whipline wrote:Everyone is focusing on the money trail right now. Wait for the coroners report on how many deaths are attributed directly to ORNGE. They had a policy in place to wait a minimum of 10 minutes to launch the helicopter after an emergency call was placed so they wouldn't spend money in case the person died. So much for the golden 60.
Seriously? What's the "golden 60"?
It's more commonly known as the Golden Hour.
From Wiki:
In emergency medicine, the golden hour refers to a time period lasting from a few minutes to several hours following traumatic injury being sustained by a casualty, during which there is the highest likelihood that prompt medical treatment will prevent death. It is well established that the patient's chances of survival are greatest if they receive care within a short period of time after a severe injury; however, there is no evidence to suggest that survival rates drop off after 60 minutes. Some have come to use the term to refer to the core principle of rapid intervention in trauma cases, rather than the narrow meaning of a critical one-hour time period.
whipline wrote:The golden 60 is the first 60 minutes after the accident. Simple concept, the longer you go without emergency care the less chance you have to survive. ORNGE should have been dispatching critical care immediately. Their policy was the opposite.
In the States, they could be charged with careless disregard.....here, not so sure. If they find ONE where a fast dispatch would have made a dif, I hope some of the pricks go to jail.
Ornge: Helicopters’ tail rotors could fall off, says Frank Klees
Published On Mon Mar 5 2012
Rob Ferguson
Queen’s Park Bureau
The safety of patients and crew members on Ontario’s ORNGE air ambulance helicopters is at risk because the choppers’ tail rotors could fly off, says Progressive Conservative MPP Frank Klees.
At least three crashes have occurred outside Ontario with the same model of helicopter having tail rotor problems, he told the Legislature Monday as opposition parties kept pressure on the government over the ORNGE scandal.
Catching Health Minister Deb Matthews off guard, Klees showed air worthiness directives from the European Aviation Safety Agency that have pointed to the Agusta Westland model 139 choppers and warned about the safety of their tail rotors.
“They fall off,” Klees told reporters later, noting that the OPP is investigating a questionable $6.7 million payment from Agusta Westland to ORNGE for marketing services.
“I would not want to be a pilot, I would not want to be a paramedic and I would not want to be a patient,” said Klees. “Whether safety was trumped by the financial dealings, I don’t know.”
Matthews acknowledged she was unaware of the directives and told reporters: “We’ve got people at ORNGE who are responsible for this, so I would urge you to have that conversation with ORNGE and get the facts.”
The air ambulance service said in a statement that it has gone “far above and beyond” steps recommended in the air worthiness directives because “the safety of our employees and patients is the number one priority.”
ORNGE, also under investigation for other financial irregularities after a forensic audit by the government, paid the Italian helicopter company $144 million for 12 of the helicopters.
A directive from the European agency last Aug. 19 ordered helicopter owners to replace the tail rotors after 600 hours of flight following a fatal accident “possibly caused by cracks in a TR (tail rotor) blade.”
“This condition, if not detected and corrected, could lead to a TR structural failure resulting in loss of control of the helicopter.”
Another directive Feb. 17 called for inspections and maintenance of the tail rotors after every 25 hours in the air.
The August directive applied to ORNGE choppers but the one in February did not, air ambulance spokesman James MacDonald said in a statement.
There were daily inspections from August to February of the tail rotor blades if the helicopters had flown and daily monitoring of data tracking the mechanical functions of the choppers.
“No defects were found during this time. We continue to carry out 25-hour inspections on all our AW139 helicopters,” the statement added.
“Of the almost 400 AW139 aircraft that are currently in service, in some of the most challenging situations around the world, ORNGE operates one of the youngest and newest fleets.”
Mr. Klees... Do you not realize that probably every aircraft you or your family have ever flown on has safety related airworthiness directives issued for it at one time or another? In another story you're quoted as saying you will not fly on these helicopters, even if you are sick... that you would find another way to get to the hospital. I'm not down playing the seriousness of the tail rotor issue on the AW139s... the issue was identified and is being dealt with internationally under the oversight of aviation authorities. Come on Mr. Klees, enough of the sensationalist BS. Keep the proper targets in your sights and don't start down the wrong path... you will only minimize your integrity in this mess.
ORNGE spin-off thanks to George Smitherman exemption, says Matthews
Published 1 hour 2 minutes ago
Article Rob Ferguson and Robert Benzie
Queen’s Park Bureau
The spin-off of the troubled ORNGE air ambulance service was done without competitive bidding thanks to an exemption sought by then-health minister George Smitherman, says Deb Matthews, Ontario’s current health minister.
Smitherman’s move eventually enabled the assets to be handed over to an organization headed by Dr. Chris Mazza, who has since been sacked.
“That was the decision that was made,” Matthews said Tuesday, adding that the deal was not subject to a request for proposals (RFP) from prospective operators of air ambulances in 2005.
“There was an amendment passed in the Legislature that gave the minister authority to establish this.”
Asked if the unusual move, which appears to contravene traditional government practices on bidding, was approved by Smitherman and was solely for ORNGE, Matthews said: “Yes. George.”
