Making sense of investigations into procurement fraud at AHS

Many investigations will be going on, but the one investigation we need is still being blocked by the United Conservative Party.

Fraud Prevention Month in Alberta

Funny.

While I was looking for the news release from Deputy Minister Chris McPherson that named the Honourable Raymond E. Wyant, former Chief Judge of the Provincial Court of Manitoba as the third-party investigation lead into a narrow scope on the AHS allegations, I did laugh out loud as I passed the entry titled: Fraud Prevention Month: Minister Nally.

“By making this designation official, we are strengthening our efforts to educate and empower Albertans in the fight against fraud,” the quote that can be attributed to Minister of Service Alberta and Red Tape Reduction Dale Nally read.

“Education and awareness help Albertans recognize, reject, and report fraud before it starts.”

Little late for that, but maybe they’ll start with some training sessions for procurement departments, and staffers, staff, and elected officials who allegedly became very involved in procurement practices at AHS, before the procurement duties are moved directly into the Health Ministry, whose staff and elected official were allegedly holding this multi-million dollar scam together.

Wait… the Minister of Health sent a directive to AHS on October 18 to extend the contract for Alberta Surgery Group, whose part owner was already under investigation at AHS for the unmet, but fully paid contract for Turkish children’s medication, at increased rates. The Health Ministry, under that directive, then approved a six-month extension on what had been a 12-month rate of $27,303,859.66, or $13,651,929.50 for six months, for a maximum of $15,848,569.00, or $2,196,639.50 more than the original contracts.

Not sure if “allegedly” applies, but I’ll leave it, just in case.

Someone once told me there are no coincidences in politics, and I’ve yet to find a situation to prove it wrong.

Third-party investigation

After allegedly firing AHS CEO Athana Mentzelopolous in order to put a stop to her internal investigation on January 8, after she apparently did not “wind down” after receiving instruction from Alberta Health’s assistant deputy minister overseeing Acute Care on December 23, and the Auditor General opening an investigation on January 31 after the Health Minister fired the AHS board, and cancelling the third-party audit at some point that Ms. Mentzelopolous had commissioned in November, Premier Smith said she welcomed a third-party investigation.

According to the March 3 release — from former Deputy Minister of Executive Council Chris McPherson, who was shuffled out of that role and into Deputy Minister of Jobs, Economy, and Trade at some point after being tasked with securing the third-party investigation lead — the $500,000 budget for outside resources in Judge Wyant’s investigation will be held by the Ministry of Service Alberta and Red Tape Reduction.

The Government of Alberta contacts for the independent investigator will be the Deputy Minister of Jobs, Economy and Trade (formerly the Deputy Minister of Executive Council) and the Deputy Minister of Service Alberta and Red Tape Reduction.

No conflict there…

In addition to the $31,900 per month remuneration between March 3, 2025 and the report due date, June 30, 2025, and reimbursement of reasonable expenses, of course.

The scope of the investigation, results from which will only be made public if the signatory, Premier Smith, chooses to share them, will look at — but are not limited to — the following:

• were AHS and Alberta Health (AH) decisions consistent with established policies in the context of the government’s expressed policy objectives and the operational and environmental contexts at the time of the procurements?

• did AH and AHS decision makers, individually and collectively, exercise their authority appropriately during the procurement?

• did AH and AHS employees, and/or agents and staff of the companies involved properly disclose or investigate possible conflicts of interests during the procurement processes?

• did any elected official, or member of a minister’s staff, or any member of the Alberta Public Service, or AHS, or other individuals act improperly during the procurement processes in the context of the government’s expressed policy objectives and the operational and environmental contexts at the time of the procurements?

• if inquiries were made of AH and AHS by any elected official or member of a minister’s staff, or by any member of the Alberta Public Service, regarding procurement processes, were such inquiries consistent with the exercise of accountability for implementing the government’s expressed policy objectives?

One reason I’m sure the Premier, her Executive Council, caucus, and Ministerial staff, would like to keep the focus on the initial procurement process is because most of the initial decisions were made when different people were in place.

• October 6, 2022: Danielle Smith becomes Premier

• November 17, 2022 Dr. John Cowell becomes sole administrator of AHS, reports directly to then-Health Minister Jason Copping; Dr. Cowell replaced Dr. Verna Yiu who was fired “without cause” in April 2022, after leading AHS for six years.

• December 6, 2022: Turkish medication deal announced, $42 million deposit on $70 million contract paid

• June 9, 2023: Smith appoints Adriana LaGrange as Health Minister

• July 26, 2023: $28 million paid to MHCare on unfulfilled contract two weeks after AHS orders hospitals to stop using Turkish medication

The outsourcing of surgeries in Alberta has been going on since before the creation of Alberta Health Services in 2008, which puts a little damper on the Premier’s claim that AHS has been “resisting” a practice that was in place before they were, but only if you know it was, I suppose.

You get an investigation, and you get an investigation, etc

This latest investigation brings the tally to six, which Dr. Jared Wesley says are still not comparable to the public inquiry that he argues is necessary to restore public trust.

On Thursday the RCMP, who received a complaint on February 6, the day after allegations of contract and procurement fraud were detailed in The Globe and Mail, announced they will be launching their own investigation.

Some of the allegations from Ms. Mentzelopolous’ statement of claim in her wrongful dismissal suit are criminal, and they aren’t made against “political” actors.

From the allegations in Ms. Mentzelopolous’ claim, it appears that a network of individuals within AHS had likely assisted a local business owner in defrauding Albertans. Ms. Mentzelopolous claims she was trying to figure out to what extent that had happened when political pressure from the Premier’s Office, and Health Ministry began, and which she alleges led to her removal.

The RCMP investigation will focus on the criminal acts, while the third-party investigation looks to exonerate political staff, Ministerial staff, and the Premier as they were simply demanding compliance with “the government’s expressed policy objectives”.

The details of those “expressed policy objectives” will likely come down to quibbles about contract negotiations that happened long before Danielle Smith showed up, and under Dr. Verna Yiu, Premier Jason Kenney, Health Minister Tyler Shandro, and Health Minister Jason Copping, none of whom are still there.

Even the players have been removed, with the Premier moving replacing the DM and ADM of Executive Council, and her chief of staff, and the Health Ministry mixing up their own staff as well.

With that all being said, as much as the Premier would like to maintain focus on the procurement practices themselves, her problems didn’t begin until she was informed there was a problem by her Health Minister, which Smith now says happened in the fall “sometime”.

Every step taken since that moment, has been in an attempt to cover up the wrongdoing.

Something I’m sure the Official Opposition will focus on as the Legislature resumes sitting next week.

Happy Friday!

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