Alberta Health Services (AHS) has been in the spotlight ever since Danielle Smith became Premier of Alberta in October 2022.
Smith’s supporters argue that she inherited a “broken and bloated” agency and had no choice but to make significant changes. In just over two years, she has hired and fired four AHS CEOs and is now on her fifth. She has also dismissed the AHS board twice.
Smith has restructured AHS into four sectors to take over the healthcare management role that AHS had held as a single entity. The four separate agencies include acute care, primary care, long-term and continuing care, and mental health and addictions. AHS remains the manager of Alberta’s 106 government-owned hospitals.
Beyond the controversial restructuring of AHS, allegations of corruption have recently surfaced regarding how government contracts are awarded for providing services to AHS.
Allegations of Corruption
According to reports, Smith’s staff allegedly pressured health officials to approve over half a billion dollars in private healthcare contracts for businessman Sam Mraiche and his company, MHCare Medical. In return, Mraiche reportedly treated these officials to luxury NHL box seats. When AHS CEO Athana Mentzelopoulos and the board attempted to investigate the alleged corruption, Smith fired them.
Mentzelopoulos claims she was dismissed for launching an investigation into questionable procurement deals—including the so-called “Turkish Tylenol scandal”—and private surgical contracts linked to influential government staffers.
Mentzelopoulos said she faced pressure from various government officials, including Marshall Smith (no relation to Premier Smith), the premier’s former chief of staff, when deciding on contracts with private clinics where the province pays for surgery.
Her allegations were outlined in a letter to AHS’s lawyer, in which she threatened a $1.7-million wrongful dismissal lawsuit. The Globe and Mail has obtained and reported on this letter.
The AHS board was so concerned about the situation that it recommended referring the matter to the RCMP for a criminal investigation. Mentzelopoulos was fired just two days before she was scheduled to meet with Auditor General Doug Wylie to discuss her concerns.
The controversy has drawn significant political backlash. NDP Leader Naheed Nenshi has called for four separate investigations—by the Auditor General, the RCMP, the ethics commissioner, and a judge-led public inquiry.
At a news conference, Nenshi stated: “The premier, the minister of health, the minister of mental health and addiction, and all named employees in these allegations must step aside. They cannot operate in this role while they are under the shadow of potential RCMP criminal investigation.”
Smith’s Reaction?
The Auditor General, Doug Wylie, announced on February 6 that he would investigate the alleged conflicts of interest.
On February 8, Danielle Smith held a press conference to answer questions about the allegations. Smith said she would ask the auditor general for an expedited review, saying, “We need to get to the bottom of this issue quickly to identify any potential wrongdoing, correct it, and address it appropriately.”
The auditor general’s probe is focused on contracts for chartered surgical facilities, the controversial $75-million deal to buy children’s pain medication from Turkey-based Atabay Pharmaceuticals, and controversial COVID-19 personal protection equipment (PPE) purchases.
In her February 8 press conference, Smith said she had followed news about the investigation and found the allegations troubling. “As premier, I was not involved in any wrongdoing.”
Duane Bratt, a political scientist at Mount Royal University in Calgary, said that the premier looked to be taking the situation seriously but that some questions remain unanswered, such as why Mentzelopoulos was fired after just signing a contract in December 2023 and why the AHS board — whose members Smith’s government appointed — was dismissed.
“There are, clearly, a lot of ethics questions and there’s a lot of smoke. We’ll have to see if there’s any fire,” Bratt said in an interview with the CBC.
“Danielle Smith promised to fix health care in 90 days,” Naheed Nenshi said in a statement. “That was 810 days ago, and all we’ve seen is a system on the verge of collapse, more new managers for them to blame, and worse patient outcomes.”
“Smith and LaGrange keep looking for people to blame for this disaster,” he concluded, adding that it’s “time for them to look in the mirror.”
Meanwhile, Smith has put the controversy behind her, focusing on dealing with potential Trump tariffs instead.