Opposition parties noted a lack of competitive bidding is also what led to the spending scandal uncovered at eHealth Ontario after Smitherman left the health portfolio. Consultants at the electronic health records agency earned as much as $3,000 a day, yet expensed tea and cookies to taxpayers.
Smitherman said: “An RFP would have been used if we were interested in outsourcing but we were not.”
“Could you imagine the hue and cry if I had moved to put Ontario’s Air Ambulance out to tender?” he told the Star from China.
“In that model we could have had the Australians running the system,” said Smitherman, emphasizing he “inherited” Mazza from the previous Conservative government, which had begun consolidation of air ambulance services.
As the scandal and OPP investigation into financial irregularities at ORNGE have shown, that plan didn’t work out so well because there wasn’t enough government oversight, said Progressive Conservative MPP Frank Klees.
“When you avoid a competitive, open, fair bidding process, you open the door for what has happened at ORNGE and eHealth,” said Klees, his party’s transportation critic.
NDP health critic France Gelinas noted that Mazza, a former emergency room doctor at Sunnybrook hospital, was “hand-picked.”
ORNGE set up a web of for-profit companies to capitalize on the $150 million a year the air ambulance service got from Ontario taxpayers. In one instance now under police scrutiny, ORNGE was paid $6.7 million in “marketing services” by its Italian helicopter supplier, AgustaWestland.
In July 2005, Smitherman described the new ORNGE as a not-for-profit, government-funded service to “streamline our air ambulance system to better ensure that emergency coverage improves across the province, especially in northern and rural communities.”
An ongoing Star probe has revealed that Mazza earned $1.4 million a year, and got loans from ORNGE to buy a posh home in Etobicoke. The health ministry sent in forensic auditors to check the books and the government has since taken steps to shut down the complex web of for-profit companies at ORNGE aimed at selling consulting services overseas.
Kevin Donovan, Rob Ferguson and Robert Benzie
Queen’s Park Bureau
Rick Potter, who was ORNGE’s chief aviation officer, has been removed from the job, ORNGE spokesperson Jennifer Tracey confirmed Wednesday afternoon.
Potter, as top aviation official, was the designated “accountable executive” for ORNGE’s large new fleet of 10 helicopters and 10 airplanes.
ORNGE’s vice-president of aviation, Jim Feeley, will take over as “accountable executive” with responsibility for overseeing the fleet. He’s accountable to Transport Canada, which regulates air travel.
A recent Star story revealed that Potter lied about having an MBA from a Scottish university in a 2009 pitch to private investors.
In a statement to the Star Potter said former ORNGE boss Dr. Chris Mazza told him to say he had the degree because “it would look better in the prospectus.”
Potter’s future at ORNGE is unclear. For now he has been assigned the relatively minor role of handling the change over of the formerly outsourced helicopter bases from Canadian Helicopters to ORNGE. That changeover is complete March 31.
Meanwhile, Employees at ORNGE were slated Thursday to get a pep talk from the new boss who cleaned up eHealth, the electronic health records agency dragged through the mud in 2009.
The brass at ORNGE had turned to eHealth chief executive Greg Reed to help point the way for staff and the organization to regroup in the midst of an ongoing public relations nightmare.
But suddenly on Wednesday — after an inquiry from the Star — a spokeswoman at eHealth said Reed had “respectfully declined” the invitation because “he felt it was not the right time.”
Heather Brown, of eHealth, said it would be “premature” to for Reed speak to ORNGE staff because the agency is still in “transition,” she added.
ORNGE investors will collect $22M a year from taxpayers
March 11, 2012
Kevin Donovan
Investors in ORNGE air ambulance will soon be raking in $22 million a year with Ontario taxpayers footing the bill.
It’s all part of a payment schedule set in motion in December 2009, when former president Dr. Chris Mazza and lawyer Alf Apps sold bonds on the private marketplace so that a fleet of airplanes and helicopters could be purchased.
Financial documents show that starting next year taxpayers will pay $22.1 million to the institutional investors across Canada that purchased $275 million of the low-risk bonds. This year, documents show taxpayers will pay $15.7 million to investors but that will be interest only — the contract states that interest and principal payments will begin at the end of 2012. Investors are paid interest of 5.7 per cent annually.
Taxpayers already pay $150 million to ORNGE annually to perform air ambulance services. ORNGE does not make detailed financial statements public (it is also not covered by freedom of information laws) and so theStar could not determine how much of the new annual $22.1 million payment will come out of what taxpayers already pay ORNGE, and how much will be payments on top of the $150 million.
Investors were quickly attracted in 2009 by a prospectus that boasted ORNGE was “the glue that holds the Ontario health-care system together.” Though the Ontario government did not guarantee the bonds, it was made clear to investors that taxpayers would pay investors back.
Meanwhile, the top official whose MBA was faked on the prospectus has formally been fired. Rick Potter, who said Mazza told him to pretend he had an MBA from a Scottish university because it would look good to investors, has been told to leave ORNGE March 31.
ORNGE originally told the public and staff that he was demoted but in actual fact he was “terminated” March 1 and asked to stay around four weeks to complete a project, spokesperson Jennifer Tracey said.
The $275 million “bond issue” is controversial for two reasons.
