Report into Alberta Health Services contracts finds conflicts widely known

A report into Alberta Health Services contracts reveals widespread conflicts of interest, but found senior officials failed to take action.

A final report into allegations of corruption in Alberta health contracts says it was widely known two staffers were in “real or perceived” conflicts of interest but no steps were taken by senior health officials.

Former Manitoba judge Raymond Wyant writes in the report that his investigation was limited in getting to the bottom of the scandal involving multimillion-dollar Alberta Health Services deals for pain medication and private surgical providers.

Wyant says he found no evidence of wrongdoing on the part of Premier Danielle Smith, her ministers or other political staff.

But he says limited powers afforded to him mean he can’t make any definitive statements.

“That only means that I found no evidence of such,” he says in the report, released Friday. “I can only make conclusions based on the documents I was able to review and the people I interviewed.”

Wyant makes 18 recommendations for the Alberta government and health agencies, including improving conflict and procurement policies and better whistleblower protection.

The investigation stemmed from allegations in a wrongful dismissal lawsuit filed by a former chief executive officer of Alberta’s provincial health authority. Smith’s government ordered the investigation in March.

Wyant interviewed 26 people for his investigation, including a businessman at the heart of some of the allegations and the two staffers found in conflict, Jitendra Prasad and Blayne Iskiw.

“The situations ... where both Mr. Prasad and Mr. Iskiw were in real or perceived conflicts of interest, were widely known by many people at AHS, and yet no steps were taken by senior officials to deal with the situation with either person,” Wyant writes.

“Most people seemed to have assumed that those in charge were aware of and had dealt with (or were dealing with) these matters, but this does not appear to have been the case.

“This demonstrates the need for having processes that would allow people to bring matters such as this to the attention of others without fear.”

Neither Smith, nor her current chief of staff, nor any of her ministers or her former health minister were among those interviewed.

Incomplete information

Because the investigation was not a public inquiry, Wyant says some refused interviews and avoided answering certain questions.

“Because there was not the kind of vigorous examination and cross-examination that would take place in a formal setting, I could not come to conclusions on the credibility of information provided verbally by interviewees.”

Wyant says he felt many tried to tell the truth, but he was given the impression that some weren’t providing “complete information.”

Smith, in a statement, said the report “clearly indicated” elected officials, senior staff and members of the public service acted appropriately.

However, she said she’s “deeply disappointed with the way these procurements and contracts were dealt with by AHS decision-makers and some of its employees.”

The premier said she has directed her top bureaucrat, Dale McFee, to work with the government ministries involved to implement Wyant’s recommendations.

Former AHS CEO responds

Former Alberta Health Services CEO Athana Mentzelopoulos says the findings in Wyant’s report validate the concerns she raised before her dismissal earlier this year.

“I am grateful for the work of the Honourable Raymond Wyant, and I have reviewed his report carefully,” she said in a statement.

“While I will not comment in detail given the ongoing litigation, it is clear from Judge Wyant’s findings that the procurement and governance concerns I was investigating during my tenure at Alberta Health Services were serious and needed to be fully investigated.”

Mentzelopoulos said Wyant’s findings echo many of the same issues she was pursuing prior to being removed from her role.

“His report confirms that these were very legitimate issues that AHS was continuing to investigate when I was terminated two days before my meeting with the Auditor General to discuss many of these same issues,” she said.

She also noted the limitations of Wyant’s review.

“It is important to note that Judge Wyant’s review was not a formal public inquiry. He was unfortunately limited in his mandate, and was not able to compel testimony under oath,” she said.

“Within those limits,” she added, “the report nevertheless identifies many of the same concerns and issues that I was attempting to investigate and address as CEO, and I am thankful for his excellent work.”

Premier defends response, won’t commit to public inquiry

Smith says she won’t call a public inquiry into Alberta Health Services contracts, insisting the Wyant report and other reviews provide enough information to address problems within the system.

“We know what the problem was,” Smith said when asked if she would commit to a public inquiry. “The problem was bad practices at AHS procurement, and we have already taken the steps to address that.”

Smith said her government has already acted by restructuring AHS and transferring procurement responsibilities to a new health agency.

“We are turning Alberta Health Services into a service provider of hospital services,” she said. “This confirmed the fact that we needed to move in this direction — that AHS had practices that senior leadership was not enforcing their own policies.”

She said she has directed McFee to implement all 18 of Wyant’s recommendations across government.

“I would like all 18 recommendations implemented and make sure that it’s not just in this level of procurement, but across all departments that do procurement, so that these kinds of bad management practices do not set in,” Smith said.

The premier also faced questions about the province’s dealings with MHCare Medical and its owner, Sam Mraiche, whose company supplied children’s pain medication under a contract that has since been criticized.

“It’s AHS decision-makers who have been responsible for the contract negotiations and will be responsible for the settlements,” Smith said. “The Wyant report made it very clear that there was no wrongdoing on the part of elected officials, any of their staff or any of the public servants who were involved in this.”

