Ornge sells 2 helicopters for $20 million
Sale proceeds will be used to pay down organization's debt
Ontario's troubled air ambulance service has sold two helicopters for US$20 million that will be used to pay down its debt, Ornge said Wednesday.
They're among the 12 helicopters Ornge bought for $144 million from Italian company AgustaWestland — a deal that's come under intense scrutiny.
Ornge, which receives about $150 million a year from the government, is currently under a criminal probe for financial irregularities.
The organization has taken "another important step in addressing legacy issues inherited from previous leadership," Ornge CEO and president Dr. Andrew McCallum said in a statement.
"Our objective has been to recoup as much of the original investment as possible," he added.
"With this sale, we will no longer incur ongoing storage, maintenance and depreciation costs. We are confident that this is a deal which makes sense and minimizes impact on the taxpayer."
Ornge bought 10 AW139 helicopters in 2008 and bought two more for US$11 million each, and had been looking for a buyer since the government cleaned house at Ornge and installed new leadership.
"With this sale, we will no longer incur ongoing storage, maintenance and depreciation costs. We are confident that this is a deal which makes sense and minimizes impact on the taxpayer," McCallum said.
The helicopters were sold to Wilmington Trust of Delaware, Ornge said.
A legislative committee has been probing the helicopter deal. It heard that Agusta paid an Ornge spinoff company $6.7 million after it reached a deal on the helicopters, which included the$4.7-million agreement for marketing services.
Both Ontario's auditor general and Ornge's interim CEO said they found no evidence that the work performed reflected the amount of money paid, which has fuelled allegations that it was a kickback. Agusta has denied any wrongdoing.
Former Ornge chairman Rainer Beltzner has testified that even though the board of directors made it clear that they were to approve any major amendments to the deal, they were completely unaware of the $6.7-million payment.
He said he saw documents in January 2012 — when Ornge's troubles made headlines — that appeared to show that Ornge was under no obligation to pay for weight upgrades for its new helicopters, but did so anyway.
Lack of oversight
Ontario's auditor general has criticized the governing Liberals for failing to oversee Ornge, despite giving it $730 million over five years and allowing it to borrow another $300 million.
The Liberals insist Ornge went rogue with a web of for-profit companies and questionable business deals, as well as exorbitant salaries.
Ousted CEO Chris Mazza received $1.4 million in compensation, top of hefty loans totalling $1.2 million in a single year.
Mazza collected hundreds of thousands of dollars in "medical director" fees on top of his salary, the committee heard. Beltzner signed off on the agreement, but said he didn't know that Mazza was demanding and receiving money for services there's no record he provided.
During his second grilling by the committee on Wednesday, Beltzner said the board asked the Ministry of Health and Long-Term Care in 2008 if they had any concerns about Ornge's for-profit ventures. But the government didn't voice any reservations until 2012, he said.
It's "inconceivable" that the board would have forged ahead with those plans had they received "any expression of concern" from the ministry, Beltzner said.
Even though a top ministry official told the committee that there were reservations about Ornge dating back to 2008, they never told the board about it, he said.
"There was nothing that ever came back, either verbally, written, email, voicemail, pigeons or any other form of communication," Beltzner said.
He's "more than a little irritated" by that, he added.
"The committee needs to establish whether this failure to communicate apparent serious concerns to the board of Ornge and keep the board of Ornge in the dark was simply an oversight or a calculated decision by government," Beltzner said.