First, it is unclear where all the money raised has gone. An analysis by the Star could account for only $250 million, including payments for ORNGE’s office building, a fleet of 12 helicopters and 10 airplanes.
ORNGE was originally created in 2005 as a non-profit but Mazza quickly began a whirlwind of schemes and dreams, setting up for-profit companies and buying a fleet of helicopters outfitted with medical interiors that have caused one problem after another.
Some of the excess money likely went into poor or excessive business decisions, such as the “ORNGE Pickers” that were supposed to lift patients into aircraft but never did (the arms were made too short), and the complicated medical interior that all but pinned a patient against the aircraft roof during flight making it impossible to do CPR.
Other money, the Star has found, funded lavish trips to Italy, Switzerland, Brazil, the Middle East and other places, to investigate business opportunities that never came to fruition. Forensic auditors and the Ontario Provincial Police are probing ORNGE.
The second reason the bond issue is controversial is that it’s unclear whether it was necessary to purchase a relatively large fleet of aircraft and a huge office building that is only 75 per cent occupied. ORNGE is still paying to lease its former office space, though they are not using it.
Until Mazza went on his aircraft buying spree, ORNGE contracted with a large helicopter company (Canadian Helicopters) and a series of small air ambulance companies that provided air ambulance service. ORNGE was the coordinator and dispatch agent.
Today, Ontario taxpayers pay $150 million a year to fund ORNGE, making payments on the bond issue, paying for the contract carriers that still do work in Northern Ontario, and paying high salaries. In December, the Star revealed Mazza was paid $1.4 million a year. In January, the Star revealed Mazza in one year was given no-interest loans and cash advances of $1.2 million.
Other executives have been paid between $300,000 and $800,000, sources say. ORNGE and the provincial health ministry have not revealed the salaries, though opposition critics say the salaries should be disclosed on the provincial sunshine list.
Apps, who helped Mazza with many of his plans, earlier told the Star the $275 million bond issue was one of the most successful of its kind ever. Apps was counsel at the time to law firm Fasken Martineau, which worked on the deal and did much of ORNGE’s legal work. Shortly after the Star revealed Fasken Martineau received fees of about $9 million from ORNGE over a six-year period, Apps left the firm.
Nice to see another member of management got canned.
Who's to say the government wont dissolve Ornge Air to pay back the private investors! Voters and the opposition will not let this one slid under the rug. I dont want to see 22.1 million of my tax dollars paying for shitty PC12 aircraft. I can almost bet that those planes will be sold off and the contract will go out to tender like it has for the past 20 years. If I were an Ornge Pilot I would sharpen my pencils and start mailing a resume.
They will not under fund the Air Ambulance system in Ontario and with the government budget I really doubt they will up the yearly funding to $172.1 million to cover the loans.
Found a reference to the Ornge Issuer Trust debenture on line --- the bond pays out until July 2034!!!
Those 22 years from now to 2034 equates to over $485 million. Add to that the interest only payment made in 2011 and we're looking at the raping of taxpayers for more than $500 million. That is just plain criminal.
orngecrush wrote:Found a reference to the Ornge Issuer Trust debenture on line --- the bond pays out until July 2034!!!
Those 22 years from now to 2034 equates to over $485 million. Add to that the interest only payment made in 2011 and we're looking at the raping of taxpayers for more than $500 million. That is just plain criminal.
Nothing criminal about it at all - it's basic math and corporate finance. Ornge raised $275-million of 25-year debt by selling AA- unsecured amortizing bonds priced at a 5.727% coupon. The debentures were priced at 183 basis points over comparable Government of Canada bonds, and 80 basis points above Government of Ontario bonds - very competitive pricing and not bad for an unsecured debenture. TD Securities was lead manager, with National Bank Financial and Scotia Capital as co-managers. The financing was placed with 13 different buyers. It was an arms-length deal negotiated very competitively between the lenders and the borrower, each of whom were looking after their own interests.
There may well be more than a whiff of criminality about Ornge - we'll wait for the authorities to finish their various investigations - but I don't think this deal is going to be tarred with that brush.
You are correct about the yield etc. BUT...these bonds were NOT available to the public. They were sold in a private placement in ONE DAY! Retirement fund bought them? Maybe. We tried to find out who bought them after the initial issue but to no avail; no one was talking. BIG SECRET at the time and still is. It would be really interesting to see who REALLY bought these things. Liberals and Liberal insiders perhaps? I wish I had even known they were available...I would not be sitting here typing this...
The problem is that the government is "apparently" on the hook for this. How did this happen? Well, that is what we are NOT hearing! This is Liberals looking after Liberals...a great way to help the old retirement fund!
OPP in the hunt for Ornge’s missing millions
jacquie mcnish AND karen howlett
From Tuesday's Globe and Mail
Published Tuesday, Mar. 13, 2012 3:00AM EDT
Last updated Tuesday, Mar. 13, 2012 7:35AM EDT
An Ontario Provincial Police investigation into the province’s air ambulance service Ornge is centring on a $24-million mortgage loan that was borrowed last year against its Mississauga head office.
