Vas Georgiou leaves the Superior Court of Justice Courthouse in Toronto last week. Mr. Georgiou and John Aquino were each convicted of fraud for their actions in the bidding for the redevelopment of St. Michael’s Hospital.Sammy Kogan/The Globe and Mail
Faith in institutions rests on three pillars, each of which must be solidly planted to avoid an erosion of authority that over time can destroy the foundations of public trust.
One of those pillars is the transparency delivered by investigative journalism, uncovering dysfunction or malfeasance within a public institution. A second is the accountability flowing from the legal system, charged with sanctioning those who have abused the trust placed in them by the public. The third, and by far the most critical, is the willingness of the institutions themselves to not only abide by their rules, but to change those rules when it becomes clear they are defective and to ensure that the interests of the public – not office holders – is paramount.
All three need to function properly together, in a delicate balance, for the public interest to be upheld. It’s clear that that balancing act failed in the case of the long-running procurement scandal involving Infrastructure Ontario, St. Michael’s Hospital and Bondfield Construction Co. Ltd.
Vas Georgiou, a former chief administrative officer of St. Michael’s, and John Aquino, Bondfield’s former president, were each convicted of fraud for their actions in the bidding for a massive redevelopment of the health-care facility.
What to know about the hospital redevelopment at the centre of the Bondfield fraud case
Mr. Georgiou, who had previously worked at Infrastructure Ontario, was one of the evaluators of Bondfield’s bid for the project, but was also involved in two businesses owned by Mr. Aquino. During the trial, court heard that the two men communicated secretly during the bidding process.
Bondfield won the work with a $300-million bid, to be completed by 2019. But the company’s finances were strained, forcing it to seek bankruptcy protection. The project, being completed by a different contractor, is not scheduled to be completed until 2026, at a much higher cost of $577-million.
Journalism did its part in delivering transparency that eventually resulted in accountability for Mr. Georgiou and Mr. Aquino. Starting with the mysterious arrival of four brown envelopes a decade ago, Globe and Mail reporters pursued a multi-year investigation into the bidding process for the St. Michael’s redevelopment. The Globe’s stories laid out previously undisclosed ties between Mr. Georgiou and Mr. Aquino.
John Aquino, former president of Bondfield Construction Co. Ltd., arrives at the courthouse.Sammy Kogan/The Globe and Mail
The same day that The Globe made inquiries to St. Michael’s, Mr. Georgiou was placed on administrative leave; he was fired in November, 2015. The Globe’s coverage started a process that resulted in a four-year police investigation and a trial of the two men on fraud charges. Journalism did its duty.
So did the courts. The decision issued last week by Justice Peter Bawden is noteworthy both for its methodical marshalling of facts, and for the exceptional clarity that the judge brings to the question of what constitutes a fraud. Under the law, there must be deprivation – losses or damage to the alleged victims – or the risk of deprivation.
The judge noted there was “at least a chance” that another bidder, PCL, could have successfully negotiated a contract. More broadly, he highlighted the damage to public confidence in a competitive bidding process, and that Mr. Georgiou’s conduct puts St. Michael’s future fundraising at risk. The justice system did its job by holding the two men to account and articulating the corrosive effect of fraud on public trust.
Guilty verdicts in Bondfield hospital case renew scrutiny of Infrastructure Ontario
Such clarity continues to elude Infrastructure Ontario. An internal review in 2016 concluded that the procurement process was “not compromised,” saying there was no evidence that Mr. Georgiou had “attempted to inappropriately influence” decisions. However, The Globe has reported that several key players said they were not contacted.
The report does allow that the former CEO of IO was wrong to tell his organization that Mr. Georgiou had resigned from that agency for personal reasons, shortly before he was hired by St. Michael’s, rather than the truth, that he had been dismissed. But the report is oddly incurious about why the CEO took such a step. Or why Infrastructure Ontario gave Bondfield five contracts worth $840-million.
What processes were in place to mitigate the risk of giving a mid-sized company such a volume of business? What damage has been done to the reputation of Ontario’s bidding process? Who should be accountable for those shortcomings?
If Infrastructure Ontario has tackled these questions, and demanded internal accountability, it has yet to share that information publicly. Journalism has its place, the justice system has its role. But without action from public institutions themselves, the trust on which they depend will crumble.