‘Bush League’: Smith’s Internal Review for AHS Mess Slammed

Alberta Premier Danielle Smith’s directives in response to allegations of massive alleged corruption within the province’s health-care procurement system fall far short of what is needed to ensure transparency and accountability, experts say.

Last week, the Globe and Mail reported that former Alberta Health Services CEO Athana Mentzelopoulos had been fired just two days before she was to meet with the province’s auditor general to discuss an internal investigation she had conducted into procurement practices at AHS.

In a letter obtained by the Globe, Mentzelopoulos alleges AHS was politically pressured to overpay companies for for-profit services, including surgeries in a private surgical facility. On Tuesday, the Globe reported Health Minister Adriana LaGrange stripped AHS of its authority to directly negotiate contracts with private surgical facilities.

Most damning was the bombshell allegation that one medical supply company, MHCare Medical, received more than $600 million in government contracts. The company is owned by Sam Mraiche, the millionaire Edmonton businessman who showered the premier, her chief of staff Marshall Smith (no relation), ministers and other senior staff with free luxury box NHL tickets during the Edmonton Oilers playoff run last year.

Smith was AWOL for three days before she finally addressed the scandal. She directed AHS to finish an internal review, already underway, and deliver it to her personally so that tweaks could be made to the process.

As the Globe reported, Alberta auditor general Doug Wylie had already confirmed he would conduct an audit, but Smith asked for an expedited review and directed her officials to be “fully transparent.”

And finally Smith said she had committed no wrongdoing and “any insinuation to the contrary is false, baseless and defamatory,” which some have interpreted as a threat that could chill potential witnesses.

University of Alberta law professor Cameron Hutchison called the internal AHS review “bush league.”

“Anything that doesn't have the promise of full transparency, given the gravity of the allegations here, is totally inappropriate,” said Hutchison, an expert in whistleblower legislation.

“This is a standard corruption scandal and this is not what is needed here.”

Would Tremblay recuse himself?

University of Calgary health law professor Lorian Hardcastle said the Smith government seems “only interested in accountability once they have been caught.”

“They were happy to allegedly shut an investigation down when it wasn't known to the public, and the public wasn't calling for it, and they were content to not have that accountability flow,” she said.

Hardcastle said the Smith government doesn’t seem motivated by a desire to find out what happened or to hold people accountable; it’s simply the best response they could come up with after it was publicly exposed.

Others have pointed out that it is ludicrous for AHS to conduct an internal review when Smith fired Mentzelopoulos and the entire board of governors and placed deputy minister Andre Tremblay in charge of AHS.

It would be difficult to believe that, as deputy minister, Tremblay would not have been briefed on the contract processes. He also would have played a role in briefing the minister and in price setting, which was likely done not by AHS but rather politically by the minister’s office, as the Globe in fact reported Tuesday.

It would be a conflict if Tremblay did not recuse himself from the internal review.

It also makes no sense to deliver a report directly to Smith since it was her health minister and her chief of staff who have been accused of directly interfering in the procurement process.

And she herself took free hockey tickets from one of the business people at the centre of the scandal.

Hutchison said there are undoubtedly AHS employees who are implicated in the allegations of an overpayment scheme. Are they going to want to co-operate with an internal review? And those who aren’t implicated may be subjected to a pressure campaign or simply may not wish to risk their careers.

Apart from these obvious issues, Hutchison said AHS has clearly shown it is incapable of producing a fair and transparent internal review. He told The Tyee in April 2024 that a 17-month internal review by AHS into whistleblower complaints by five surgeons was “pathetic” and provided no transparency or accountability. The situation has now devolved into a flurry of lawsuits.

Hardcastle, the University of Calgary law prof, wonders how AHS would conduct an internal review when it effectively no longer exists as an arm’s-length organization from the government. Smith fired the board of governors and the CEO and now directly controls the organization, which is being broken up.

“The AHS will soon cease to exist in its current form,” she said. “If the people you need to talk to are no longer there, is the review a moot point?”

A history of firing truth seekers

Hutchison has more faith in an audit by the province’s auditor general. The auditor general, he said, can have access to all internal records, including those that carry solicitor-client privilege. And he said they can demand people give evidence under oath.

But as others, including Calgary Herald columnist Don Braid, have observed, auditor general Doug Wylie may be risking his job if he goes too hard on the Smith government.

The United Conservative Party crossed a line when, under Jason Kenney, it fired election commissioner Lorne Gibson in 2019.

After Smith won election, she followed through on a promise to fire chief medical officer of health Deena Hinshaw and AHS CEO Verna Yiu for their handling of COVID, which Smith thought infringed on anti-vaxers’ rights. Hinshaw’s job with the Indigenous Wellness Core, an AHS program focused on Indigenous health care, was also rescinded in June 2023.

The government also replaced ethics commissioner Marguerite Trussler after Trussler ruled Smith had interfered in the justice system in a way that was a “threat to democracy.” Smith had called the justice minister over a case involving a Calgary street preacher facing a charge for his involvement in the Coutts blockade.

Smith was unhappy with Trussler for limiting her free attendance at events and the number of gifts she could receive. Her government subsequently eliminated any limit on gifts, which allowed Smith, her ministers and staff to take free luxury box tickets to NHL games from Mraiche, a businessman at the centre of the current scandal.

The Tyee asked Wylie how he responded to the belief of some that his job will be at risk unless he soft-pedals his findings.

In an emailed statement, Wylie said he “swore an oath to faithfully and impartially perform the duties of the Auditor General, and he will continue to fulfil his obligation.”

AHS North Zone communications director Shelly Willsey did not respond to a phone call, followed by a list of questions from The Tyee, including whether an outside third party had been hired to conduct the investigation.

Scrummed by reporters while heading into a cabinet meeting Tuesday, LaGrange said a third party would conduct the review but she didn’t say who would conduct it or what its parameters would be.

The pros and cons of a public inquiry

Last week, Alberta NDP Leader Naheed Nenshi wrote the RCMP and asked for a criminal investigation. The RCMP has acknowledged the letter but has not indicated whether it will undertake such an investigation.

Nenshi also called for a full independent judicial inquiry.

Hutchison said such an inquiry is unlikely because they are expensive, lengthy and cast negative attention on them.

“It may be a bit premature,” Hutchison said. “I guess we will see how satisfactory the report of the AG is.”

Hardcastle thinks a public inquiry led by a judge is a good idea because it would be more wide-ranging and more transparent and could serve to restore trust in the health-care system. Recommendations from such inquiries are more likely to be implemented.

She also thinks it’s a good idea if for no other reason than it might explore broader issues, such as whether this scandal is the product of the chaos in the health-care system created by the government’s rapid reorganization and dismantling of AHS.

And whether private surgical facilities even make sense.

Hardcastle said first the Kenney government, and then Smith’s, forged ahead with the contracting out of surgeries when they knew from other jurisdictions, such as the United Kingdom and Australia, that there would be problems with conflicts of interest, higher per-surgery costs and poorer outcomes.

“The health-care system is under great strain, and we can't just continue with this organizational chaos instead of fixing the actual problems in the system,” Hardcastle said.

This scandal, and the ongoing chaos, may have a long-term detrimental effect on the province’s ability to retain and recruit health-care professionals.

“I worry that you have doctors who graduate medical school and are looking across the country at where they might do their residency — who would come to Alberta at this point?

If you have any information for this story, or information for another story, please contact Charles Rusnell in confidence via email.