Piecing together the AHS scandal

There's a reason it's not easy to pin on the Premier, but I have a solution.

Danielle Smith’s reaction to being asked if she received “kickbacks” from the AHS contract and procurement scandal. It may be the first time she had any indication of how bad this situation actually is for her and her government.

Far too many people have said that the AHS scandal (which definitely alleges fraudulent use of public funds) is difficult to describe. It’s intricate, and there’s a lot of characters in the story, I’ll admit.

However, my guess is that the reason it’s difficult to describe is less to do with how often we have to insert “allegedly” and more to do with the fact that we’re starting in the middle of a story that doesn’t yet have an ending.

There is also a potentially partisan determination to lay it entirely at the feet of Danielle Smith — but that doesn’t quite fit, either.

Danielle Smith is guilty of trying to cover up the wrongdoing. I’d posit that would have been able to see it earlier if she wasn’t completely blinded by her own biases, which renders her a terrible judge of character when they share the same ideological goal.

As Premier, Danielle Smith is responsible for what goes on in her government, under her leadership.

That little factoid is probably why it’s so rare that a self-professed “libertarian” would ever go out of their way to lead a government. They like “personal responsibility” when it suits them, and definitely don’t like to be told they’re responsible for everyone they appoint to positions of power. It very much goes against the grain of the whole sordid fantasy.

Part of the problem with laying everything at Danielle Smith’s feet is that this started before the last election, before she won the UCP leadership, and before she ever thought she had a snowball’s chance in hell of ever managing to get elected again.

Did Danielle Smith make bad decisions? Of course she did. She is easily swayed by people she agrees with, and who in turn agree with her. Many people are like that, especially in echo chambers, but her problem is further compounded by the fact that she is apparently incapable of comprehending that someone she sees as an ideological equal could act in a way that is contradictory to her success.

Hence, her willingness to do everything she can to cover for their misdeeds.

The sticking point

The web may have managed to catch the current government, but it was spun well before they arrived.

Take, for example, Jitendra Prasad, or “J.P.” as he was referred to in Athana Mentzelopolous’ statement of claim.

He was the same AHS procurement lead who had the foresight to order far greater supply of personal protection equipment (PPE) than the Alberta government needed before the pandemic hit Alberta in March of 2020.

Which company did he contract to supply that PPE? Sam Mraiche’s MHCare.

Maybe it was a lucky break. Or maybe they were paying attention to the same things I was; a “mystery virus” in China — as it was known then — reported by Reuters, in late 2019/early 2020. I paid some attention to it over the next few months, before it arrived here. I told my kids on March 11 they could finish out the week, but they weren’t going to school Monday. Kenney announced school closures on Sunday, March 15. If you were paying attention, you knew it was coming.

So, maybe it wasn’t lucky at all.

The next time we heard about MHCare coming to the rescue was December of 2022. As cold/flu/COVID-19 season hit again, the shelves emptied of children’s pain and fever medication. This time, it was Premier Danielle Smith’s chance to be the hero.

She had the inside track on children’s pain and fever medication and it would only cost $70 million for five million bottles. Far more than a province of four million could possibly need, but she could be Canada’s hero, share with other provinces just as Jason Kenney did, and show up the Prime Minister.

Win/win/win.

An initial payment of $42 million was made to MHCare in December of 2022. A shipment of 1.5 million bottles of the medication was delivered in March 2023, months after supply of regular children’s pain medication had been received.

The Premier said that the supply would be sold in pharmacies and used in hospitals. However, because the dosage was different than regular children’s pain medication, supply was held behind the counter, and had to be dispensed with pharmacy instruction, so was available only upon request.

The Turkish pain medication could also be harmful to infants, however, and Alberta Health Services suspended its use altogether within months. (updated to correct a misstatement).

Within two weeks of that order to suspend use, in 2023, someone at AHS then issued Sam Mraiche’s MHCare another $28 million, for which the purchase order referred to three more years of supply, as part of the original $70 million price tag.

A year and a half later, in December of 2024, Premier Smith said the province was working to get value for the money already spent, saying “we have a credit on file with Atabay.” the Turkish supplier.

But that wasn’t true.

I have no idea if Ms. Smith knew it wasn’t true when she said it — she has admitted she’s willing to lie, and her willingness to repeat absolute crap she picks up while chatting with supporters is documented.

Amidst the internal investigation former CEO Athana Mentzelopolous told Minister Adriana LaGrange that she was commencing in September 2024 (33.), Michael Lam, Chief Financial Officer at AHS, sent a letter to MHCare on December 20 in which he said “the company had been holding $49.2 million of government money for ‘well over a year’ and demanded to know whether MHCare was taking steps to additionally import intravenous acetaminophen.”

