Ornge

In 2011 Ornge was involved in a controversy regarding executives' compensation, including President and CEO Chris Mazza. The Toronto Star uncovered that Mazza was receiving $1.4 million a year while remaining off the "sunshine list" of public employees earning over $100,000. That salary made him the highest publicly paid official in the province. Ontario Health Minister Deb Matthews stated that Mazza’s salary was "outrageous, shocking and unacceptable". On 9 February 2013 Dr. Chris Mazza received $4.6 million in public dollars in his last two years at Ornge, including salary, bonuses, cash advances and two housing loans. In 2013, it was revealed that Mazza made $9.3 million over six years at Ornge.[17][18] Mazza expensed ski trips and international junkets, often with his girlfriend; hotel room bills of $2,400 were reported.[19]

Other executives were "highly paid", but Ornge failed to disclose their salaries. Chairman Rainer Beltzner received $232,757 in 2011.[18] The board members received almost $2 million between 2007 and 2011.[18] In 2011, 50 executives received a total of $11.8 million (average $238,000) which was not disclosed on the Sunshine list.[18]

Executives were granted company-paid executive MBAs education, at a total of $600,000. Kelly Long, Mazza’s girlfriend[18] and an ORNGE vice-president, received an MBA from Western University in London.[19]

Mazza went on an indefinite medical leave on 22 December 2011 at the height of the scandal.

After Ornge bought helicopters from AgustaWestland for $144 million, AgustaWestland then made a $4.7 million payment to Mazza-controlled ORNGE Global. A later additional payment of $2 million was promised. Allegedly, the payment was for “marketing services”. It was found that this "consisted of a small binder of information pulled together by Long."[19] Subsequent Ornge leader Ron McKerlie said the two small binders do not justify the large payment. The binders are said to be in the possession of the OPP.[20]

Later, a former executive indicated that Ornge had paid AgustaWestland $7 million more than should have. It was this allegation that prompted the OPP investigation.[19] Tom Rothfels indicated that Mazza insisted on paying about $600,000 extra per helicopter (roughly $7 million).[21] Rick Potter, former COO, indicated about $10 million extra.[21]

AgustaWestand also agreed to donate $2.9 million US to Ornge's charitable foundation.[22]

Ornge paid $28 million for 11 used helicopters, believing this to be cheaper than renting. The fleet was subsequently sold for less than $8 million.[23]

Ornge purchased 12 helicopters from AgustaWestland, although only 9 were required.[22] Two of the units were not equipped to carry patients; these were sold in 2013.[22] The remaining 10 were found to have a poor cabin layout which made CPR difficult.[22] In 2015, Ornge was looking at replacing the AW139s, citing complexity and fuel consumption concerns.[22]

Ornge purchased 10 Pilatus PC-12 airplanes, although only 6 were needed.[22] Two of the 10 were for sale in 2015.[22]

The auditor general noted that "an open public competitive tender was not used" and Ornge over-bought.[21]

Ornge planned a "Transport Medicine Centre of Excellence" in Hamilton.[24] Ornge spent approximately $600,000 leasing hangar space that went unused, due to construction delays.[25] Approximately $1.9 million was spent on hangar renovations.[26] The move from Toronto to Hamilton was later cancelled.[27]

Questions arose about the decision to open a base in Oshawa. Rick Potter, aviation chief (COO Ornge Air), stated the site doesn’t have an instrument landing system, has many noise complaints and was not one he would recommend.[28][29] Hangar space was purchased in 2011, then subsequently sold for a $130,000 loss when plans were cancelled in 2013.[29]

Ornge purchased lifting devices, dubbed Ornge pickers, that were to lift patients into aircraft. The devices never worked.[30] There were also issues with the de-icing system for the AW139s, which never worked.[30] The company also apparently spent on orange painted tractors to move aircraft.[31]

Various cases of delays in moving patients were revealed. It was found that dispatch operators were under pressure to cut costs by reducing helicopter launches. A policy existed that a helicopter would not be dispatched until a land ambulance had confirmed the need.[32] The policy was changed in 2012 to immediate launch when the 911 centre requests it.[31]

