Calls for Public Probe Grow Louder from Alberta NDP

With every new revelation in what the Alberta NDP have dubbed the “CorruptCare” scandal, the chorus calling for a public inquiry, and RCMP investigation, grows louder.

On Friday, the NDP again called for an inquiry after The Tyee reported Edmonton businessman Sam Mraiche, a central figure in the scandal, made a $300,000 profit on a property he bought and sold to Alberta Infrastructure within three months in the spring of 2024.

Alberta Infrastructure Minister Peter Guthrie said he first learned about the transaction on Tuesday. He said he has referred the matter to Alberta’s auditor general and he has ordered an internal investigation.

Guthrie has said he accepted a free luxury suite ticket to an Edmonton Oilers NHL playoff game from Mraiche.

On Feb. 14, as first reported by CBC, Guthrie internally called for Alberta Health Minister Adriana LaGrange to step down amid serious allegations contained in the wrongful dismissal lawsuit of former Alberta Health Services CEO Athana Mentzelopoulos.

Mentzelopoulos alleged she was fired two days before she was to meet with Alberta’s auditor general to provide information about internal investigations she had ordered. The investigations were into contracts with chartered surgical facilities and a deal in which the government wasted tens of millions of dollars in a $70-million contract to import children’s pain medication from Turkey.

Mraiche’s medical supply company, MHCare Medical, received more than $600 million in government contracts, she alleged, and she said she had expanded the internal investigation to look at the business relationship between Alberta Health Services and MHCare.

Mentzelopoulos also alleged she was politically pressured by multiple government officials, including Premier Danielle Smith’s chief of staff, Marshall Smith (no relation), to extend a contract to Alberta Surgical Group, even though it wasn’t performing the number of specified surgeries and its billings were projected to exceed its contract by nearly $3.5 million.

Mraiche facilitated the Turkish deal, and the Globe and Mail reported on Friday that he owns 25 per cent of the voting shares in Alberta Surgical Group. The Globe also reported that Alberta Health Services, or AHS, has been paying chartered surgical facilities, including Alberta Surgical Group, double the normal fee for some orthopedic surgeries. Alberta Surgical Group has disputed those figures.

‘Not just an AHS issue’

In a news release, Alberta NDP MLA Christina Gray said The Tyee’s story widens the scope of the scandal.

“We are not dealing with just an AHS issue; the concerns raised are government-wide,” said Gray, the official leader of the Opposition.

“Instead of being an ethical and competent government, the premier and the UCP [United Conservative Party] are mired in corruption allegations that suggest they were using government funds and powers to enrich their friends.”

Guthrie has so far refused to answer questions about the transaction from The Tyee, such as why the government bought the property in north-central Edmonton.

In his initial response to The Tyee, Guthrie said he had no personal or professional relationship with Mraiche. But he has not explained why Mraiche would host him in a luxury suite at an NHL playoff game.

“Albertans deserve to know if anyone in the government had connections to the firm that flipped this land so quickly for a big gain,” Gray said. “A firm that appears to have connections to those involved in the Health Ministry allegations as well.”

Mraiche is not named in the lawsuit by Mentzelopoulos. He has denied any wrongdoing, as have the other owners of Alberta Surgical Group. The allegations contained in the lawsuit are unproven and no statement of defence has been filed.

Explanation offered to Edmonton Journal

Mraiche has not responded to several requests for comment from The Tyee before and after publication of its story.

In a statement to the Edmonton Journal, a spokesperson for Mraiche’s numbered company said it bought the property for a client at slightly below market value. It said it was drawn to the property because it leased parking space to a provincially owned building next to the property.

The client subsequently decided against developing the property because it was too small. Mraiche’s numbered company then sold it to Alberta Infrastructure — at its behest.

The Journal said Mraiche’s numbered company provided it with another offer from a private developer who wanted to purchase the land for $1.95 million.

“This was a very traditional real estate transaction that did not involve any communication with senior levels of government to request or facilitate,” according to the statement reported by the Journal.

In Guthrie’s initial statement to The Tyee, he said the ministry has had the authority to make such purchases without the minister’s approval since December 2015. That date is noteworthy because the Alberta NDP were then in power.

But in March 2024, Guthrie introduced the Real Property Governance Act, which was supposed to centralize the management and sale of all government property. Guthrie said the legislation would not only streamline the disposal of government-owned land but potentially make some of it available to be repurposed by various ministries.

“Depending upon the location of that land, it may present opportunities for our minister of mental health and addictions or for recovery-type centres,” Guthrie said at a news conference. He also said the new legislation would promote transparency and accountability.

The act received royal assent on May 16, 2024.

Land title documents show Mraiche’s numbered company bought the commercial industrial property on May 27, 2024, for $1.7 million and sold it to Infrastructure for $2 million on Aug. 26, 2024.

Marshall Smith, the premier’s now former chief of staff, was the main architect of the government’s drug addictions strategy, which generated controversy by moving away from harm reduction to a recovery model that has required an expansive investment in recovery centres.

Guthrie, through his press secretary, has refused to say if the building sold by Mraiche to the government was intended to be used as a recovery centre.

Smith and LaGrange rebuff public inquiry

At a news conference last Wednesday, Premier Smith and Health Minister LaGrange both denied any wrongdoing, and said no when asked if they had received kickbacks.

They shrugged off calls for a public inquiry. Instead, they have ordered an as-yet-undefined investigation by an unknown third party, which will report back to Smith. The auditor general is also conducting an investigation, including of the issue directed to him by Guthrie.

Alberta NDP Leader Naheed Nenshi said the third-party investigation is rife with conflicts of interest and will allow no transparency since the third party reports back to the premier.

The NDP have formally asked the RCMP to conduct a criminal investigation. An RCMP spokesman on Friday would say only that the request is still under review.

If you have any information for this story, or information for another story, please contact Charles Rusnell in confidence via email.