According to people familiar with the criminal probe, police are particularly concerned with $5.6-million of the financing that was diverted to an affiliated holding company that paid compensation to a number of the service's former senior officers. The affiliate, Ornge Global GP Inc., was forced into bankruptcy proceedings in February after it was discovered that the unit had no money or assets to repay the $5.6-million it borrowed from the air ambulance service. "The money is gone and the OPP are trying to find out what is was used for,” said one person familiar with the investigation.
If Ornge is unable to recover the missing money, Ontario taxpayers could be on the hook for the unpaid $5.6-million because the government-funded service is currently operating with a deficit. According to the provincial public accounts, Ornge reported a $9-million deficit for the fiscal year ended March 31, 2011. Ornge Global GP is one of nine for-profit companies that were launched under the direction of former chief executive officer Chris Mazza to create a new profitable business and an additional revenue stream for the Ontario government by selling air ambulance services outside Ontario.
The bold vision disintegrated into a political scandal earlier this year, however, when revelations surfaced that the for-profit companies were paying Dr. Mazza and a number of his senior officers lavish paycheques and other benefits. Ornge’s directors, Dr. Mazza, and most of his senior executives have left the service. Ontario’s Minister of Health Deb Matthews called for a police investigation last month after she said she had been misled about Ornge’s use of taxpayer’s money.
Ontario’s Auditor-General is expected to issue an audit report next week that sharply criticizes the provincial government for its failure to properly oversee Ornge, which was founded in 2005 to centralize the province’s fragmented and costly system of air ambulance services.
Ms. Matthews said in a statement last week that the government is moving to strengthen its authority over Ornge.
The short, controversial life of Ornge’s $24-million mortgage highlights the potential risks of allowing taxpayer-funded public agencies to mix their business with private-sector companies. As governments increasingly turn to private contractors to provide public services more efficiently, the tale of Ornge’s missing money underlines the importance of strong oversight and financial transparency when public- and private-sector resources are combined.
The governance challenge is particularly acute for sprawling departments such as the Health Ministry, whose annual $47-billion budget accounts for 42 per cent of the province’s program spending.
“Health has so much money sloshing around that if the governance isn’t pristine there will be a lot of opportunities for things to go wrong,” said the person familiar with the investigation.
The most puzzling thing about Ornge’s $24-million loan is that it was made at all. According to records obtained by The Globe and Mail and interviews with sources, Ornge purchased its head office on Mississauga’s Explorer Drive in 2009 for $15-million with a loan from an insurance company.
The building is directly owned by Ornge Global Real Estate, an Ornge unit that was largely dormant until January, 2011. That month was a turning point for Ornge. On Jan. 24, Ornge’s chairman Rainer Beltzner and legal adviser, former Liberal Party president Alfred Apps, sat down with half a dozen senior officials from the Ministry of Health to outline plans to create a for-profit division that would expand air ambulance services into new markets.
Mr. Beltzner could not be reached and Mr. Apps declined to comment.
According to presentation materials, the Ornge team promised it would fund “the bulk of its working capital” through a private sale of $20- to $30-million of private equity in Ornge Global GOP. A small portion of funds, the presentation stated, would come from a $9-million “surplus” on its head-office property.
That surplus, was in fact a new $24-million head office mortgage, arranged with the Bank of Nova Scotia and Toronto Dominion Bank, that sharply raised the value of a property acquired two years earlier for $15-million. The loan was signed seven days after the meeting with Ontario officials. Several weeks after the loan was signed, sources familiar with the transaction said an Ornge subsidiary sent the money over the wall to its private sector affiliates by making a $5.6-million loan to Ornge Global GP.
What was billed to Ontario officials as a minor investment, in fact became Ornge Global’s primary source of funds. The promised equity sale of more than $20-million never materialized, said one person familiar with the offering, “because investors wouldn’t bite.”
When Ornge’s new management learned in January, 2012 that Ornge Global had no assets to repay the loan, the unit was pushed into bankruptcy proceedings.
With a report from Celia Donnelly
ORNGE scandal: Auditor General to release probe Wednesday
Fri Mar 16 2012
Robert Benzie
Queen's Park Bureau Chief
Auditor General Jim McCarter will unpeel ORNGE on Wednesday.
McCarter’s long-awaited probe into the troubled air ambulance service had been so stymied by then-executives at ORNGE that Health Minister Deb Matthews had to intervene.
The province’s watchdog began a routine audit of ORNGE early last year, but was stonewalled by brass there until Matthews ordered them to cooperate in December.
Her intervention came in the wake of a Star investigation that has led to massive changes at ORNGE, including the dismissal of chief executive Dr. Chris Mazza, who was earning $1.4 million a year. Ontario Provincial Police swept into ORNGE to examine a $6.7 million payment from an Italian helicopter firm and $1.2 million in loans and a cash advance to Mazza, among other matters.
The Star’s Kevin Donovan has exposed a litany of unusual business practices at the agency over the past four months and Progressive Conservative MPP Elizabeth Witmer (Kitchener-Waterloo) predicted more could emerge in McCarter’s review.
“I believe there will be some additional information that has not yet been shared,” said Witmer, a former health minister under Tory premier Mike Harris.
