BC Rail faced cash crunch, corruption trial told

The corruption trial of three former B.C. government employees resumed on Monday with a former board member describing therailway's bleak financialoutlook that drove the decision to sell it off.

Former ministerial aides Dave Basi and Bobby Virk are accused of accepting bribes in exchange for confidential information linked to the $1-billion sale of BC Rail, while Basi's cousin, Aneal Basi, is charged with money laundering.

On Monday morning in Vancouver, Crown prosecutors called their second witness of the often delayed trial, Brian Kenning, a former BC Rail Board member.

Kenning painted a grim financial picture of the railway in 2001, and said the board had no misgivings about the government selling it.

"Absolutely none. It was paramount we did it," said Kenning, who was also on the provincial government's evaluation committee that was put together to sell the railway.

Because of deregulation in the rail industry and a slowdown in the forest industry, BC Rail might make $20 million a year at best, and that wasn't enough cash for the Crown corporation to repay its $260-million debt as it came due, he told the court.

Before the trial broke for the summer, Liberal Premier Gordon Campbell's chief of staff, Martyn Brown, spent several weeks testifying about what he knew about the controversial sale of the railway.

Meanwhile, one political observer says it's the Liberal government's credibility that is on trial, along with the three government employees.

Political scientist Norman Ruff says the trial will remind voters that Premier Gordon Campbell broke a 2001 election promise not to sell BC Rail, just as the Liberals are already under fire for their surprise move to introduce theharmonized sales taxafter the 2009 election.