I anticipated that the Wyant report would absolve Smith and her political officials of any wrongdoing in the Mentzelopoulus affair. The premier wasted no time end declaring that Wyant had found no evidence of political meddling in the procurement practices of AHS.
While it is true that the judge found no evidence of political meddling, he did acknowledge that there was political contact and it was justified in the name of accountability.
Caveats to Report
The Globe and Mail report on Wyant’s report listed a number of limitations that the retired justice faced.
These caveats included
- inability to examine witnesses under oath;
- inability to subpoena witnesses;
- the “lack of vigor” in not be able to cross examine witnesses in a formal setting;
- the burden of dealing with two and a quarter million documents that were sent in multiple intervals and were not indexed or organized in any form;
- a limited short and focused timeline; and
- very specific terms of reference which did not give him a wider mandate to pursue questions within the investigation.
Politicians absolved
With respect to the question of wrongful interference by government officials while he found no evidence he felt he could not make a “final and absolute determination.”
The specific terms of reference for Raymond Wyant’s mandate are found on pages 6 and 7 of the report.
Mentzelopoulos pleadings supported
It is important to note is that the concerns Athana Mentzelopoulos raised in her litigation against AHS and the Crown are all supported by the retired judge’s findings. However he did not make a determination on the political interference allegations in the main because of the handicaps noted above.
Who was and was not interviewed
On page nine is a list of persons interviewed by the retired justice. Notable exclusions from the list are three board members of Alberta Health Services (AHS) (Edmonstone, Haggis and Oberg), the lobbyist for ASG- Doug Horner, the premier, her health minister, Rob Anderson of the premier’s office, the chief of staff to the Minister of Health, Evan Romanow, deputy minister of Mental Health and Addiction, as well as Ray Gilmour the former deputy minister of Executive Council. Marshall Smith who is at the centre of the political meddling allegations was interviewed.
The two transactions
Let’s look at Wyant’s detailed analysis and conclusions with respect to two items. First one is the procurement of children’s medication that came from the Turkish company Ataway which was facilitated by MHCare. The second concerned contracting with Alberta Surgical Group (ASG).
In both cases the procurement process was hijacked by a series of conflicts of interest. In effect, two individuals Jitendra Prasad and Blayne Iskiw went back and forth between AHS, the Department of Health, ASG, and MHCare blurring the lines of who they were really working for. Pages 12 to 15 detail the labyrinthine revolving door appointments and assignments of these two individuals. In addition, Wyant reports on the companies established by both individuals and their varied connections with MHCare and Sam Mraiche.
Analgesics Contract
Wyant concludes “AHS procurement decisions were not consistent with established policies in the context of the government’s expressed policy objectives, nor were they consistent with the procurement policies of AHS.”
Further
Decision-makers should have ensured that the purchase order and contracts were reviewed by the AHS legal department for completeness and for the protection of AHS. Decision-makers should have pursued inquiries as to whether AHS was bound to complete the contract or purchase order once the other party was unable to satisfy its terms.
In this case the investigator “did not find any documents or hear from anyone interviewed that any minister or member of a minister’s staff acted improperly during the procurement process or made any inquiries that were inconsistent with the exercise of accountability.”
There are a number of anomalies identified with respect to the contracting for children’s medicine in the winter of 2022. For example, on 1 December 2022 Jason Copping then Minister of Health issued a detailed directive to procure needed children’s medicine (p. 17). However, even before the directive was issued AHS had given three options to the minister concerning seeking the go-ahead of Health Canada. The minister opted for Option 3 which was to acquire the medications prior to receiving Health Canada’s clearance. This choice is entirely consistent with the new premier’s strategy of asserting provincial jurisdiction.
Remarkably the day after the directive was issued, the official Administrator for AHS, Dr. John Cowell approved the importation of 5-million bottles of children’s analgesics, even though the department recommended only 500,000 bottles were needed (p. 17).
Wyant does remind his readers that it was important to consider the events of the time- “the impacts of the COVID pandemic, and the lack of availability of children’s analgesics was a significant concern not only to the government, but also to parents with sick children.”
Nevertheless, the alacrity by which the procurement proceeded as well as the multiple conflicts of interest would result in a largely undocumented contract using a middleman, MHCare.
As structured by Prasad, AHS did not want to be the importer even though it was not unusual for AHS to procure directly from manufacturers.
On the same day the directive of Copping’s was sent, Prasad had already prepared a briefing note rationalizing why AHS “did not want to be the importer.” Included in the briefing was a fabrication that MHCare had a Drug Establishment License, when it did not!
The report then goes on to itemize the horrendous lack of documentation for the $70 million purchase
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“I did not see any correspondence between AHS and MHCare regarding the terms of the purchase order.”
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“I found no documentation between AHS and Atabay to confirm that the manufacturer of the drugs set five million bottles as a minimum purchase amount.”
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“I found no documentation between AHS and Atabay to confirm that the manufacturer of the drugs set five million bottles as a minimum purchase amount.”
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“The PO did not disclose what portion of the $14 per bottle was payable to Atabay and what portion was payable to MHCare.”
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No evidence with respect to respect to the prepayment of an additional $28 million when the contract was entered into and acetaminophen intravenous (IV) was substituted for children’s analgesics.
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“Nor have I seen any correspondence or document that reveals that AHS made inquiries of Atabay or MHCare for the details of the importation contract and agreement. I have not seen any contract between Atabay and MHCare to verify Atabay’s assertion that they are contractually bound not to comment.”