“It’s going to be a very uncomfortable situation for the premier and for the minister. As you know, this issue was raised for months before the minister acknowledged it or did anything about it,” she said Friday.
Witmer said she expected revelations that would be difficult for Premier Dalton McGuinty to explain.
“It’s going to be very embarrassing for the government and … very embarrassing for Premier McGuinty because it’s obvious that his office was briefed almost a year before and they took absolutely no action,” she said.
“It could be quite disastrous for them.”
Indeed, ORNGE’s tangled web of related for-profit companies designed to leverage $150 million a year in public funding with only 3 per cent of proceeds flowing back to government coffers has raised questions.
There was also $600,000 in taxpayer-funded MBA degrees for seven ORNGE executives, the $144 million purchase of 12 new AgustaWestland helicopters — after the Italian firm paid an ORNGE subsidiary millions in “marketing service” fees — and a $15.6 million Pearson airport-area headquarters nicknamed “the Crystal Palace,” renovated for $478,000.
Senior Liberal officials say they expect a damning report from McCarter, but note new legislation governing ORNGE will be tabled as early as next week to ensure such problems don’t reoccur.
"Senior Liberal officials say they expect a damning report from McCarter, but note new legislation governing ORNGE will be tabled as early as next week to ensure such problems don’t reoccur."
OH good I'm glad it wont happen again!!!!! LOL WTF I'm running for office next time! 4 years and a pension and as much $$$$$ as you can steal!
ALL bonds, at least all gov't and large corporate bonds, get sold that way. The primary market sells only to investors that can handle large fractions of the issue. They will certainly in turn put those out on the secondary market if you have a burning desire to be owed money by ORNGE/GovOnt. You can participate in the primary market too: just assemble an investment fund big enough to handle a significant portion of 275M or whatever.
SaabPilot said it: This looks and smells like completely normal bond issue. And before you get too worried about the taxpayer being 'on the hook' for 275M understand that this year Canadian Govt at the fed/prov/muni levels will issue tens of billions of dollars in bonds. Hell, probably this quarter. And the tax-payer will be on the hook for every penny of that too.
ORNGE: George Smitherman blames ministry officials and board for scandal at air ambulance
Tue Mar 20 2012
Former health minister George Smitherman spearheaded the creation of ORNGE after coroners' reports and audits had urged Ontario to fix its patchwork of air ambulance delivery.
RICK EGLINTON/TORONTO STAR file photo
Robert Benzie
Queen’s Park Bureau Chief
As Ontario’s auditor general unleashes a critical probe of ORNGE, former health minister George Smitherman is defending his role in the creation of the controversial air ambulance service.
“The system is set up always to throw the politicians under the bus,” he said on the eve of Auditor General Jim McCarter’s special report Wednesday.
“There’s one minister of health and . . . there’s thousands and thousands of people in your sphere of influence,” said the one-time deputy premier, who left provincial politics for a 2010 Toronto mayoral bid he lost to Rob Ford.
In 2005, Smitherman spearheaded the service that eventually became known as ORNGE — for its orange aircraft — after a slew of coroner’s reports and audits had urged Ontario to fix its patchwork of air ambulance delivery.
“What’s being lost in this discussion is that the model that Ontario has is — from the standpoint of its ability to protect human life — far superior to what we had. That’s been lost in the conversation,” he said Tuesday.
A Star investigation of ORNGE has led to sweeping changes, including the dismissal of chief executive Dr. Chris Mazza, who made $1.4 million a year, the replacement of the board of directors, and the Ontario Provincial Police being called in.
The agency’s complicated web of related for-profit companies, which were designed to leverage $150 million a year in public funding with only 3 per cent of proceeds flowing back to the government, has also sparked concerns.
The Progressive Conservatives and New Democrats on Tuesday used their majority in the House to out-vote the Liberals and strike an all-party committee to examine some of those concerns.
The committee — the striking of which is largely symbolic — could conduct public hearings, force witnesses to appear, and provide whistleblower protection, but still requires Liberal cooperation to move ahead.
Smitherman stressed most of the transgressions did not happen on his 2003-08 watch, but he did not blame Health Minister Deb Matthews or her predecessor David Caplan.
“I feel like I have been scapegoated and in certain sense by a combination of the Star and the ministry of health communications branch. It’s just too convenient to lay all of the blame at the foot of the politicians,” he said, criticizing ministry of health bureaucrats and the former board at ORNGE.
“Chris Mazza is articulate, intelligent, passionate and he was the guy that I inherited at the ministry of health. This guy was around since 1996, working at Sunnybrook,” said Smitherman,
“Obviously, he got carried away. It’s not Mazza operating alone. This guy had a blue-chip board. Where were they in all of this?” the former minister said.
“What did the ministry do? Let’s call them what they are — the funder. What did sugar daddy do?” he said, adding bureaucrats should have “tightened up their cash flow to get their attention.”
Instead, ORNGE paid $600,000 in taxpayer-funded MBA degrees for seven ORNGE executives and bought a $15.6 million Pearson airport-area headquarters that was renovated for $478,000.
While some senior Liberals have privately tried to blame Smitherman for the ORNGE imbroglio, Matthews wasn’t going there on Tuesday.
