Police raided the British Columbia Provincial Legislative Buildings. The offices searched were used by Udhe (Dave) Singh Basi, ministerial assistant to then-finance minister Gary Collins, and Dave Basi’s brother-in-law Bobby (Bob) Singh Virk, assistant to then-transportation minister Judith Reid.

By direct indictments on January 28, 2005, Basi and Virk were charged by a special prosecutor appointed under the Crown Counsel Act with accepting bribes, influence peddling, breach of trust and fraud related to their dealings with lobbyists for Omnitrax and with Bruce Clark, Deputy Premier Christy Clark’s brother.

Basi was also charged in an October 18, 2010 indictment regarding an information sworn April 3, 2006, with accepting a bribe in connection with purported aid in removing land from the Agricultural Land Reserve (ALR) on behalf of Shambrook Hills Development Corporation.

The two proclaimed their innocence for seven years and racked up over six million dollars in legal fees to defend their case. Then on October 18, 2010, in the Supreme Court of British Columbia, the defendants entered surprise guilty pleas pursuant to a court-accepted plea bargain with the special prosecutor. That afternoon, Basi and Virk were sentenced on reduced charges to two years less a day to be served under house arrest, some community service, and a fine of $75,695 ($50,000 related to ALR charge) for Basi.

In her Oral Reasons for Sentence read to the assemblage, Associate Chief Justice MacKenzie made statements that indicate she and the special prosecutor were kept in the dark regarding material facts, preventing them from fulfilling their lawful duties. I will list the statements in question followed by my comments.

[2]               Their changes of plea are the result of a negotiated agreement between Crown and defence who make a joint submission to the Court; that is, Crown and defence counsel agree on what are fit sentences for these offences.

In fact, their changes of plea were the result of a negotiated plea agreement between defence and the Legal Services Branch under the direction of the Deputy and the Assistant Deputy Attorney General with the knowledge of the Attorney General and Deputy Minister of Finance. That deal involved the direct exchange of liability for $6.4 million in legal fees for guilty pleas. Defence counsel told the Auditor General’s staff they would not have even presented the Crown’s offer of a plea deal to the defendants until and unless they had the secretly negotiated deal in place, and the fact the separate and secret deal was kept from the court and special prosecutor was confirmed by both the Acting Auditor General and the Deputy Attorney General.

[14]           The Crown submits that the joint submission on sentence is in the best interests of the administration of justice because the defendants have come forward and unequivocally accepted responsibility for their transgressions. 

In fact, the defendants most definitely did not come forward and unequivocally accept responsibility. They proclaimed innocence for seven years and fought the case in court for five, acquiring well over $6 million in legal fees to do so. Those fees were legally part of the responsibilities they incurred through their transgressions. They refused to accept those responsibilities.

[25]           The law requires that a sentencing judge accord a considerable degree of deference to a joint submission.  I recognize that the joint submission in this case was the product of lengthy negotiations over a considerable period of time by experienced counsel.

What she did not recognize (because she deliberately was not informed) were the plea negotiations behind the special prosecutor’s back. The special prosecutor was appointed under the Crown Counsel Act to protect the administration of justice from the very sort of interference that transpired, and the judge and special prosecutor (as well as an unsuspecting public) had every right to expect that all plea negotiations would involve the special prosecutor. Instead, a secret plea deal directly exchanging $6.4 million for guilty pleas was engineered with the defendants by the government and hidden from the court by the very government entity mandated to ensure that would not happen.

[29]           I have referred to the relevant principles of sentence in this case. I am satisfied that the fine imposed on Mr. Basi is an appropriate form of punishment. In addition to having a denunciatory effect, it provides a means by which he is required to take responsibility for the consequences of his conduct, and it provides at least a partial means by which his rehabilitation may be measured. The default period, 18 months imprisonment, is substantial.

What do we suppose Associate Chief Justice MacKenzie would have said had she known that as she spoke those words, the defendants and their counsel were looking right back at her with straight faces and the full knowledge that by pleading guilty Mr. Basi was not only going to escape the legal liability he rightfully should have incurred for over $3 million in legal fees (dwarfing her fine), but gain a release whereby the government also agreed not to claim the fine she was imposing on him, no matter what amount? I have no idea (neither the current Attorney General nor Premier will tell me – I have asked) whether Basi ever paid the “fine,” but the terms of the release the government gave him and hid from the court say he did not have to. And how does just giving back the exact same amount he received in bribes amount to a denunciatory effect anyway? He broke even financially and received no greater time sentence than Virk, who was not even involved in the ALR caper. He essentially received no penalty for the offense, while the company that paid him the bribe received a $200,000 fine.

[34]           Joint submissions by experienced counsel are entitled to deference. In the present case, the joint submission neither offends the interests of justice nor is contrary to the administration of justice.

I beg to differ. The court has every right to expect the joint submission to be complete in all material respects. The material fact that there was a secret deal directly linking the waiver of liability for $6.4 million in accumulated legal fees to the guilty pleas, and without which the guilty pleas and joint submission never would have been offered the court, offends justice very much and is definitely contrary to the administration of justice.

In fact, the written offer made in writing by the government for acceptance by the defendants and tying the waiver directly to the guilty pleas was very likely an illegal inducement. Here are former Attorney General Geoff Plant’s thoughts on the matter as expressed in an open letter to former Solicitor General John van Dongen:

“What is clear is that there was no legally binding deal. There couldn’t be. The waiver of recovery of fees was not and could not be an inducement to plead guilty. As a matter of law, they were not connected.”

Well, as a matter of fact they were connected.

The natural course of justice in Canada provides that a defendant in a criminal trial be allowed to plead guilty or not guilty, but that the court may accept a plea of guilty only if it is satisfied that the accused is making the plea voluntarily, free of improper inducement or threat. A guilty plea is involuntary if it is made under hope of advantage held out by someone in authority.

