POLITICS

Ousted Ornge CEO Chris Mazza called shots on $144M helicopter deal: ex-exec

05/30/2012 11:27 EDT | Updated 07/30/2012 05:12 EDT
TORONTO - Ornge failed to do its job when it spent $6 million on medical interiors for its new helicopters that didn't allow paramedics to perform CPR and other life-saving procedures at all times, a former top executive testified Wednesday.

Tom Lepine, who was fired as Ornge's chief operating officer, said he only discovered the problem with the medical interiors of the AW-139 helicopters in late 2010, after the first chopper went into service.

Ornge paid $144 million for 12 helicopters from Italian firm AgustaWestland, whose dealings with Ornge have come under intense scrutiny. It also paid $6 million for the Swiss-manufactured Aerolite medical interiors.

Lepine, a former paramedic, acknowledged that Ornge didn't ensure that the helicopter interiors were suitable when it made the deal.

"I think it was an absolute failure of process that there was no prototype done," he told a legislative committee.

"That would have been caught if we had done a prototype and it was not done."

The "floating accountability" at Ornge made it difficult to pinpoint who was to blame, he added.

Lepine acknowledged that he was part of the team — including paramedics — who travelled to Switzerland to examine the interiors and make suggestions. But he denied he was in charge of signing off on the design.

Once he was aware of the problem, Ornge immediately started working on a fix, he said. He said he was told Ornge's medical experts had deemed the helicopters safe for patient transport, but later found out that Ornge's medical director, Dr. Bruce Sawadsky, hadn't seen the interiors.

Conservative Frank Klees listed five incidents between May and October 2011 that were related to the design of the helicopter interiors. They included jammed stretchers, patients unable to sit upright and paramedics unable to perform CPR. In all cases, the patients died.

Lepine said he was aware of some of those incidents, but insisted that paramedics could perform CPR in the new helicopters, except during take-off and landing.

"That's not to say it was an acceptable design," he said. "It wasn't."

Lepine also denied that he ignored warnings from paramedics about the design of the interiors or that he downplayed the problem as a "glitch."

"It was always more than a glitch," he told reporters.

Ornge is still looking for a permanent fix for the interiors. It said a temporary fix has been made to all the helicopters that addresses some of the most serious concerns.

The committee also heard from another former Ornge executive, who provided more details about the organization's negotiations with AgustaWestland and a controversial deal Klees has alleged was part of a kickback scheme.

Tom Rothfels said he led the negotiations with Agusta for the helicopter purchase, but it was ousted CEO Chris Mazza who was calling the shots.

Rothfels said he wasn't involved in the marketing services agreement that's come under intense scrutiny by the committee.

The committee has heard that Agusta paid an Ornge spinoff company $6.7 million after it reached a deal on the helicopters — which included the $4.7-million agreement for marketing services. Agusta has vehemently denied any wrongdoing.

On paper, Rothfels was chief operating officer of Ornge International. But he agreed that he was basically "COO of nothing" because the company was never incorporated and described Ornge's web of for-profit subsidiaries as "spaghetti."

The committee is also looking at other questionable business deals, high executive salaries and details about the for-profit companies set up by Ornge that are now being shut down.

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 police probe of "financial irregularities" at Ornge, which receives $150 million a year from the province.

Maria Renzella, former chief operating officer of Ornge Global, had previously testified that Mazza struck a deal to pay Agusta for weight upgrades. In return, he wanted a $4.8-million donation from Agusta to be used to help with Ornge's "revenue-generating opportunities."

The committee had previously heard that another Ornge executive, Rick Potter, convinced Agusta to waive extra fees — about $10 million in total — but Mazza insisted that they be paid. Ornge ended up paying Agusta $7.2 million in additional charges, which Potter called "nuts."

Rothfels, who was chief operating officer at Ornge International, said he thought Mazza's decision was "certainly surprising."

He confirmed that there was no need to pay the extra fees because Agusta wasn't entitled to them under the helicopter purchase agreement.

"Things were somewhat siloed and so people stuck to what they were told to do," Rothfels said.

"If there was speculation about it, there may also have been ... because Chris was involved in direct discussions with senior people at Agusta, maybe there was something else going on that people weren't aware of."

Renzella said she was advised by Ornge's lawyers that it couldn't use the money in the way Mazza wanted unless Ornge could demonstrate that there was a value for the service being given.

She suggested to Mazza that Ornge could provide marketing services and Mazza talked to Agusta about it, she said.

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