A former board member of BC Rail admitted under cross-examination in a political corruption trial Tuesday that he made more than $400,000 in fees for sitting on the board -- including more than $30,000 in the six years after the railway was sold and had no trains to run, the Vancouver Sun reports.
But Brian Kenning denied he was personally appointed to the BC Rail board by Premier Gordon Campbell in the summer of 2001.
"Didn't the premier call you and ask you to be on the board?" asked defence lawyer Kevin McCullough, who represents Bob Virk, one of two former senior government aides on trial for fraud, breach of trust, and accepting benefits in exchange for leaking confidential information about the privatization bidding process for BC Rail in 2003.
At the time, the newly elected Campbell had asked McLernon to chair the BC Rail board.
Kenning recalled he met McLernon when they both worked for Marathon Realty in the early 1970s. Campbell also worked at Marathon under McLernon, but after Kenning had left in 1975, the witness said.
"How long have you known Gordon Campbell?" McCullough asked.
"I don't know Gordon Campbell," Kenning replied, adding: "I have met him a number of times at events."
Kenning said he served on a number of boards over the years. The defence lawyer went through a list of the boards Kenning served on and the donations the companies made to the B.C. Liberal party.
Kenning was chairman and CEO of B.C. Pacific Capital Corp. from 1987 through 2003. The company donated about $72,000 to the B.C. Liberals between 1999 and 2004, McCullough suggested.
Kenning said he couldn't remember the exact amounts, but agreed the board signed off on the political donations.
McCullough suggested another company in which Kenning was a managing partner, Brookfield Asset Management, donated about $100,000 to the B.C. Liberals between 1999 and 2005, when Kenning retired from the company.
Kenning was also on the board of Catalyst Paper Corp. in 2006 and 2007, along with former finance minister Gary Collins, when the company made about $46,000 in donations to the B.C. Liberal party.
The lawyer suggested the companies Kenning was involved in donated to the Liberals because "that's how you get favours, right?"
No, Kenning replied, companies give donations to political parties they support.
"They're your friends," McCullough suggested, noting Kenning also made personal donations to the party but never to the opposition NDP.
The witness agreed he never donated to the NDP but denied he was looking for favours from the government.
McCullough pointed out that since the Liberals were elected in 2001, Kenning had made $555,000 in fees for sitting on the boards of BC Rail and BC Ferries.
Kenning denied that the board of BC Rail was influenced by anyone in government when the board recommended to government in 2001 that the publicly owned railway be sold.
He recalled the board was well aware that Campbell had made a campaign promise not to sell BC Rail and the board spent almost a year trying to convince the government that the company should be sold because of dwindling forestry and coal-shipping revenue.
"It was in the province's best interests to sell it sooner rather than later," he said.
Kenning was also appointed to the evaluation committee to assess bids for BC Rail after the government announced in early 2003 that the railway would be privatized.
He confirmed he made up to $89,700 a year in fees for being a board member of BC Rail. He said that included a retainer of $15,000 a year and $1,500 for each meeting.
He agreed with McCullough that he made more than $30,000 in board fees even after the railway was sold, the Crown corporation had no trains to run and few employees were left before it was wound up earlier this year.
The government announced on Nov. 25, 2003, that CN Rail was the winning bidder with a $1-billion offer for a 990-year long-term lease to operate BC Rail.
About two weeks earlier, CP Rail had withdrawn its bid, complaining about a lack of fairness, as it appeared CN Rail would be chosen as the winner.
Kenning recalled one of the accused on trial, Bob Virk, attended evaluation committee meetings on behalf of then-transportation minister Judith Reid.
He said BC Rail launched an investigation in 2003 because the company believed someone inside BC Rail was leaking confidential internal documents about the bidding process. But the source of the leak was never found.
The defendants in the trial include Virk and Dave Basi. At the time of the BC Rail sale, Virk was the senior ministerial aide to the transportation minister and Basi was the senior aide to Collins, who was finance minister.
The third defendant is Basi's cousin, Aneal Basi, who is charged with money laundering for allegedly accepting cheques from a lobbyist representing an American bidder for BC Rail and passing the money to Dave Basi.
The trial, which began in May and resumed this week after a two-month summer break, is expected to continue until spring.
(This item appeared Sept. 15, 2010, in The Vancouver Sun.)
BC Rail shoulda gone with CP is Uke's opinion. Theyda kept it going, and made necessary improvements ta keep services intact throughout the entire company.
It's a really sad story! All that's left of BCOL are a few gons, and boxes, and lotsa lumber racks with the old reporting marks.
Damn CN! And phuk Troll tu!
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Hmm. That address doesnt look right. It looks like the link pointing here was faulty.