“We had a very serious lapse of leadership at ORNGE. I’m not going to second-guess the minister who was there at the time it was set up,” she said.
“I do believe that it was set up with all the right intentions, but what we have learned is we did not give ourselves enough oversight capacity and we’re going to rectify that.”
Last fall, McCarter was stonewalled by ORNGE officials and Matthews had to step in and tell them to cooperate.
Convoluted transactions inflated value of Ornge’s head office
karen howlett AND jacquie mcnish
From Wednesday's Globe and Mail
Last updated Wednesday, Mar. 21, 2012 3:58AM EDT
An audit to be released on Wednesday raises questions about a lease on the Mississauga head office of Ontario’s embattled air ambulance service that is well above the going rate for neighbouring buildings. The publicly funded Ornge pays $1.4-million a year to one of its subsidiaries to lease the sprawling, two-storey building, documents show. The lease is among controversial financial transactions designed by former insiders of Ornge to create $9-million in surplus value that they in turn lent to one of their private, for-profit companies.
Ontario Auditor-General Jim McCarter questions why Ornge is paying a “premium” over similar buildings in the area to lease its head office, according to people familiar with his audit.
Ornge signed a 25-year lease in January, 2011, agreeing to pay $19.45 a square foot for the 75,000 square foot building, land title documents show. The going rate for office space in Mississauga ranges from about $12 to $15 a square foot.
The lease inflated the value of the building – an Ornge entity had acquired it two years earlier for $15.6-million – and provided the collateral for a $24-million mortgage loan, the documents show.
The mortgage financing is one of a number of convoluted transactions that have made it challenging for investigators to trace the flow of money at the ambulance service. One of the toughest puzzles has been finding the $24-million raised in the mortgage financing. According to people following the money trail, the former insiders diverted $9-million from the mortgage financing to Ornge Global GP Inc., a company created to pursue the medical transport business outside Canada.
The Globe and Mail has reported that $5.6-million that Ornge Global GP spent is the focus of a separate Ontario Provincial Police investigation. Taxpayers are now on the hook for the mortgage loan as well as $275-million in debentures. Ornge was created in 2005 to manage all aspects of the province’s air ambulance service. It receives $150-million a year in government funding but also raised money from private investors, many of them Canadian pension funds.
Ornge was marketed to investors as a quasi-government entity that compared favourably to other public sector borrowers, helping it secure a top credit rating for its debentures. Ornge’s new management has concluded that the air ambulance has no choice but to repay the money, even though the government never guaranteed this obligation.
“Walking away is not a good option,” said a person familiar with the situation. “All you really do then is harm the private sector that did nothing wrong.”
The Health Ministry is expected to be harshly criticized in the auditor’s report for failing to use its powers to oversee Ornge. In the legislature on Tuesday, the Progressive Conservatives and New Democrats joined forces to pass a motion calling on the McGuinty government to appoint a committee to investigate Ornge.
Former Ornge managers and board members refused to co-operate with the auditor, Canadian Press reported.
Amid all the scandal swirling around the organization, the biggest challenge for the new management is trying to retain crucial paramedics, pilots and other air ambulance workers at a time when morale is low.
In such an environment, it is impossible for an organization that provides a life-saving service to hire new employees, said the unnamed person. “We’ve got a fragile organization,” he said. “Our brand in the marketplace is mud.” (you think????)
With a report from Celia Donnelly
ORNGE: Liberals vow to take action on all Auditor General recommendations
Published 18 minutes ago
Article
Ontario Minister of Health Deb Matthews says her government will heed all recommendations from the province's auditor general concerning the troubled ORNGE Air Ambulance service.
Ontario Minister of Health Deb Matthews says her government will heed all recommendations from the province's auditor general concerning the troubled ORNGE Air Ambulance service.
Pawel Dwulit/THE CANADIAN PRESS
Rob Ferguson and Tanya Talaga Queen’s Park Bureau
Under fire for the ORNGE scandal, Health Minister Deb Matthews says she’ll take action on all the recommendations being made Wednesday by Auditor General Jim McCarter on fixing problems at the troubled air ambulance service.
Matthews said the government put in place a new “performance agreement” with ORNGE this week that boosts powers to audit, inspect and verify financial information coming from the agency.
Along with new legislation to come later Wednesday, the performance agreement “will give us the powers we need to safeguard patient care, stop future abuses and get better value for our air ambulance dollars.”
McCarter’s report will not be made public until the noon hour.
Among the troubles uncovered at ORNGE by the Star’s Kevin Donovan, deposed chief executive officer Dr. Chris Mazza was being paid a salary of $1.4 million a year, air ambulance helicopters were purchased for $144 million from Italian company Agusta Westland but had little overhead room for paramedics to properly administer CPR to patients, and Agusta paid ORNGE $6.7 million for questionable “marketing services.”
As well, Mazza received loans from ORNGE to purchase a stately home in Etobicoke.
The financial irregularities prompted Matthews to call in a forensic audit team from the finance ministry, and later turned the case over to Ontario Provincial Police for investigation.
Ron McKerlie, the interim CEO of ORNGE, welcome the amended performance agreement with the province.
