DRUG LINK ALLEGED IN BASI CASE

Phone Calls From Suspected Dealer Led To Raid, Prosecutor Says

VANCOUVER -- A former B.C. government aide from Victoria, probed by
police for his involvement in the B.C. Rail sale, appeared to have
links to the illicit drug trade, a prosecutor said yesterday.

Police became aware of Dave Basi when calls were made to his
cellphone from his cousin, Jasmohan Singh Bains of Victoria,
prosecutor Janet Winteringham said in B.C. Supreme Court.

Basi and Bob Virk, also a former government aide, are on trial on
fraud and breach of trust charges. A raid on their offices at the
legislature on Dec. 28, 2003, was part of the police investigation
that led to the charges.

Winteringham said police heard that Bains was head of a
Victoria-based criminal organization that was shipping kilograms of
cocaine to the Toronto area and shipping cash back by Federal
Express. Bains is still facing trial, set for 2008.

The Victoria drug investigation began in May 2002 after the arrest in
the U.S. of Cirilo Lopez, which resulted in "word on the street"
indicating Bains was going to take over Lopez's drug operations,
Winteringham said.

Tips from an informant suggested Basi was laundering money for Bains
by purchasing real estate, Winteringham said.

After a wiretap operation was in place for the drug case, police
overheard Basi discussing B.C. Rail matters.

At the time, Basi was an aide to Gary Collins, then B.C.'s finance
minister. Virk, Basi's brother-in-law, was an aide to Judith Reid,
then B.C.'s transportation minister. The province was in the midst of
trying to sell B.C. Rail.

Prosecutors haven't decided whether to pursue the drug allegations
against Basi.

In the trial, Basi and Virk are accused of accepting bribes in
exchange for confidential government documents concerning the
controversial sale of B.C. Rail.

Basi's cousin, Aneal Basi, who worked as a government media analyst,
is accused of money laundering for allegedly accepting cheques from
Erik Bornmann, then a partner in the lobbying firm Pilothouse, and
transferring funds to Basi.

At the time, Pilothouse was retained by U.S.-based OmniTRAX, one of
the bidders for B.C. Rail.

Winteringham alleged that during a police search of Pilothouse's
office, confidential government documents were found.

The government announced on Nov. 25, 2003, that CN Rail had the
winning $1-billion bid for B.C. Rail. The bidding for the Roberts
Bank spur line was cancelled in March 2004 after police advised that
the process had been compromised.

It was the first time the special prosecutor has been able to respond
to allegations made by defence lawyers during 11 previous days of
legal arguments for more Crown disclosure during a pre-trial application.

The prosecution will spend most of this week countering allegations
made by defence lawyers, who claim they have not received full
disclosure in the case.