Health Minister Adriana LaGrange is alleging the former CEO of Alberta Health Services was unwilling and unable to implement the government’s plan to break up the health authority, became “infatuated” with her internal investigation into private surgical contracts and made “incendiary and inaccurate allegations about political intrigue and impropriety” before she was fired in January.
The claims are contained in the minister’s statement of defence filed Thursday in Edmonton Court of King’s Bench.
Smith has said she had no involvement in the contracting decisions.
Mentzelopoulos’s allegations, the state of defence claims, were made to deflect attention from concerns about her own performance and professionalism.
The document also says Mentzelopoulos made her claims in an attempt to get a larger payout for being fired.
Mentzelopoulos said she was fired in January, days before she was set to meet with Alberta’s auditor general about surgical contracts she said had links to government officials.
She alleges she was terminated, in part, because she had launched an investigation and forensic audit and was taking a second look at the prices in contracts involving the Alberta Surgical Group before extending the agreement.
Mentzelopoulos also widened the AHS investigations to include AHS procurement with medical supply company MHCare. The company won a $70 million contract in 2022 to import children’s pain medication from Turkey. Most of the product has not been used.
LaGrange, in the statement of defence, said the suggestion Mentzelopoulos was fired to prevent her from speaking with the auditor general is false. The document states the province supports the auditor general investigation that’s now underway.
“The plaintiff was not fired by AHS because she commenced an investigation. She was not fired as part of a conspiracy to stop an investigation,” the document states.
“She was fired because she failed to perform her role as president and CEO effectively and failed to carry out the mandate she was given to implement the transformation of AHS, which the premier of Alberta mandated the minister to implement.
“The plaintiff lost the confidence of AHS and the minister.”
In an emailed response to CBC News, Dan Scott, lawyer for Mentzelopoulos, said the allegations in the statement of defence are false. He said his client was terminated without cause.
Scott said Mentzelopoulos is looking forward to filing her reply to the statement of defence, and in a statement issued earlier Thursday, Mentzelopoulos said she is comfortable moving quickly to trial.
“I am worried there’s a strategy to try to bring me to my knees financially, so I hope we can skip oral questions and proceed directly to trial,” she said.
The allegations in Mentzelopoulos’s statement of claim and LaGrange’s statement of defence have not been tested in court.
Allegations of deliberate delays
The 23-page statement of defence alleges that as CEO, Mentzelopoulos was trying to delay the government’s move to break AHS into four separate divisions covering acute care, continuing care, primary care and mental health and addictions to “protect her own personal authority and status.”
The document outlines what it says is the timeline of orthopedic surgery services in Edmonton, beginning with a July 2021 request for proposal. It says the Alberta Surgical Group (ASG) was not the successful proponent.
However, the winning proponent didn’t have a building ready, but ASG did, so AHS signed a two-year contract with them.
The costs per procedure, which Mentzelopoulos was later concerned were too high, were due to the shorter length of the contract, the document says.
By August 2024, the winning proponent still wasn’t ready, so the province wanted to extend the contract with ASG. The document states that instead of engaging in talks to extend the contract past Oct. 31, Mentzelopoulos launched an investigation into the terms of the deal, including the prices she believed were out of line with contracts signed with other providers.
Preliminary results from that review by external investigators did not uncover a reason not to extend the ASG contract past Oct. 31, the document states, but Mentzelopoulos didn’t share those findings with the government.
The statement of defence alleges that Mentzelopoulos “refused to move forward with any substantive negotiations with ASG, jeopardizing the thousands of surgeries booked.” The province says that is why it was forced to intervene.
Mentzelopoulos finally signed off on the extension at 3 p.m. the day the original contract expired, the document states.
Mentzelopoulos alleged in her statement of claim that LaGrange told her in December to wrap up her investigation. In response, LaGrange said the former CEO was told to transfer the investigation to the province. That investigation continued after Mentzelopoulos’s departure, the document states. The appointment of retired Manitoba judge Raymond E. Wyant announced last week, is part of that effort.
LaGrange rejects Mentzelopoulos’s claim that the date of her termination was tied to her meeting with the auditor general the day after. The statement of defence says the decision to fire her came on Dec. 23, but was delayed due to the Christmas holidays.
The document also denies Danielle Smith’s former chief of staff Marshall Smith was putting pressure on Mentzelopoulos about extending the ASG contract and signing off on a surgical contract for Red Deer.
The document disputes Mentzelopoulos’s claim that Marshall Smith had close ties with a top official in AHS’s procurement department who also had close ties with major contractors the health agency dealt with.
The province is asking that Mentzelopoulos’s suit be “dismissed with costs on a solicitor and client basis in light of the incendiary allegations made.”
Justice Minister Mickey Amery said in a statement that since the matter is before the courts, the province would not be providing further comment and added “we will resolutely defend against the unproven allegations raised in this matter.”
