Alberta premier, health minister say they weren't involved in awarding private surgery contracts
All contracting decisions were made by Alberta Health Services, Smith said
Alberta Premier Danielle Smith and Health Minister Adriana LaGrange say they had no involvement in determining the details of contracts with private surgical facilities and stressed that all such decisions were made by Alberta Health Services (AHS) staff.
The two politicians were responding to a lawsuit filed by Athana Mentzelopoulous, the former CEO of AHS, claiming LaGrange and staff in Smith's office applied pressure to renew and sign contracts. In her statement of claim, Mentzelopoulous alleged she had concerns about conflicts of interest in procurement and faced pressure to renew contracts with chartered surgical facilities at prices she thought were too high.
At a Wednesday news conference in Calgary, Smith said all contracting decisions were up to AHS.
"They were the ones who drafted the [requests for proposals]," Smith said. "They were the ones who went out and received the bids. They were the ones who chose the proponent. And then they were the ones who were charged with the task of negotiating the terms of the agreement.
"The only role that the minister or government had was saying, 'Are you done yet? Have you got to the finish line yet? You've been working on these contracts for years. When can we expect them?'"
In answer to a question from a reporter, both Smith and LaGrange said they received no kickbacks from private surgery contractors providing publicly funded procedures.
Smith said she supports LaGrange staying as health minister, adding that LaGrange took the necessary steps to investigate the allegations.
Deputy minister replaced
The premier said cabinet appointed Darren Hedley on Wednesday as the acting deputy minister of health, while the government and auditor general reviews procurement and contracting practices.
He replaces Andre Tremblay, who has also been serving as the AHS CEO and official administrator in lieu of a board of directors. Tremblay will continue in those two roles.
Smith said cabinet asked for Tremblay's power to be limited during the investigation because they were "not comfortable with the mingled role."
As well, Smith said a "legal conflict wall" will ensure AHS's lawyer — and not Tremblay — is responsible for handing records over to investigators, she said.
No surgical contracts will be awarded while the reviews are ongoing, Smith added.
Lawsuit from former CEO
Mentzelopoulos detailed her allegations in a $1.7-million wrongful dismissal lawsuit filed against LaGrange and AHS in Edmonton court last week.
Mentzelopoulos's statement of claim alleges the government fired her one year into a four-year contract in part because she'd "authorized an internal investigation and forensic audit into various AHS contracts and AHS procurement processes, including contracts with private health-care providers and suppliers."
Her statement of claim also goes on to say she had supported assessing "contracts with several private surgical facilities whose principals were connected to various government officials."
In the statement of claim, Mentzelopoulos also alleged government officials pressured her to extend contracts with Edmonton-based Alberta Surgical Group, and to sign new private surgery contracts with proponents in Red Deer and Lethbridge.
After LaGrange issued a directive on Oct. 18, 2024, ordering the government to take over contract negotiation with chartered surgical facilities, Mentzelopoulos alleged the proposed new rates were pricier than in comparable contracts "and would lead to significantly increased costs to AHS — and potentially hundreds of millions in profits for the [facilities] owners," the lawsuit says.
Mentzelopoulos said she also expanded AHS investigations to look at AHS's procurement with medical supply company MHCare. The company, owned by Sam Mraiche, secured a $70-million contract in late 2022 to import five million bottles of children's painkillers from Turkey during a national drug shortage.
Most of the product AHS paid for has never come to Canada or been distributed to pharmacies or hospitals.
Mentzelopoulos was terminated on Jan. 8, which she said is two days before she was scheduled to meet with Alberta's auditor general to discuss the allegations. None of Mentzelopoulos's allegations have been proven in court.
AHS called resistant to changes
LaGrange reiterated Wednesday that she had spent eight months asking Mentzelopoulos to provide evidence of wrongdoing in contracting and procurement, but did not receive any "substantive information and documentation."
Mentzelopoulos has denied this in her statement of claim.
LaGrange said she will file a statement of defence in court in coming weeks.
She said a senior government official is searching for a lawyer to conduct an external review into the allegations.
The province and AHS have until March 4 to file statements of defence in court. Mentzelopoulos's lawyer said neither has filed responses to date.
In response to questions, the premier said she knew by fall 2024 that LaGrange was conducting a third-party review into the pricing of surgical procedures at different facilities.
Smith said LaGrange had not told her about allegations of conflicts or potential wrongdoing.
LaGrange's spokesperson, Jessi Rampton, has previously said Mentzelopoulos's departure was part of a planned reconfiguration of the province's health-care system.
Smith's government is in the midst of splitting AHS into four new organizations – Primary Care Alberta, Acute Care Alberta, Recovery Alberta and Assisted Living Alberta.
On Wednesday, Smith said AHS leaders are resistant to the systemic changes and are standing in the way of the transition.
"Having to give 18 directives to AHS demonstrates just how much resistance we were facing from AHS management," Smith said.
In an email late Wednesday afternoon, Mentzelopoulos' lawyer Dan Scott said his client was hired as CEO in December 2023 at Alberta Health's behest to lead the health-care transformation changes.
"Athana Mentzelopoulos has no idea what the premier is talking about — unless making sure that public health dollars are spent properly counts as 'resistance,'" he said in an email.
At a Calgary news conference, Opposition NDP Leader Naheed Nenshi said the government should call a judge-led public inquiry to ensure transparency. He said Tremblay or the government are still in charge of accepting the results from other reviews.
"What we saw from the premier, as always, was a master class in gaslighting, in deflecting and diffusing, in attempting to talk about other things and make people mad about other things and not taking any responsibility," Nenshi said.
He has also called for all ministers named in the lawsuit to step aside.
Lawyers representing MHCare have said the lawsuit between Mentzelopoulos and AHS is a private dispute between two litigants that is currently before the courts.
A Feb. 7 statement from Alberta Surgical Group said leaders were shocked and dismayed by the allegations, adding the claims are false.
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With files from The Canadian Press