Alberta Premier Danielle Smith, right, and Minister of Health Adriana LaGrange during a news conference, in Calgary, on Feb. 19. Smith’s government has faced controversy since AHS’s former chief executive launched multiple investigations into the health authority’s purchasing processes before she was fired.Jeff McIntosh/The Canadian Press
The Alberta government dissolved the board of the provincial health authority the same day the organization was scheduled to receive a report from investigators examining whether some of its business deals were subject to “improper activity,” according to a document obtained by The Globe and Mail.
Further, the Health Minister dismissed the board after some directors forwarded a letter to the Auditor-General alleging that government officials meddled in Alberta Health Services’s operations to the benefit of private companies, according to a separate document obtained by The Globe.
Premier Danielle Smith’s government has been facing controversy since The Globe first reported that AHS’s former chief executive, Athana Mentzelopoulos, launched multiple investigations into the health authority’s purchasing processes before the province fired her Jan. 8.
Ms. Mentzelopoulos has since filed a lawsuit alleging that government officials, including the Premier’s then-chief of staff, leaned on her to sign deals with private companies that she claims were inflated compared with competitors’ contracts.
Alberta Auditor-General Doug Wylie in February confirmed he is examining issues that Ms. Mentzelopoulos identified. In March, the RCMP confirmed it is investigating the allegations and the Premier appointed a retired judge from Manitoba to conduct a review. Peter Guthrie resigned from Ms. Smith’s cabinet over the government’s handling of the file.
AHS, at Ms. Mentzelopoulos’s direction, hired a law firm late last year to review its dealings with MHCare Medical Corp. and companies affiliated with its owner, Sam Mraiche. Ms. Smith’s government, in December, 2022, directed AHS to procure children’s pain relievers to alleviate the shortage in pharmacies.
AHS signed a $70-million deal with MHCare to import 5 million bottles of medicine from Turkey. Only 1.5 million bottles arrived in the province and the Edmonton-based company has been sitting on $49.2-million of Alberta’s money for more than a year, The Globe previously reported.
Mr. Mraiche provided the Premier’s staff and ministers with box seats to Edmonton Oilers’ games, The Globe first reported in July.
Former AHS head alleges Alberta Health Minister created false narrative over her firing
The Globe obtained a document dated Jan. 10 in which Andrea Beckwith-Ferraton, the health authority’s interim general counsel, summarized the status of the third-party investigation for the board. Borden Ladner Gervais (BLG) LLP and PwC Canada were scheduled to update AHS on Jan. 31, the document says.
“The report is expected to address whether AHS’ historical contracting with MH Care Medical [sic] and/or related entities has been the subject of improper activity by one or more former AHS employees,” the document says.
“The report will help inform AHS’ determination of what future steps may be appropriate to manage any existing contracts that AHS may have with MH Medical care [sic] or related entities.”
Gregory Bentz, a lawyer for MHCare and Mr. Mraiche, said his clients have denied any wrongdoing.
Health Minister Adriana LaGrange, at an unrelated press conference with the Premier on Friday, when asked why the government dissolved AHS’s board and whether Alberta would release BLG’s findings responded by saying Alberta submitted a statement of defence regarding Ms. Mentzelopoulos’s $1.7-million lawsuit. “This is all before the courts and you will get more information as time goes on,” she said.
AHS also hired BLG to examine contracts related to chartered surgical facilities (CSFs), including proposals by companies owned in part by Mr. Mraiche. But in December, Alberta Health, the government ministry, took over negotiations and evaluations of the Red Deer and Lethbridge proposals.
The health authority, in turn, asked BLG to stop its investigation into those projects, the document says. BLG had not provided AHS with a draft or final report date regarding its review of the proposed CSFs, the document says, adding that the health authority does not anticipate receiving such reports.
Ms. Mentzelopoulos alleges that she was fired two days before she was scheduled to meet with the Auditor-General to discuss her investigations into various contracts and procurement processes at AHS.
The former executive’s lawyer, Dan Scott, chronicled her allegations in a letter to Ms. Beckwith-Ferraton on Jan. 20, as part of Ms. Mentzelopoulos’s severance negotiations.
Ms. Beckwith-Ferraton responded in a letter dated Jan. 29, indicating that copies of the correspondence had been sent to the provincial Auditor-General and Health Minister Adriana LaGrange.
Ms. LaGrange, in court documents, alleges that the government terminated Ms. Mentzelopoulos as CEO because she failed at her job. None of the allegations have been tested in court.
One of the Premier’s biggest political promises is to reorganize AHS into four separate health organizations, with power shifting to the government. The government previously said Ms. Mentzelopoulos and the board were relieved of their duties as part of the restructuring, arguing that Acute Care Alberta, one of the four new pillars, was scheduled to launch in the spring.
Ms. LaGrange, on Jan. 30, called an emergency meeting of the cabinet committee focused on health, according to Mr. Guthrie, who attended in his capacity as then-infrastructure minister. Ms. Smith and Ms. LaGrange wanted to dismiss the AHS board, he said.
“We were told by Adriana and the Premier that the board was holding up the implementation of acute care,” Mr. Guthrie said in an interview Feb. 25, immediately after he resigned from cabinet because he felt government was not treating Ms. Mentzelopoulos’s allegations with the necessary urgency.
Neither Ms. LaGrange nor Ms. Smith revealed anything about Ms. Mentzelopoulos’s letter or the related investigations at the afternoon meeting, he said.
Mr. Guthrie said he voted against firing the board. He would not disclose how his colleagues voted.
Ms. LaGrange signed a ministerial order dismissing the board, effective the following day, according to a copy of the document obtained by The Globe.
Ms. Beckwith-Ferraton did not acknowledge a request for comment.
Christine Myatt, a spokeswoman for AHS, said her organization will wait for the court process and other investigations to conclude before commenting.