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“I was not able to definitely determine who drafted the contract, but I can say no one from AHS legal was involved.”
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“ I was not able to determine how the figure of $56 million was arrived at.”
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“I did not see a document that reviewed what legal options AHS had in relation to the failure to complete the contract or purchase order.”
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“I did not see any documents that disclosed the interaction between Atabay and MHCare”(pages 20-23)
And so on.
Chartered Surgical Facilities (CSF)
His observations are equally scathing concerning the handling of contracting between AHS and CSFs. Once again, the heart of the problem was deep conflicts of interest involving Prasad and Iskiw.
Wyant findings include:
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“I did not find any documents to demonstrate that the inquiries made either through AH or through the Minister’s office were anything other than inquiries consistent with accountability to ensure the government’s policy objectives.”
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AH (Alberta Health) and AHS procurement decisions were not consistent with established policies. The proponent for the EZ short-term contract had been unsuccessful in the RFP process.”
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The involvement of Iskiw and Prasad in the various CSFs reviewed was problematic.”
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“I believe that his ability (Iskiw) to use his knowledge in negotiating on behalf of vendors with his former employer points to a need for greater clarity in the Conflict of Interest Bylaw.”
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“Because ASG now needed a new financial backer, they raised this issue with Mr. Iskiw, who told them he might have an interested party. He held discussions with Mr. Mraiche, who then became involved as ASG’s financial backer for the CZ (central zone) and SZ (south zone) CSFs. Dr. Scheelar said that AHS was advised that Mr. Mraiche was now involved; AHS agreed to this arrangement.”
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The numbered company that owned the land and would build the facility in which the CSF was to be located was owned 75% by the numbered company that was wholly owned by Mr. Mraiche.”
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“AH and AHS employees and the agents and staff of companies involved in procurement did not investigate a conflict where a person was providing a contractor with advice while that person was employed at AHS.”
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“From April 26, 2022 to October 29, 2022, Mr. Prasad was an advisor to AHS at the same time as he was assisting ASG. His involvement should have been flagged immediately, particularly by Mr. Iskiw, his recent subordinate and then successor.”
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“I did not find any documents to demonstrate that the inquiries made either through AH or through the Minister’s office were anything other than inquiries consistent with accountability to ensure the government’s policy objectives.”
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“Mr. Prasad stated that he did not receive any remuneration for the assistance he provided ASG. This was confirmed by Dr. Scheelar who said, “we did not pay JP a dime.”
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“Mr. Iskiw described ASG as a client of his consulting company.”
Despite this Wyant found “AH and AHS procurement decisions were 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 procurement (emphasis added).”
Opinion
I take his assessment with a grain of salt. How in the world could these shambles of a procurement process be consistent with established policies other than in the narrow context of policy? Policy was the contracting out system of the UCP government. Is he saying that because contracting out was occurring or was in the process of occurring, the process of procurement doesn’t matter? The fact that this activity took place shortly after Smith was sworn in and before Mentzelopoulos took the reins is highly determinative to me. That the most senior officials of Alberta Health and AHS were either unaware of these obvious conflicts and didn’t raise an alarm or simply did not know about problems in procurement is baffling to say the least. Was the deafening silence because public servants were unwilling to bring this problematic procurement to the Minister’s office? Or perhaps they were advised to tread carefully? This we do not know. The same is true with the various administrators or CEOs of AHS. That this situation carried on from within six weeks of the swearing in of a new government cannot be rationalized away by saying the senior officials were carrying out government policy while ignoring due process. This is a very black mark on the bureaucracy within AHS, Alberta Health and the whole public service. These examples of waste of public resources were something that Ms. Mentzelopoulos did not tolerate, which set the wheels in motion for decisions made at the highest level to fire Mentzelopoulos and the board of AHS.
Recommendations
David Climenhagen had an excellent write-up on the Wyant report in The Tyee. He terms the numerous recommendations “sensible” while some are problematic as AHS is being dismantled. I am not so sanguine about Wyant’s recommendations, 18 in total. Specific recommendations include: centralization of conflicts of interest within AHS; a vendor code of conduct; cooling off periods; whisteblower protections; mandatory training on conflicts of interest; standard procurement contracts; and prohibiting any individual from “utilizing their personal email address for any purpose related to work for the government of Alberta, Crown Corporations or other public entities without approval in writing from their immediate supervisor, who must be provided with a reason for the exception.” While these steps are individually reasonable, taken as a collective -hey will produce more bureaucracy and make-work, taking public servants away from concentrating on the matters they are tasked at. More fundamentally such recommendations place more onus on both ticking boxes while removing the onus on public servants’ ethical conduct to serve the very public which pays their wages. Specifically, if officials are corrupt no amount of regulations and procedures will prevent them from serving their interests, not the public’s. I am not suggesting that ethics training is the answer either. This rot usually starts at or near the top and leads to a fear of speaking out against self-enrichment. ATB and West Edmonton Mall is a classic example of leadership failure brought to light when an ethical CFO made sure the loan guarantee was recorded in notes to the financial statements.
The Alberta public sector faces an existential crisis. New leadership that is decidedly non-partisan and thoroughly professional is needed to attract the best university graduates who believe public service is a worthy avocation.
The step shoe to drop for the Smith government is the Office of the Auditor General’s report on the Mentzelopoulos affair. Given the potentially broader scope of the OAG inquiry and his powers to subpoena and require testimony under oath, we may learn more about the political interference allegations. Given the number of documents and the number of players in these events, I would be surprised to see the report tabled this year.
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