Alberta government faces scrutiny over handling of AHS procurement investigation

Danielle Smith's government is under fire over the way it is handling an auditor general's inquiry into procurement procedures at Alberta Health Services.

The provincial government is under fire for directing Alberta Health Services staff to refer interview requests from the auditor general to government-hired lawyers—a move critics say could hinder an ongoing investigation into multimillion-dollar procurement contracts.

In a directive to staff on April 9, Alberta Health instructed employees that “the OAG may reach out to you for an interview as part of their investigation into AH and AHS procurement processes. Please redirect the OAG representative to our legal counsel Rose LLP.”

The email included template language for staff to use in reply, noting the government “has retained legal counsel to represent us in the OAG investigation.”

Opposition NDP House Leader Christina Gray called the directive “a gag order” and accused Premier Danielle Smith’s government of trying to suppress evidence and shield political allies.

“Does the premier realize how corrupt this looks?” Gray asked during question period.

“This week, the premier told her radio show the AG could call anyone he wants, which is ridiculous because they’ve told them not to pick up the phone.”

Smith rejected the accusation, saying the legal co-ordination is meant to streamline the process.

“Of course the AG can talk to anyone he chooses to who is a current employee or a former employee,” Smith said in the legislature.

“The role of having a single point of access is to facilitate access.”

But that explanation conflicts with the auditor general’s understanding.

In a statement, a spokesperson for Doug Wylie said:

“This came as a surprise to the Auditor General, and our office will be seeking clarity on why that communication was sent. We want Albertans to understand that the Auditor General will do everything necessary within his powers to ensure he has access to the information and the individuals required for his work.”

Even United Conservative MLA Peter Guthrie, who resigned from cabinet earlier this year over concerns about the government’s dealings with private health contractors, expressed alarm at the move.

“This highlights some of the very reasons I resigned from cabinet,” Guthrie said.

“And why I called for a judicial review, full co-operation with the RCMP and our government’s co-operation with the Auditor General.”

On Monday afternoon, the Alberta legislature rejected an NDP motion calling for a public inquiry into the AHS investigation and the government’s letter to staff.

The vote fell along party lines with one exception — Guthrie voted to support the opposition motion.

The controversy is one of several overlapping probes into Alberta’s health contracting, which include an RCMP investigation, a review by retired Manitoba chief judge Raymond Wyant, and the auditor general’s own audit of pandemic-era procurement and charter surgical facility contracts.

A central figure in those investigations is MHCare Medical and its CEO, Sam Mraiche.

Former AHS CEO Athana Mentzelopoulos, fired on Jan. 8, has filed a $1.7-million lawsuit alleging her dismissal was tied to attempts to scrutinize AHS contracts—including those with MHCare.

None of her allegations have been tested in court.

In an eight-page letter to government and the media, MHCare rejected accusations of misconduct.

“The unspectacular truth is that Mr. Mraiche’s interactions with government, those in elected office and senior staff, fit entirely within the established parameters of typical government relations for the CEO of a commercial entity,” the company wrote.

The letter detailed the company’s pandemic-era delivery of PPE and children’s medications, claiming more than 98 per cent of supplies were accepted without issue.

It also defended a delayed shipment of injectable acetaminophen, blaming the holdup on Health Canada’s regulatory process and saying a new application would be filed by the end of April.

University of Calgary law professor Lorian Hardcastle said the legal redirection risks compromising the integrity of the auditor general’s work.

“I think that probably the reason this is being done is not to streamline anything, but rather to ensure greater government control over the investigation,” said Hardcastle.

According to Hardcastle, the government’s co-ordination may prevent the AG from getting “full and complete” access to information, raising concerns about both accountability and public trust.

Even if no wrongdoing is found, she said, the government’s approach could leave lasting damage.

“The perception is going to be that this is going to result in not-complete information getting to the auditor general,” she said.

“If you’ve got nothing to hide, why not go for a public inquiry?”

Smith, meanwhile, continues to defend her government’s actions, repeating that more than 13,000 records have been turned over and insisting that the system in place ensures nothing is missed.

“There are dozens, if not hundreds of staff that are going to be co-ordinated so that they can give their testimony,” she said.

“We are looking forward to seeing that review of documents so that we can get to the bottom of if there has been any wrongdoing.”