“This amended performance agreement is a key step toward ensuring the people of Ontario have confidence in the vital, life-saving service provided by our frontline crews every day,” said McKerlie.
Some of the provisions in the performance agreement includes tying ORNGE’s funding to key indicators and public reporting of expenses.
“As we embark upon this renewed and improved relationship, we welcome the new transparency provisions, which will ensure past mistakes are not repeated,” said McKerlie.
Ornge overspending slammed by Ontario auditor general
Province operated air ambulance service like a 'mini-conglomerate'
CBC News Posted: Mar 21, 2012 10:07 AM ET
Former Ornge excs did not co-operate with probeAn Ontario auditor general's report says the province did little to oversee spending at Ornge, the scandal-plagued air ambulance service.
The long-awaited report by Jim McCarter was released Wednesday, and says the Health Ministry did little to oversee the $700 million it handed to Ornge over the past five years.
Orgne also borrowed almost $300 million to buy more airplanes and helicopters than it needed. and used taxpayer dollars to repay the debt, McCarter found.
Since the creation of Ornge in 2006, taxpayer funding of the air ambulance service shot up 20 per cent while the number of patients transported dropped six per cent, McCarter found.
"Ornge is a textbook example of what happens when the government doesn't get the information it needs to properly do its job," McCarter said.
The auditor says the government should have paid much closer attention to potential conflicts of interest since the people running Ornge were also shareholders in a web of private companies billing taxpayers for services.
McCarter said Ornge, created in 2006 as a non-profit agency to provide air amulance service, "soon begame a mini-conglomerate" of spinoff companies operating with little or no government oversight.
"Of particular concern to us was the fact that certain of these companies were owned by Ornge's president, senior members of its management team and it's board of directors.
"To the nose of this watchdog. This didn't pass the smell test," said McCarter.
The auditor also found Ornge bought three more helicopters and four more airplanes than its own analysis showed it needed and planned to allow the private companies to use them.
The agency is selling some of those used helicopters it bought with the money at a loss.
Health minister promises action
McCarter said he has not been given access to the paper trail from all the Ornge spinoff companies, meaning he has not been allowed to review details of a $5-million payment from an Italian helicopter maker.
That payment is now the subject a criminal probe by the Ontario Provincial Police.
Among McCarter's other findings:
The number of patients Ornge carried fell while its budget increased.
A land-based ambulance service added by Ornge carried only 15 per cent of the number of passengers projected at a per-patient cost that was almost as high as air transfers.
The way Ornge reports its response times made it difficult to tell how well it was serving patients.
Frequent problems with how Ornge aircraft was dispatched.
Ontario Health Minister Deb Matthews issued a statement Wednesday saying the province will act on all of McCarter's recommendations.
ORNGE: Web of questionable financial deals at air ambulance service uncovered by Auditor General
Published 1 hour 2 minutes ago
Article
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Ontario Minister of Health Deb Matthews says her government will heed all recommendations from the province's auditor general concerning the troubled ORNGE Air Ambulance service.
Ontario Minister of Health Deb Matthews says her government will heed all recommendations from the province's auditor general concerning the troubled ORNGE Air Ambulance service.
Pawel Dwulit/THE CANADIAN PRESS
Rob Ferguson, Tanya Talaga and Kevin Donovan Queen’s Park Bureau
A larger web of questionable financial deals has been uncovered at the troubled ORNGE air ambulance service, including wasting millions of tax dollars and paying one board member a $200,000 retainer.
Ontario Auditor General Jim McCarter detailed the troublesome practices and a lack of health ministry oversight Wednesday in a long-awaited 39-page report that comes as an Ontario Provincial Police investigation continues into ORNGE.
“ORNGE is a textbook example of what happens when the government doesn’t get the information it needs to do its job,” he told a news conference.
He raised the question of what has happened to about $9 million in profits after the posh ORNGE headquarters nicknamed the “Crystal Palace” was purchased for $15 million by an air ambulance subsidiary, then leased back to ORNGE with a rent 40 per cent above market rates and used as collateral to borrow $24 million.
“Where is that money?” he said of the $9 million difference between the purchase price and the amount borrowed, which went to another ORNGE subsidiary owned by management and the board, not taxpayers.
“I think that’s something the OPP is looking in to.”
This is one of many transactions that “didn’t pass the old smell test,” McCarter added.
When asked why no one at the health ministry noticed such irregularities, the auditor replied: “good question,” calling the myriad of ORNGE subsidiaries a “mini-conglomerate” that was hard to trace.
“I don’t think we got them all,” McCarter said, adding that getting information from ORNGE and its corporate offshoots for his audit was “like pulling teeth.”
The air ambulance service has been given $700 million by taxpayers and raised almost $300 million in private financing since being formed in 2006, with some of the money going for more aircraft than it needed.
In another troublesome example, ORNGE paid $28 million for 11 “used and aging” helicopters —some over two decades old — until new ones were delivered, arguing it was cheaper than renting.
Apparently not.
“At the time of our audit, ORNGE was in the process of disposing the 11 used helicopters for what was expected to be less than $8 million,” McCarter wrote in the report, which was underway before the air ambulance service became a full-blown political scandal.
