A secret informant told police in 2003 that Dave Basi - one of the central figures in a political corruption trial - was laundering drug money through the Liberal Party, the Supreme Court of British Columbia has heard.
The informant's allegation was raised and immediately rejected as "totally false" by Mr. Basi's lawyer, Michael Bolton, during a defence application seeking disclosure of more than 400 RCMP files.
Lawyers defending Mr. Basi, Bob Virk and Aneal Basi, who are charged with trading in confidential government information surrounding the 2003 sale of BC Rail, are asking to see the RCMP's secret informant files, which are known as "source debriefing notes."
Mr. Bolton, who represents Dave Basi, and Kevin McCullough, the lawyer for Mr. Virk, told court the debriefing notes will show police relied on false information when getting authorizations to wiretap their clients.
Mr. Bolton said the RCMP obtained four wiretap authorizations in Victoria in 2003 while conducting a drug investigation of Jasmohan Singh Bains, who in 2008 was sentenced to nine years for conspiracy to traffic cocaine.
"Mr. Basi was a target in two [of those four wiretaps]... [but]none of the authorizations ever related to any part of the BC Rail investigation," Mr. Bolton said.
Mr. Bolton said the BC Rail investigation flowed from the drug case - but police made the connection based on falsehoods.
"[An informant]said that Mr. Basi was cleaning some of Mr. Bains' drug money. Informant A ... said Mr. Basi was cleaning some of that drug money through the Liberal party ... [and]we believe that is totally false," Mr. Bolton said.
He said the false statements from informants sent police in pursuit of Mr. Basi, which led to wiretaps, and, in December, 2003, an unprecedented raid of the legislature, where Mr. Basi and Mr. Virk worked as ministerial assistants. (The two men were also key political operatives of both the federal and provincial Liberals in B.C.)
"When these informants first surface, and at the point when Mr. Basi is first named as a target, there isn't anything to justify his being named a target other than these three informants," Mr. Bolton said.
The defence application asks Madam Justice Anne MacKenzie to review the source debriefing notes to determine if they are relevant, to see if the Crown can withhold any material on the basis of informant privilege, and to order disclosure subject to appropriate vetting by the court.
Janet Winteringham, a member of the prosecution team, opposed the application, saying the judge is being asked to do exhaustive work the Crown has already done.
She said most of the material cannot be disclosed because it is related to the drug case and is not relevant to BC Rail, or because it could reveal the identity of an informant.
"The Crown is an officer of the court and has constitutional obligations including to vet for relevance and assert informant privilege. Two prosecutors have reviewed [that material]and the defence is now asking the court to do the same," said Ms. Winteringham.
She defended the credibility of the secret informants, saying as part of its review the Crown looked at how the RCMP assessed its sources, "to make sure the police officer had accurately reflected whether or not the informant was thought to be reliable."
Twice during the day, the public gallery was cleared so lawyers could discuss the issue in camera. During one of those closed sessions, defence lawyers were also asked to leave so the judge could hear details about a secret informant.
Judge MacKenzie said she would give a ruling Friday.
Mark Hume