TORONTO - That’s one rotten Ornge.


“To the nose of this watchdog, this just didn’t pass the smell test,”
Auditor General Jim McCarter said Wednesday after releasing a special
report on the province’s troubled air ambulance service.
“The ministry didn’t do its job in protecting taxpayers’ money.”


Tens of millions of dollars were wasted and patient safety possibly
compromised, McCarter said, when senior execs at Ornge started weaving a
convoluted web of private, for-profit companies out of the non-profit
ambulance service in 2006.

The result is a corporate structure so complex, even McCarter and his
team of auditors aren’t sure they’ve identified all the firms involved
and were never able to track all the revenue streams.

Ornge was so opaque and dense, McCarter said his own investigators
wound up explaining some of the corporate structures to the its own
lawyers at one meeting.

What enabled the Ornge corporation to go rogue, McCarter said, was a
weak and inadequate operating agreement signed in 2005 with then health
minister George Smitherman, which enabled Ornge to borrow money without
ministry approval, prevented the ministry from recovering assets or
funding and even sheltered Ornge from being called before a committee
for questioning. Ornge execs - who stonewalled McCarter at every step of his
investigation - even told him at one point “it’s not government money,
it’s our money,” he said. McCarter stopped short of blaming Health Minister Deb Matthews by
name but said the ministry was resistant to acknowledge the seriousness
of the situation, was lax in its oversight and ignored countless “red
flags” on the file.

Matthews, who announced Wednesday a new operating agreement with
Ornge and new legislation to toughen oversight of the agency, placed the
blame on Ornge’s senior execs and board members who she said misled her
about what the corporation was up to.
She’s since called in the OPP to investigate.


“I am sickened when I see people who are in a position of trust who abuse that trust,” Matthews said.


“We’re talking about people who took money out of the pocket of
taxpayers in this province..., so they could put it in their own pocket.
I am outraged by those actions.”
And Matthews brushed off calls from both opposition parties demanding she resign.


“I have taken real responsibility with the changes I have made,” she said.


“This is clearly an issue that is unacceptable and I have taken my full share of responsibility for that.


“But my number one job is to fix the problem and I am doing that.”


Tory MPP Frank Klees - who has led the charge on Ornge since first
raising it in the House last spring - said there is ample evidence now
that Matthews had oversight powers and failed to exercise them. “This report is just confirmation of the fact that this minister under her watch allowed this scandal to develop and to grow,” Klees
said, calling for the minister’s resignation.

“When people hear about shell companies, diverted millions and
missing funds, they think of organized crime not their health care
system,” New Democratic Party Leader Andrea Horwath said.
*****


Key findings of Auditor General Jim McCarter’s special report on Ornge air ambulance service include revelations that Ornge:

• Purchased its Mississauga HQ with $15 million of borrowed money.
  Ornge then leased itself the space at 40% over market value over 25
  years, paying $2 million more than comparable tenants over five years

• Used profits from that overpriced rent to borrow more money, some of which was channeled back to a now bankrupt subsidiary

• Bought 11 used helicopters — some up to 30 years old — for $28
  million, used them for less than two years and then began selling them
  for less than $8 million
• Spent $148 million on 12 new helicopters for air ambulance use,
  then put 12 seats in two of them, making them unusable for medical
  purposes

• Received at least $4.8 million from the helicopter maker in a
  contract that was shifted from Ornge to a subsidiary shortly after the
  auditor’s probe began, making it impossible for McCarter to review

• Received another $2.9 million charitable donation from the
  helicopter maker to improve patient care and training. Ornge then spent
  $500,000 of that money on two custom built Orange County Chopper
  motorcycles, one of which has never made it to Ontario

• Received $13 million a year for inter-facility land transfers but only performed 15% of the projected 200,000 trips
• Bought 10 new planes and 12 new helicopters when its own analysis showed six planes and 10 helicopters were needed

• Paid five senior executives at Ornge a total of at least $2.5 million in annual salary

• Paid six Ornge board members total of $643,000 in 2010/11 as a
  “retainer” with one member receiving more than $200,000. The auditor was
  denied employee expenses to review

• Amassed $210 million in publicly-funded assets shifted to private, for-profit firms