POLITICS

Ex-Ornge exec says former McGuinty chief of staff contacted government

05/16/2012 10:28 EDT | Updated 07/16/2012 05:12 EDT
TORONTO - New questions are being raised about whether well-connected Liberals lobbied the Ontario government on behalf of Ornge, the provincial air ambulance service that's currently under a criminal probe.

Jacob Blum, a former executive at Ornge, told a legislative committee Wednesday that Premier Dalton McGuinty's ex-chief of staff Don Guy contacted the government on behalf of Ornge.

At the time, Guy — who ran McGuinty's last three election campaigns — was working with Alfred Apps, a lawyer working for Ornge whose law firm Fasken Martineau hired Guy for his consulting services.

Blum, who kept a journal of his work at Ornge, submitted handwritten notes to the committee as part of his affidavit about Guy's and Apps' involvement with Ornge.

His notes refer to a discussion in December 2007 with Apps and Guy — who left the premier's office in 2006 — about setting up a meeting between Ornge and the health and finance ministries.

The issue was to "ascertain what the Ministry of Finance's motives were for the purpose of consolidating Ornge's assets up into its balance sheets," Blum testified.

"These notes referred to the discussions surrounding that, who is going to handle the issue and how are we going to proceed."

Looking at his notes, but not reading them verbatim, Blum told the committee: "Senior finance is on our side, Don had spoken to them. This is his feedback: that senior financial was on our side — certain not offside — not trying to get us, confident he can manage the outcome."

The outcome was "winning by our principles of why we ought not to be consolidated, ensure that we got a proper hearing," Blum said.

The notes go on to say, "Don Guy setting up meeting with MOF (Ministry of Finance) and AG." Blum said that was also discussed during the call, but he can't recall whether the meeting happened.

Blum also told the committee that his other notes show "there had been phone calls and inquiries made into the Ministry of Finance about the consolidation issue by Mr. Guy through Alfred Apps."

Opposition parties believe Ornge didn't want consolidation because they didn't want the government to be able to look too closely at their finances. But the consolidation went ahead anyway.

Guy has testified that he didn't lobby the provincial government on Ornge's behalf.

Blum's claims "simply aren't true" and he did not lobby anyone, Guy said Wednesday.

"I didn't contact people and I never told him or anyone else that I did," he said in an email.

Outside the committee room, Blum said Guy was directed by Apps to set up the meeting with the Ministry of Finance and the AG.

When reporters asked who contacted the government, Blum referred them to his notes.

Apps, who later became president of the Liberal Party of Canada, has also denied that he engaged in lobbying.

However, Blum produced an email sent by Apps to Ornge executives on June 20, 2007, about a meeting between Mazza and McGuinty.

"Last nite (sic) worked perfectly," Apps wrote. "Chris was able to make a real connection with the premier, and to lay out the success story of Ornge at a high level in a way that provides the groundwork for our entire initiative."

Apps continues: "Once we have massaged the game plan past the Minister of Health, I will organize a follow-up private dinner for Chris with the premier so that he can outline the vision and the game plan in greater detail."

McGuinty said he met Mazza once in October 2005 and couldn't recall meeting him again. He acknowledged the possibility that he may have run into Mazza at a reception, but couldn't recall because he meets so many people at social events.

The New Democrats say Blum's testimony raises questions about whether there was lobbying done on Ornge's behalf.

"The evidence presented to us shows us behaviour that is completely in line with the behaviour of a lobbyist, where you sit in on meetings, you listen to what has to be done and you take away as your action plan everything that has to do with setting up meetings," said NDP health critic France Gelinas.

The committee is also examining questionable business deals, high executive salaries and details about the spinoff for-profit companies set up by Ornge, which receives $150 million a year from the province. Those companies are now being shut down.

Maria Renzella, a former executive of one of Ornge's for-profit entities, provided more details Tuesday about a controversial deal between Ornge and Italian helicopter firm AgustaWestland.

AgustaWestland struck a marketing services agreement with a private Ornge subsidiary controlled by Mazza shortly after Ornge paid $144 million for 12 of its choppers — a deal that some critics allege was part of a kickback scheme.

Ornge's dealings with Agusta — which Ontario's auditor general questioned in a scathing report on the air ambulance service — has come under intense scrutiny in the wake of the criminal probe over "financial irregularities." Agusta has denied any wrongdoing.

Renzella, who was terminated from Ornge Global GP, told the committee that she was involved in negotiating the marketing agreement with Agusta. But she wasn't involved in the helicopter purchase, which was handled by Mazza as well as consultants and lawyers hired by Ornge, she said.

Mazza told her that he'd struck a deal with Agusta to pay for weight upgrades, and wanted a $4.8-million donation in return, Renzella said.

"He wanted the donation to be used to help with these revenue-generating opportunities," she said.

Mazza asked her to consult Ornge's lawyers about how to make that happen, she said.

"The lawyers did come back to me and said what Dr. Mazza wished to do cannot be done, especially in regards to a charitable organization," Renzella said.

"You could not take funds like that, receive them and have them used for revenue-generation activities."

Ornge's lawyers told them that in order for the transaction to go through, "a value for the service being given had to be demonstrated," she said.

She suggested to Mazza that Ornge could provide marketing services and talked to the lawyers about whether that "would be something that was legally qualifying," she said. Mazza talked to Agusta about it, she added.

The committee heard last week that Mazza turned down a deal to waive the weight fees.

Rick Potter, a former Ornge executive and director, said he convinced Agusta to waive $10 million in additional fees, which he felt the company wasn't entitled to under the terms of the agreement.

But Mazza told him that the extra charges should be paid, Potter said. Ornge ended up paying Agusta $7.2 million in additional charges, which Potter said was "nuts."

Both the auditor general and the ousted Mazza's replacement, Ron McKerlie, say they found no evidence that the work performed reflected the amount of money it was paid.