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Two former bureaucrats confused by Ornge mess

For years, whistleblowers, opposition parties and even bureaucrats
raised red flags that trouble was brewing at Ornge, which is now under a
criminal probe for financial irregularities, a legislative committee
has heard.

But no one seems to know why they weren't acted upon until late last
year, when Ontario's auditor general told Health Minister Deb Matthews
that he was being stonewalled by Ornge.

Ron Sapsford, who acted as deputy minister of the health ministry from
2005 — the year Ornge was created — until 2009, said Wednesday
that Ornge withheld information that might have raised suspicions.

"Actions were taken that were not revealed, and things were done behind
closed doors and difficult to discover and understand,'' he said.

"I think if you start there, then the problem becomes: well, how do you
catch with that? And I guess in this particular case, it took the
provincial auditor's report to do that.''

Auditor General Jim McCarter has criticized the governing Liberals for
failing to oversee Ornge, despite giving it $730 million over five years
and allowing it to borrow another $300 million.

Concerns about Ornge were raised last year in a letter by bureaucrats
who examined Ornge's financial statements. The lending of millions of
public dollars, the potential transfer of other taxpayer funds outside
the province and the purchase of a building that was leased back to the
publicly funded organization were some of the issues they highlighted.

Health Minister Deb Matthews testified that the letter, marked
"Confidential Advice to Minister'' wasn't meant for her, but senior
bureaucrats in her ministry.

McCarter's report also focused on the complex web of for-profit
companies set up by Ornge to generate revenue, many of which were
controlled by executives. The committee has heard that public money
likely flowed to those companies.

But it's not unusual for non-profit agencies funded by the government to set up for-profit companies, Sapsford said.

Ontario hospitals also set up for-profit subsidiaries to generate
revenue. But taxpayer dollars are not supposed to flow to the for-profit
businesses, he said.

Matthews maintains that she didn't know that anything was wrong at Ornge
until late last year, when McCarter told her that Ornge was
stonewalling his investigation.

She insists Ornge went rogue, misleading her about its activities and
not disclosing key information that would have spurred her to take
action sooner to rein it in. Ousted CEO Chris Mazza said the ministry
was informed of all the changes he was making at Ornge, but they never
told him he was veering off course.

The committee also heard from Hugh MacLeod, a former assistant deputy
minister in the health ministry who was part of the initial discussions
about consolidating the province's air ambulance service under one roof.

He said the impetus to get it done as quickly as possible came from
Toronto's 2003 outbreak of SARS, which shone a spotlight on weaknesses
in the service that were also highlighted by coroners and the auditor
general.