It was reported that the helicopter based in Thunder Bay was unable to fly about one quarter of the time due to lack of paramedics. The Star found the helicopter grounded 237 times for a total of 1300 hours over 10 months. “It’s also a waste of public money. You have a helicopter and two pilots sitting there unable to do their jobs,” stated a paramedic union leader.[33][34][35]

Critics charged that Ornge had created a "web"[23][18] of companies. The auditor general found at least 14[36](20 by another source)[37][18] different corporate entities, among them JSmarts, Ornge Peel (later Ornge Global), Ornge Global Real Estate, Ornge Global Holdings LP, Ornge Issuer Trust, Ornge Global Air, Ornge Global Management and Orgeco.[36][38] Some of these companies were for-profit. The auditor general was denied access to financial records, given some of the entities are privately held.[36] The structure was described as a "complicated network".[36] "In fact, much of Ornge’s operation is being delivered by these other entities, which bill Ornge for those services."[36]

Auditor General Jim McCarter described Ornge as a "mini-conglomerate" and believed the audit might not have found all the corporate offshoots.[23]

It was found that taxpayer dollars had flowed to for-profit Ornge companies.[37]

Some of the companies were owned by Chris Mazza, other executives, and board members.[37][18]

The building for Ornge’s head office was bought for $15 million, using borrowed money. Ornge then created a complex deal with other Ornge companies to sell the building and lease it back to itself.[37][36] An independent real-estate appraiser estimated that Ornge’s rent was 40% higher than the fair-market rent.[37][23] This amounted to a $2 million overpayment in five years. This allowed Ornge Global Real Estate to obtain $24 million in financing. The "extra" $9 million flowed to another company, Ornge Global Holdings LP.[37][23] The OPP was to look into the missing $9 million.[23] Auditor General Jim McCarter said this deal was one of several that did not "pass the old smell test".[23] Ornge's 25-year lease agreement was unusually long.[36]

The building itself was dubbed the "Crystal Palace" for its opulence and recreational facilities. Nearly $500,000 was spent on renovations. Ornge also apparently paid to renovate its previous office space, then paid $760,000 extra to break the lease early.[39][40][23]

From 2005 to 2012, Ornge paid “well connected” law firm Fasken Martineau over $9 million in legal fees for 22,000 hours of work, including organizing the for-profit companies.[41] Other law firms received a further $2 million. Much of the money was spent creating the “web” of companies.

Alf Apps, former president of the Liberal Party national organization, was a Fasken lawyer. Apps boasted of the success of the deal structure.[42] Integrity Commissioner Lynn Morrison indicated she believed Apps had lobbied the government without registering.[43] Apps denied the allegation in testimony before legislative committee. Apps resigned from FM in Feb 2012, moving to another firm.[44]

Don Guy, chair of three campaigns for Dalton McGuinty, billed FM over $100,000 in legal fees.[41]

Lynne Golding, a Fasken partner (married to Tony Clement[43]), helped craft the 2005 performance agreement. She testified that she thought the agreement gave the government strong powers over Ornge, contradicting minister Deb Mathews.[41] Guy Giorno, a Fasken lawyer and ex chief of staff to Mike Harris and Stephen Harper, advised Ornge on compliance and disclosure.[44][41]

Ornge Global, Ornge's for-profit division, also received $6.7 million in a contract from Anglo-Italian helicopter manufacturer AgustaWestland, which is also part of the audit by the provincial auditor general.[45] Ron McKerlie, who was at the time Deputy Minister for the Ministry of Government Services, Associate Secretary of Cabinet and Secretary of Management Board of Cabinet for the Government of Ontario, was appointed as the Interim President and CEO.[46]

As the scandal spread on 24 January 2012 Ornge fired 18 managers and closed the J Smarts charity program. The next day a new board of directors was named, including former provincial cabinet minister Charles Harnick. A complete forensic audit was also started. On 2 February 2012 Ornge President and CEO Chris Mazza was fired without compensation, as was the chief operating officer of ORNGE Global, Maria Renzella. ORNGE Global GP Inc. and ORNGE Global Holdings LP were placed in bankruptcy under the oversight of a trustee. The bankruptcy move does not affect the provincial air ambulance service, which is operated separately.[47][48][49]

