A charity that raised millions by taking payments from many ORNGE suppliers has been shut down. The move happened Wednesday at almost the same time that a new board of directors — volunteer, not paid like the group that was ousted recently — took over.
The ORNGE Foundation, with a mandate to “support and promote improvement of patient care” in Ontario was the latest air ambulance entity to get the boot Wednesday.
New ORNGE boss Ron McKerlie said the decision to close the charity is part of the government’s plan to get the air ambulance service back on track. Scandal has dogged the service since mid-December, with revelations by the Star of high salaries and executive perks, secrecy, less than speedy ambulance dispatches and some mysterious payments from overseas.
McKerlie told staff in an internal email that an ORNGE-backed charity would have a hard time continuing to solicit donations from the public and patients until “we regain their trust and confidence.” The two executives who ran the foundation lost their jobs. The day before, ORNGE’s other charity, J-Smarts, was shut down.
The ORNGE Foundation has $7.5 million in assets, and an additional $6.8 million in “deferred revenue.”
What McKerlie did not mention in his email to staff is that very few of the dollars the foundation received since it was created four years ago came from public and patients.
Instead, the money (and gifts like two fancy motorcycles painted orange) came from companies like Pilatus, which sold 10 single-engine airplanes to ORNGE at an estimated total cost of $40 million for use as air ambulances.
In one case, a press release from ORNGE noted that Pilatus donated $343,000 to the Foundation. When ORNGE purchased $144 million worth of helicopters (12 in total) from Agusta Westland, Agusta made a $6.7 million payment to an ORNGE for-profit and gave two orange “choppers” to the Foundation. Another former asset of one of the ORNGE charities was a $50,000 speedboat that founder Chris Mazza wanted to use to teach youth how to wakeboard and water ski safely.
Another corporate donor to the Foundation was Fasken Martineau, the legal firm that works for ORNGE.
The Star has reviewed the ORNGE Foundations reports to the Canada Revenue Agency and found that the Foundation’s $7.5 million in assets is a rough split between cash and investments, and unidentified capital assets. The $2.2 million revenue last year includes an $835,659 payment from outside of Canada. The source is not identified. The sources of millions in deferred revenue are not identified in the documents, though that is not unusual in a charity’s report to the federal government.
In an interview, chief operating officer Tom Lepine said ORNGE routinely asks for companies it does business with to pay an additional 2 per cent to its foundation. He said this is the way large organizations operate. The Star does not know how much each company provided and whether the donation amount raised the cost to taxpayers of the air ambulance service.
The Foundation website went dark yesterday but before it did the Star noted a long list of corporate donors, including the two aircraft companies and a Swiss company called Aerolite Medical Interiors, which sold the mini medical suite that was installed in the new helicopters. That’s the medical interior that paramedics at ORNGE have been complaining about, saying that it prevents them from properly performing treatments such as CPR on a patient.
Now that these two charities are finished, what becomes of their assets?
“To the extent legally possible, those assets will be transferred to ORNGE,” an ORNGE spokesperson said in an email to the Star.
McKerlie, in his email to staff, noted that many ORNGE employees have been donating to the Foundation through their weekly pay.
“For those of you who have kindly contributed to the Foundation, you can rest assured that those funds will be provided to ORNGE to directly support the front-line operations to improve patient care.” McKerlie said the weekly pay deductions have ceased.
Also unclear is exactly what the ORNGE Foundation did. Its website described how it purchased medical equipment for use on the air ambulances. Ontario already pays $150 million a year to ORNGE and that money provides, equips and services the growing fleet.
One purchase the Foundation did fund was an air ambulance simulator that is kept in the ORNGE headquarters parking lot. It is the second simulator because the first one had an issue with mould and had to be replaced.
ORNGE insiders say the staff cuts and policy changes will continue over the next few weeks. Many who have contacted the Star expressed anger that while a few executives were terminated, many of the people fired had relatively low-paying ($40,000 to $60,000) jobs.
Meanwhile, ORNGE’s outgoing board, many of them well paid by the air service, announced that it had approved the creation of a new volunteer board that includes a respected former cabinet minister from the Mike Harris era.
Former attorney general Charles Harnick, a lawyer, will be one of six members on the board headed by mining executive Ian Delaney, chair of Sherritt International Corporation.
“Our goal is to restore public confidence in this critical service,” Health Minister Deb Matthews said after the government “recommended” ORNGE appoint the new slate.
The previous board was fired earlier this month after a string of troubles at the service, including the revelation its chief executive, Mazza, was paid $1.4 million a year. He is now on indefinite medical leave.
Forensic auditors are now going over the books at ORNGE, which started a series of for-profit businesses to “leverage” the $150 million a year the service gets from taxpayers.
The new board has been asked to wind down the for-profit operations at ORNGE, work with the forensic audit team to ensure “proper accountability for public funds,” negotiate a new performance agreement with the provincial government and conduct a comprehensive review of patient care and safety measures. This follows concerns air ambulances have been too slow to take off in responding to emergencies.
Delaney, well known in Canadian and international business circles for his company’s dealings in Cuba, stepped down as chief executive of Sherritt in November but remains chairman of the company in addition to his new duties with ORNGE.
Also named to the board are Sunnybrook Health Sciences Centre chief executive Barry McLellan, former Confederation College president Patricia Lang, Maneesh Mehta, co-founder of the Black Box Institute and a member of the board of the Central Local Health Integration Network, Patrice Merrin, chairman and interim chief executive of CML Healthcare, and Patricia Volker, an instructor with the Institute of Chartered Accountants of Ontario.