Asked if she knew how much MHCare profited from the deal, Smith said she did not.

“I don’t know the answer to that question,” she said.

“That’s why it’s alarming that AHS would write a contract, but they don’t have those kinds of details. That’s why we have to take over procurement from AHS.”

Smith added that a separate review is underway to reconcile the financial details.

“RSM Canada has been contracted to review the details and provide Judge Wyant a reconciliation of the numbers,” she said. “When that report is received, it will be provided by government, and it will be made public.”

Alberta NDP demands public inquiry

Alberta NDP deputy leader Rakhi Pancholi says the Wyant report confirms what many have long suspected — that the government ignored its own rules and failed to ensure transparency in major health-care contracts.

“The report that was released today really shows what Albertans already knew — that AHS procurement policies were not followed, and that there was a clear conflict of interest in the Turkish Tylenol and private contracted surgical facilities contracts,” Pancholi said.

“What the report does not answer is the question of who in the UCP directed or encouraged the conflict of interest and that those procurement policies shouldn’t be followed.”

She says that Smith’s comments misrepresented the findings.

“The premier says Judge Wyant’s report clears her and her ministers, but not a single one of them — not one UCP elected official or their staff — agreed to be interviewed,” Pancholi said.

“Judge Wyant himself concluded that he cannot make that assessment because the premier did not give him the authority to make that assessment.”

Pancholi says only a public inquiry can uncover the full extent of what happened.

“Danielle Smith would love it for Albertans to think that this issue is over, but it is not,” she said.

“The one central question that has still not been answered is what role did she, her ministers and her staff play in directing AHS to disregard procurement policies and line the pockets of UCP friends. Only a public inquiry will answer that.”

Alberta NDP house leader Christina Gray echoed those concerns, saying the report lacked the powers to compel evidence.

“From the very beginning, we have called for a full independent public inquiry,” Gray said.

“Justice Wyant did not have the tools to subpoena witnesses, compel testimony and he had very limited scope. Some people refused to be interviewed.

“He says in his report that he was left with the impression that some people were lying or hiding information.”

Gray says the findings point to a deeper problem of accountability.

“Albertans are left with hundreds of millions of dollars of wasted taxpayer money and a premier who refuses to acknowledge her own impact in making the health-care system worse,” she said.

“Every day she does not call a full public inquiry is another day Albertans have reason to believe this is a cover-up.”

Health critic Sarah Hoffman says the government “did not put patients first.”

“The UCP decided to do what they always have done — put their friends and insiders first,” Hoffman said.

“Premier, minister, every member of the UCP, you need to do the right thing. You need to call a public inquiry. The only way to act in the public interest is through a public inquiry.”

Legal analysis

Lorian Hardcastle, an associate professor in the Faculty of Law and Cumming School of Medicine at the University of Calgary, says the report offers important lessons for how conflicts of interest are managed in Alberta’s health system.

“The report makes a number of recommendations that can be implemented in terms of conflict of interest and managing conflicts in the future,” she said.

“It does seem that this is a government that is likely to engage in significant contracting in the health sector with for-profit entities, and so it’s really important not only that we uncover what’s gone on, but that we make changes, so future contracts won’t have these concerns.”

Hardcastle says Wyant’s findings were “appropriately very critical” of how Alberta Health Services handled procurement of children’s pain medication and surgical contracts.

“There were concerns across the board around the process that was followed, how hasty it was and some of the transparency around the decisions being made,” she said.

“There were concerns around contracts not being appropriately viewed by legal and various other things that just shouldn’t have happened.”

Hardcastle also notes the report was limited in scope and authority.

“This report was constrained in terms of the terms of reference that it had, and also in the powers that it has,” she said.

“Unlike a public inquiry, where witnesses can be compelled to testify and be cross-examined, this is more limited in scope. It was simply interviews.”

She says that limitation supports continued calls for a broader probe. “Frankly, a public inquiry should have been called right from the get-go on this,” she said.

Hardcastle says the larger question raised by the report is whether Albertans are getting value for money.

“You have this Tylenol scandal, these surgical contracts where different facilities are getting paid vastly different amounts of money, and nobody can seem to answer why,” she said.

“It should be incumbent on the government to demonstrate that these major changes they’re making in the health-care system are ones that are well-supported.”

AHS statement

Late Friday afternoon, CTV News received a statement from AHS spokesperson Kristi Bland:

“Alberta Health Services (AHS) accepts the findings contained in Judge Wyant’s report. In recent months, AHS has been working alongside our partners to strengthen internal controls and improve training. We are also committed to enhancing our conflict-of-interest disclosure processes,” the statement said.

“With new leadership in place at every level of our organization, we will continue to build on these improvements while focusing clearly on our new mandate of providing Albertans with high-quality hospital-based acute care services.

“We will co-operate fully to implement Judge Wyant’s recommendations.”

With files from The Canadian Press