On 2 February 2012, the Ontario Health Minister Deb Mathews stated, "Today, the for-profit ORNGE Global GP Inc. and ORNGE Global Holdings LP went into receivership, essentially ending their existence. As a result, Dr. Chris Mazza, president and CEO, and Maria Renzella, chief operating officer, have been terminated and ORNGE has advised us that no severance has been offered. These are vitally important and necessary steps needed to restore the confidence of Ontarians in the leadership team responsible for Ontario’s air ambulance service. The forensic audit continues and we look forward to their findings and the auditor general’s value-for-money audit. We continue to seek and support the changes at ORNGE and continue to work with the new leadership as they strengthen Ontario’s air ambulance service."[49]

On 16 February 2012 Ornge became the subject of an Ontario Provincial Police investigation for "financial irregularities". Neither the police, Mathews nor Ornge would provide details about the nature of the investigation. The minister indicated it was as a result of the preliminary findings of the forensic auditors in examining the organization's financial records. Aside from the police investigation there are two other investigations underway. The Ministry of Health's emergency health services branch is carrying out an investigation of 13 incidents related to air ambulance operations, three of which involve the deaths of patients. Also provincial Auditor General Jim McCarter is investigating Ornge and will present his final report in March 2012.[50]

On 17 February 2012, amidst calls for her resignation from the opposition, Ontario Health Minister, Deb Mathews announced that the government would greatly tighten control over Ornge, including new legislation and a new performance agreement to increase oversight and limit what it can do without government approval, including preventing the sale of assets, such as helicopters and the taking on of debt.[50]

On 23 February 2012 allegations surfaced of unqualified staff running the air ambulance service and of a questionable $14,000 payout to a Brazilian law firm by an Ornge spin-off company. More information became available about the nature of the OPP investigation, including that the subject is alleged kick-back payments for helicopter purchases as well as interest-free loans and cash advances from Ornge to Mazza. Filed bankruptcy documents indicate that Mazza is a creditor of one of Ornge's now-defunct for-profit companies and that he is owed $1 in the proceedings. The opposition continued calls for the minister's resignation as news of medevac operation disruptions in recent weeks surfaced.[51]

On 21 March 2012 provincial Auditor General Jim McCarter released a report that heavily criticized the provincial government for lack of oversight of Ornge's operations. The report details that the government paid Ornge C$700 million over five years and that Ornge also borrowed an additional C$300 million for aircraft purchases. The report details how air ambulance costs increased 20% while transporting 6% fewer patients. McCarter reported how Ornge, "soon begame a mini-conglomerate" with virtually no government supervision. He stated, "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 its board of directors. To the nose of this watchdog, this didn't pass the smell test." The report also details how Ornge bought more aircraft than it needed with government money with the aim of renting them out. Health Minister Deb Matthews said that the province will act on all of McCarter's recommendations.[52]

The police investigation continues.[53]

In February 2017, the OPP stated that the five year long kickback investigation was close to completion, but would not say whether charges will be laid.[19]

Allegations were made that whistleblowers were harassed or fired. Lisa Kirbie, hired in March 2010 as the director of government and regulatory affairs, alleged in a lawsuit that Mazza was volatile and sexist, firing her without cause after she co-operated with the auditor and police probes.[54] Kirbie was the partner of Liberal strategist Warren Kinsella.[55]

Bruce Wade, a Thunder Bay helicopter pilot, was suspended with pay after testifying at a Queen's Park committee.[56]

Opposition critics charged that the governing Liberals tried to intimidate whistleblowers during legislative committee testimony. Former paramedic Trevor Kidd was asked to disclose the names of other workers who had information about problems at Ornge. Kidd had testified that he quit Ornge in 2009 after the death of a patient. Kidd’s father, the mayor of Temiskaming Shores, discussed Ornge's problems with former Liberal MPP David Ramsay in 2009.[57][58]