Health Canada said in a statement to The Globe last week that the agency had not received any proposals from the Alberta government, MHCare or Atabay Pharmaceuticals to import intravenous acetaminophen to the province.

Mr. Lam, in his letter to Ms. Shannon (MHCare’s chief operating officer), gave the company until January 8 to provide “a detailed status update” of its outstanding commitments, in addition to a '“full accounting and reconciliation of the prepayments” the health authority had made.

Globe and Mail, February 20, 2025.

A year and a half ago, the payment for future supply was made to Sam Mraiche’s MHCare and no proposal had been sent to Health Canada since.

AHS CEO Athana Mentzolopolous would find herself fired on the same day as MHCare’s deadline from Mr. Lam.

Back and forth

Another character in this story is Danielle Smith’s former chief of staff, Marshall Smith.

Mr. Smith joined the Alberta government as a “junior staffer” under Premier Jason Kenney in 2019. He came with a cure-all for the ailments of addiction: private recovery centres.

They were private, they focused on recovery, and Marshall Smith — who had enjoyed a promising career before losing the war with addiction and fighting back — had been given the executive director position heading one in British Columbia — what could possibly go wrong?

Mr. Smith’s vision for recovery care centres in Alberta was right up Jason Kenney’s, and Danielle Smith’s, alleys, claiming that the problem was not tainted supply but addiction.

As someone who was shocked to see an “in memoriam” post for someone I knew many years ago who had become a family man with a wife, children, a mortgage, and a steady job who was the unlucky recipient of a bad dose one night after the bar with some of his friends (who did not receive a bad dose) — I will respectfully disagree.

However, ideology is also one hell of a drug.

Mr. Smith worked his way up, through Ministerial assistant roles with Mental Health and Addictions into the Premier’s office, helping the government spend “hundreds of millions” on recovery, while scaling back funding and support for harm reduction.

Danielle Smith has expressed full faith in her aide's approach. As chief of staff, Marshall Smith has overseen political staff in the Alberta government, and has led all social services policy for the premier's office. That includes the division of Alberta Health Services into four separate agencies, including one for mental health and addiction called Recovery Alberta.

CBC News, October 8, 2024

Mr. Smith is also named as a person who allegedly had sustained, and frequent, instances of political interference on Athana Mentzelopolous on behalf of AHS contracts.

Ms. Mentzelopolous claims she had a meeting with Ray Gilmour, Premier Smith’s Deputy Minister on October 4 in which she relayed her concerns about Mr. Smith’s alleged interference with Alberta Surgery Group’s contract, where Mr. Mraiche is a 25 per cent shareholder. Mr. Gilmour allegedly told Ms. Mentzelopolous he “would look into it” (40).

Mr. Smith resigned four days later.

Mr. Gilmour was sent to AIMCo 22 days later.

Mr. Smith landed as Vice President, Western Canada, of Rubicon Strategy Inc.

He later pitched the “Alberta Model” in British Columbia without success.

And more

As Charles Russnell reported in The Tyee last week, MHCare’s Sam Mraiche also got really lucky on a real estate deal.

Mr. Mraiche purchased an Edmonton property for $1.7 million, cash, in May of 2024. Amazingly, the Alberta government’s Ministry of Infrastructure made a $2 million bid for the exact property just three months later, netting the lucky speculator a $300,000 profit in just three months.

Or maybe it wasn’t luck at all.

According to files from the Globe and Mail, Mr. Mraiche’s companies have been the beneficiaries of more than $600 million in contracts from Alberta Health Services.

It’s highly probable that every ministry within the Alberta government is now demanding their department find whether they have also awarded contracts to Mr. Mraiche or any of his known affiliated companies.

One of the reasons Ms. Mentzelopolous’ investigation began is because she was unable to determine the “true ownership” (16.) of Alberta Surgery Group.

That she was allegedly the recipient of political interference on their behalf was likely another red flag.

All that is to say…

The alleged scandal goes beyond the elected officials currently running the Alberta government.

Do I believe the current iteration of the United Conservative Party entangled themselves by their own stupidity? Absolutely.

Do I believe that Danielle Smith interfered with Alberta Health, and on behalf of her own staff in an attempt to cover for her staff’s wrongdoing? One hundred per cent.

Do I believe that if Danielle Smith had an ounce of common sense that her government could have been heroes who reported alleged wrongdoing and marched the perpetrators to justice? Also a resounding yes.

However, Danielle Smith chose a different path.

The RCMP needs to investigate, Albertans deserve a public inquiry, and Danielle Smith needs to exit stage left to Panama where no one in Alberta without FOX media ever hears from her again.

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