Dave Basi Photo by Chandra Bodalia


AUDITOR General Russ Jones on Wednesday said that all the 26 special indemnity agreements he reviewed, including the $6.4 million that went to defend former ministerial assistants David (Dave) Basi and Bob Virk, who were convicted on fraud and breach of trust charges in the B.C. Rail case, “were granted legally with no evidence of political interference in the decisions to grant or amend them.”

Special indemnities are agreements under which government pays individuals’ private legal costs for circumstances not covered under their terms and conditions of employment. Between 1996 and 2011, government spent more than $11 million to honour special indemnities approved for just over 100 individuals.

The auditor general’s office found that the public servants approving and administering special indemnities were diligent and their practices were principled. Where indemnities were granted in relation to criminal matters, they were well aware of their professional responsibility to keep the administration of the indemnities separate from the legal proceeding.

The audit identified opportunities to improve administrative and reporting practices, as reflected in the report’s 10 recommendations.

Jones said: “The decision to amend Mr. Basi’s and Mr. Virk’s indemnities was made by public servants, separate from the trial. It was made to avoid the future cost of a lengthy trial.” Due to the questions around the defence costs paid under the  authority of special indemnities for Basi and Virk, the report presents the administration of their special indemnities as a case study, and provides an analysis of the total public cost of the trial.

In addition to paying the private legal costs funded under special indemnities, government is often responsible for funding millions of dollars of defence costs for large criminal trials where the defendants cannot afford their own defence.

Solicitor-client privilege prevents an audit of these public funds unless individuals receiving the legal advice waive the privilege that exists between them and their lawyer.

“One of the report recommendations is for government to obtain a waiver of solicitor-client privilege for audit purposes, as a condition of providing indemnity coverage,” said Jones. “My office could then work with government to improve the management of publicly-funded legal costs.”

The full report is available on the Office of the Auditor General website at:


RESPONDING to the report, Attorney General and Minister of Justice Suzanne Anton said in a statement: “We thank the auditor general for his independent report which will guide our ongoing policy development around regulations for special indemnities. The report will assist government in better cost-management associated with indemnities and more transparency in those costs.

“We value the independent confirmation that high-profile special indemnities did not involve political interference and were legally granted.

“In 2012, we acted on recommendations made in an independent review of our legal fee indemnity policy with new regulations. Those regulations address all nine recommendations made by Stephen Toope in his report to government including the criteria that clearly establish how an employee’s eligibility is determined and how government provides coverage in criminal prosecutions and the circumstances in which employees can be required to reimburse government.”