Ornge belatedly announced whistleblower protection in 2013.[59]

Ornge commissioned two custom-built Orange County Choppers, allegedly gifts from Agusta, one of which was prominently displayed in the company's lobby. Mazza had posed at a Toronto Blue Jays game with the bike. The "chopper" became a focus of critics after the scandal was discovered. “That chopper is simply a reflection of how business was done. There are still a lot of people, let alone the chopper, in those offices who should not be there,” noted PC MPP Frank Klees.[60] The bike, valued at $50,000, was eventually auctioned for $30,000. The second bike, valued at $100,000 is thought to be owned by Agusta. The Ornge charity JSmarts also owned a $50,000 speed boat.[61][62]

Critics noted the rapid ("meteoric"[63]) rise of girlfriend[63][18] Kelly Long to corporate power. A former water-ski instructor,[64][18] she had apparently met Mazza while she worked as an account manager at a water-ski club.[63] Pathway Group, a consulting firm used by Ornge, was asked by Mazza to hire Long.[63] Pathway did so in January 2006 as a "favour".[63] At Pathway she organized golf tournaments and did administrative work from home.[63] Mazza was unsatisfied with the work assignments Long was given. He had her seconded to Ornge in September 2006.[63] Pathway was paid nearly $9000 per month for this.[63] Long was then hired by Ornge in December 2006.[63] After that, she received a rapid set of four promotions between the various Ornge companies, rising to associate vice-president by 2012. Her salary had doubled during this time to $120000.[63][64]

Long defended herself in testimony at a legislative hearing. She stated she felt had done a great job for Ornge and was qualified with a BA. She stated: "The media is insinuating I rose quickly because of my relationship ... with Dr. Mazza.”[65]

Carrie Anne Brunet was a junior Ornge executive who is the daughter of former chairman Rainer Beltzner.[66] She assisted Long with the Agusta research.[20] Beltzner would claim Brunet got the job via a newspaper ad.[67]

Both Brunet and Long benefited from the MBA program. (Brunet graduating in 2012).[20]

Hallie Beecher McClelland, the daughter of HR vice-president Rhoda Beecher, became the executive director of Ornge's foundation.[66] Beecher defended the hiring process as "rigorous".[68]

The Transportation Safety Board of Canada investigated the accident. The report noted: "The causes of this accident went well beyond the actions of this flight crew."[73] The pilots had not received sufficient training. The company lacked standard operating procedures to deal with night operations. The company lacked resources and key personnel were inexperienced. Crew pairing was deemed "sub-optimal" for that flight. Some pilots were given inadequate time to prepare for training; the training did not meet company SOPs and was not operationally realistic.[73] It was noted that in 2012, Ornge eliminated the pilot manager positions at each base, switching to a centralized scheduling system. Knowledge of local conditions and familiarity with crews was therefore lost.[73]

Ornge was understaffed at the time of the accident. The Operations Manager and the Chief Pilot were new to the management of Emergency Medical Services operations. Key positions, such as Manager of Rotor Wing Flight Safety, Manager of Rotor Wing Flight Training and Standards, his assistant, and an aviation clerk (who was to track records) were vacant.[73]

Transport Canada was aware that Ornge was struggling to meet regulations and company requirements. There were clear indications of Ornge's problems months before the accident.[73]

TSB chair Kathy Fox said "[Ornge's] willingness to operate safely and within regulatory requirements exceeded its capacity to do so."[74]

On 29 May 2014 Ornge was charged with 17 offences under the Canadian Labour Code. Court documents disclosed that the charges included permitting pilots to fly the S-76A helicopter "without adequate training in the operation of that specific aircraft," failure to provide the pilots with "a means to enable them to maintain visual reference while operating at night", that the aircraft captain, Donald Mark Filliter had "insufficient experience in night operations", that his pilot proficiency check in the helicopter was incomplete, plus the two pilots did not meet experience requirements to be flying as a crew. The organization was also charged with failure to ensure employee safety resulting in the death of the two pilots and also failure to ensure that the organization's supervisors and managers had sufficient knowledge of the Canada Labour Code. In October 2013, company officials had been warned by the Moosonee base safety officer that inexperienced pilots and night operations in combination was a high risk for a fatal accident.[75]