Taxpayer funding of ORNGE — now at $150 million annually — has also risen 20 per cent over the last few years while the number of patients transported has fallen by 6 per cent.
McCarter faulted the health ministry for missing a number of signals that problems were brewing and for “performance agreements” with ORNGE that did not allow the government to claw back unspent air ambulance funding and allowed the service to borrow money without government permission.
Other problems found by McCarter include reports submitted on the differences between planned and actual expenses at ORNGE that “in most cases lacked detailed explanations.”
Weak performance agreements did not require detailed breakdowns of results from the complex web or ORNGE subsidiaries, leaving the health ministry in the dark in tracing transactions.
Health Minister Deb Matthews, who has been under fire for weeks in the Legislature, said she’ll take action on all the recommendations being made by the auditor general to repair transparency and accountability at ORNGE.
Matthews said the government put in place a new “performance agreement” with ORNGE this week that boosts powers to audit, inspect and verify financial information coming from the agency.
Along with new legislation to come later Wednesday, the performance agreement “will give us the powers we need to safeguard patient care, stop future abuses and get better value for our air ambulance dollars.”
Among the troubles uncovered at ORNGE, deposed chief executive officer Dr. Chris Mazza was being paid a salary of $1.4 million a year, air ambulance helicopters were purchased for $144 million from Italian company Agusta Westland but had little overhead room for paramedics to properly administer CPR to patients, and Agusta paid ORNGE $6.7 million for questionable “marketing services.”
As well, Mazza received loans from ORNGE to purchase a stately home in Etobicoke.
The financial irregularities prompted Matthews to call in a forensic audit team from the finance ministry, and later turned the case over to Ontario Provincial Police for investigation.
Ron McKerlie, the interim CEO of ORNGE, welcome the amended performance agreement with the province.
“This amended performance agreement is a key step toward ensuring the people of Ontario have confidence in the vital, life-saving service provided by our frontline crews every day,” said McKerlie.
Some of the provisions in the performance agreement includes tying ORNGE’s funding to key indicators and public reporting of expenses.
“As we embark upon this renewed and improved relationship, we welcome the new transparency provisions, which will ensure past mistakes are not repeated,” said McKerlie.
My take on all of this is it looks like a HUGE TRAGIC MESS.
To all of you who are working through this, thank you. I hope it works out and everyone one the front line doing what they can to save lives ..... get to keep your jobs. It can't be fun to go to work with this huge cloud over your heads, and your futures and careers in doubt everyday.
Ontario question period halted as tempers flare over ORNGE
Published 29 minutes ago
Health Minister Deb Matthews was under heavy fire by the Opposition on Thursday in the Legislature over the ORNGE scandal.
Tanya Talaga/Toronto Star
Rob Ferguson Queen’s Park Bureau
Question period was temporarily halted amid pandemonium in the Ontario Legislature on Thursday as opposition MPPs repeatedly slammed their desks and shouted “resign” at Health Minister Deb Matthews.
Furious at her handling of the ORNGE air ambulance scandal in the wake of a scathing report by Auditor General Jim McCarter, the Progressive Conservatives and New Democrats increased the pressure on Matthews to step down.
Matthews ignored repeated warnings of troubles brewing at ORNGE for over a year, such as a sale and leaseback of its headquarters that produced $9 million in “profit” for an ORNGE subsidiary owned by executives and board members, said NDP Leader Andrea Horwath.
“This minister had a heck of a lot of information available and did nothing about it,” Horwath charged before the daily question session was halted after 24 minutes.
“What exactly did the minister do for that year . . . why does she think she should keep her job?”
Conservative MPP Frank Klees, who has led his party’s charge on questionable financial dealings at the air ambulance service, raised the possibility of similar trouble at other government agencies given the Liberal government’s poor record of oversight of the ambulance service and eHealth Ontario, the subject of a spending scandal three years ago.
“How many other ORNGEs are there?” Klees asked.
Matthews, who was left to fend for herself in the Legislature with Premier Dalton McGuinty absent, said she has put a new performance agreement in place to tighten the leash on ORNGE and has introduced legislation to gain increased powers over the agency.
“The actions we have taken have met with the recommendation of the auditor,” Matthews said, receiving a couple of standing ovations from Liberal MPPs.
Question period resumed after the halt once temperatures had cooled down, although Speaker Dave Levac still had to rise and restore order several times.
ATAC urges Premier McGuinty to review Ornge's mandate, sell off its fleet, and turn to the private sector carriers to once again provide quality air ambulance services.
The Auditor General of Ontario's Special Report on Ornge Air Ambulance and Related Services, released on March 21, 2012, clearly points out abuses of public funds, intentional lack of transparency and reduced performance since Ornge has gone from ensuring the provision of air ambulance services through the use of private sector air carriers to delivering those services itself at great cost. In addition to the abusive use of public funds, Ornge has taken away an important source of revenue from competitive private sector Ontario regional air carriers who provide vital air links to remote Ontario communities.
ATAC urges Premier McGuinty to review Ornge's mandate, sell off its fleet, and turn to the private sector carriers to once again provide quality air ambulance services.
Geee, I sure wish I'd thought of that! Wait a minute! They're playing MY song!