In this case, as confirmed by the Auditor General, government authorities held out a hope of release of liability for over $6 million in legal fees and had the Deputy Finance Minister waiting with pen in hand for the pleas and resulting convictions before using it. They also held out the threat that if the guilty pleas were not entered on the counts and in accordance with the terms specified by the special prosecutor, or if the defendants or Mr. Basi’s wife told anyone about the deal, it was void.

Under section 606 of the Criminal Code the court may accept a plea of guilty only if it is satisfied that the accused is making the plea voluntarily.

Hiding the deal that gave life to the guilty pleas from the judge caused her to make statements she never could have made had it been revealed to her, caused her to consider mitigating factors in sentencing that were obviated by the secret deal, and kept her from exercising her duty under section 606 of the Criminal Code. Hiding that deal perverted the natural course of justice and brought its administration into disrepute.

As if that was not bad enough, the person waiting behind the scenes and watching proceedings with pen in hand to sign the release agreement on behalf of the government as payment for the guilty pleas lacked the requisite authority to do so. But he signed it anyway.

The government would have us believe that because the release was dated October 12, 2010, the Deputy could sign it at any time in the future because no liability had yet been created as of that date. There are at least two problems with that assertion.

First, the terms of the indemnity agreements between the government and the defendants created back in 2005 clearly established the nature of and liability for the legal fees accumulated by the defendants but paid by the government as the trial progressed. Any funds advanced for legal fees (paragraph 8) were deemed a loan (paragraph 9), to become due immediately in the event of a guilty conviction and the exhaustion of the defendants’ right of appeal (paragraph 12). In the event the defendants were acquitted, the government was responsible for the fees (paragraph 13).

Paragraph 15 of the indemnities is worth repeating in its entirety:

As security for money paid or payable under paragraph 8, the Indemnified person must give to the Province, in registrable form, a mortgage over and a security interest in all of his Property, which the Province may register and which shall constitute the Province’s Security in that regard.

The money paid under paragraph 8 in Basi’s regard was well over $3 million as of October 12, 2010 and was established as a loan to the extent a property mortgage was registered as collateral against that obligation. All parties to the deal knew that. The Deputy’s maximum signing authority to forgive loans and obligations was $100K. He did not have authority to sign on that or any other date.

Second, the indemnities were never formally amended as would normally be the case. The government just agreed not to pursue any claim related to their operation. The terms of the indemnities stipulated they continued in effect until the trial concluded and any appeal rights were exhausted. The lawyers still got paid under its terms for instance. So having agreed to give up their right of appeal as of October 12, 2010, the defendants were therefore immediately liable under the terms of the indemnities for $6.4 million in fees upon conviction on October 18, 2010. That is the date the indemnities expired. Any signatory after that date to authorize the government’s release required much more signing authority than possessed by the Deputy Finance Minister.

Think of it this way. Suppose a government bureaucrat wanted to have a $6.4 million structure built, but only had $100K authority. Would it be legal for that person to negotiate a contract to have it erected then wait until it was built to sign the contract, arguing that at the time the contract was negotiated there was no government liability because nothing had yet been built?

Someone wanted very much for that trial to end before politicians, bureaucrats, and their masters and cronies had to take the witness stand. Much of the province had been waiting five years to hear what they would have to say under oath about such things as Canadian Pacific and Burlington Northern Sante Fe railway companies withdrawing from the BC Rail bidding process with claims that the fix was in, and allegations of insiders jockeying in the shade for position at the trough. But the trial was ended prematurely without providing answers, and that raised more questions. Like who ordered the trial to be knocked on its head? And why?

One BC Liberal (and one only) caucus member tried to find out. Four-term MLA and former Solicitor General John van Dongen attempted to have the Deputy Attorney General and Deputy Finance Minister appear before caucus and explain what had happened. In an affidavit dated April 22, 2012 filed in Supreme Court in support of his application for intervener status in the lawsuit launched by the Auditor General to obtain records about the deal, he details his 2010 efforts involving Gordon Campbell, Cabinet, and other caucus members.

That affidavit should be required reading for anyone ever thinking of voting BC Liberal. Mr. van Dongen spent north of $200,000 of his own money, was ostracized by caucus, and ultimately lost his seat over his stance. Think what you will of him on matters of policy, but that showed principled leadership and a concern for the rule of law. Unlike Kevin Falcon, who as a member of Cabinet at the time remained tethered to his perch, feathers unruffled. And now he squawks about respect for the law?

This general disdain for rules or the law from the top matters very much. In addition to fostering a culture that infects mundane things at all levels, such as processing access to information requests or telling the truth in official publications (hello BC Hydro) it can have serious, even deadly consequences.

Falcon had to know much more than the average bird about the BC Rail saga. He took over as Minister of Transportation after Judith Reid was shuffled out after the raid on the Legislature at a time when the transfer to CN was underway, and he had to cancel the troubled bidding process for the Roberts Bank spur line, which critics said was being set up as a consolation prize for Omnitrax. He would know whether there were skeletons waiting to be found if the right closet doors were opened. Is that why he did not go to bat for John van Dongen in his quest for answers?

Whatever his reasons, he missed a chance to show principled respect for the law then, and nothing he has done since gives me confidence he would do it differently today. Had he supported the request it may have impacted the career paths of Attorney General de Jong and Deputy Finance Minister Whitmarsh enough to prevent them from later roles teaming up as Minister and Deputy Minister of Health and their oversight of the shameful witch hunt that resulted in the improper firing of eight health researchers and the suicide of Roderick MacIsaac.

So yes, Mr. Falcon. I have had enough.