The trial began at Brampton court in April 2017.[76]

In court testimony, a check pilot noted he felt Captain Filliter "didn’t have the necessary technical knowledge to serve as a crew captain".[77]

In November 2017, the court found Ornge not guilty of negligence. The judge noted that while night-vision goggles and ground proximity alarms were available, they were not required under 2013 rules.[78]

In a 2016 lawsuit, Christopher Snowball's family is seeking $3.7 million from Ornge, Transport Canada and two unnamed Transport Canada inspectors.[79]

In 2014, the helipad at Health Sciences North in Greater Sudbury was dedicated to the crash victims.[80]

After the accident, Ornge suspended night operations at 58 remote helipads (73 locations by another source). These locations are marked by reflective cones rather than lighting. Service was expected to resume as pilots were trained for un-lit sites or helipads had lighting upgrades.[81][82] However, in early 2015, there were reports that Ornge was still unable to land at some sites, despite helipad upgrades.[83] Ornge now has a "currency" requirement for night landings, that one of the two pilots must have landed at the helipad during the previous six months. It appears that Ornge might not have communicated this with local authorities.[84]

AgustaWestland AW139 located at:

• Billy Bishop Toronto City Airport (2)
• Ottawa International Airport (1)
• Sudbury Airport (1)
• London International Airport (1)
• Kenora Airport (1)
• Thunder Bay Airport (1)
• Moosonee Airport (1)

From the first long weekend of the summer to Labour Day, one Toronto crew was relocated and based out of Muskoka Airport for the increased number of trauma calls in cottage country during this period.[88] This practice stopped after the summer of 2010.

As of the end of 2009, Ornge has begun operating its own fleet of Pilatus PC-12NG fixed-wing aircraft from its bases in:

• Thunder Bay[89]
• Sioux Lookout[90]
• Timmins[91]

ORNGE operates three land transfer bases and 18 Crestline Coach Type III ambulances in Ontario

• Markham Base (Shields Court just north of Toronto and south of Buttovillle Airport)[92] - both Critical Care and the Ted Rogers Pediatric Transport teams
• Ottawa Base (2094 Alert Rd, Ottawa International Airport)[93]
• Peterborough Base[94]
• Chatham-Kent Base[95]

Additional aircraft are available under the Standing Agreement (as and when required) contract with other operators:

• Canadian Flyers International operating a Piper PA-31-350 Chieftain from the Toronto/Buttonville Municipal Airport and Piper PA-31 Navajo from Dryden, Ontario
• Wabusk Air operating a Beechcraft A100 King Air from Moosonee Airport
• Thunder Airlines - Beechcraft A100 King Air; Cessna 208B Grand Caravan; and Mitsubishi MU-2 from Thunder Bay International Airport, Sudbury Airport and Timmins/Victor M. Power Airport
• Flightexec at Toronto/Buttonville Municipal Airport and London International Airport
• SkyCare Air Ambulance operating two Fairchild Swearingen Metroliner aircraft at Sioux Lookout Airport.
• Air Bravo operating Pilatus PC-12 aircraft out of Timmins, Sioux Lookout, Elliot Lake and Lake Simcoe Regional Airport.

In February 2015 reports surfaced that Ornge may look to sell its AW139 fleet due to maintenance costs and their unsuitability for ambulance work. Two PC12 are considered surplus to requirements and are for sale. “[The AW139] burns a lot of fuel. It’s a big airplane. It is costly to maintain because of the complexity of the machine, more costly than say a simpler machine ... the AW139s are more suited to flying to offshore oil platforms and that few other agencies use them in an air ambulance role," according to CEO Dr. Andrew McCallum. Two of the AW139 units purchased were equipped with 12 seats and were unsuitable for ambulance use. These units were sold in 2013.[22]