Documents reveal new details of sole-source contracts to Tory-connected firm Navigator

Alberta Health staff knew they were breaching government rules by handing successive sole-source contracts to Navigator, the consulting firm whose senior executives help run Conservative party election campaigns, documents show.

Alberta Health staff knew Navigator contracts breached rules

Former health minister Fred Horne used his personal email address to correspond with Navigator senior partner Jamie Watt. (CBC)

Alberta Health staff knew they were breaching government rules by handing successive sole-source contracts to Navigator, the consulting firm whose senior executives help run Conservative party election campaigns, documents show.

Auditor General Merwan Saher has previously investigated the four contracts, which were issued in 2011 and 2012 and totalled nearly $220,000. In a report issued in October, Saher found former health minister Fred Horne personally handed the contracts to Navigator and that there was no justification for the sole-source contracts.

Documents obtained by CBC News through freedom of information, following Saher's report, reveal more details of those breaches, including back-dated contracts, expedited payment before the contracted work was completed, and senior bureaucrats acknowledging some of the contracts breached their own rules.

The documents also reveal Horne used his personal email to correspond directly with Navigator senior partner Jamie Watt about the contracts. 

"It smells of corruption and cronyism, 100 per cent," Wildrose Leader Brian Jean said of the latest revelations. On Saturday, the Wildrose released new data which it said showed the Tory government spent nearly $1 billion on sole-source contracts in 2013 - 2014.

Wildrose Leader Brian Jean says the Navigator contracts reek of "corruption and cronyism." (CBC)
"This is again another example of a line that doesn't exist between the PCs, the companies to which they sole-source contracts, the government bureaucracy and, frankly, the taxpayer's wallet," said Jean.

Jean said both Watt and Navigator's senior partner in Alberta, Randy Dawson, are working on the current Progressive Conservative party election campaign.

No rationale for contracts

The documents show:

  • The rationale provided by Alberta Health to the auditor general for the successive sole-source contracts is contradicted by the department's own internal documents, and by an email authored by Horne.

Alberta Health said it hired Navigator without a competition because it needed work done within a tight time frame. But a Nov. 30, 2011, memo shows Watt personally pitched Navigator's services directly to Horne. None of the documents obtained by CBC News show any demand from the department for this work, which involved crafting health communications strategies and conducting focus groups.

The department also told the auditor general the successive contracts flowed from the research findings of the first contract. But in a Dec. 5, 2011, email from his personal account, Horne told Watt: "Someone from (Alberta Health) will be in touch with you tomorrow regarding contracts.

"The department may wait to do the second contract (comms plan) pending completion of the first (research)," Horne wrote, adding, "I am ready to move right away on the research."

The documents show Navigator invoiced the department for the contract on Dec. 8, a day before the contract was signed. Alberta Health rushed to issue a cheque for half the contract fee - $37,200 - on Dec. 13 and it was sent by courier to Navigator's Toronto office the same day.

  • Alberta government rules stipulate there must be an open competition for any contract over $75,000, except in the case of an emergency, for which the auditor general found no documented proof.

One contract was for $74,400; a second was $74,000. The total for all four contracts was nearly $220,000. After the fourth contract, a legal services reviewer warned the department may be in breach of trade agreements because another contractor could accuse them of contract splitting. 

  • Alberta Health initially considered paying Navigator the entire $74,400 cost of the first contract up front, after a discussion between Watt and a department employee, until an employee from the department's procurement section told them that was not allowed.

Instead, the department paid Navigator in installments, which were supposed to be made upon proven completion of work.

But the department even breached those terms by expediting the first payment of $37,200 to Navigator before receiving the first "deliverable," which was a work plan and discussion guide.

"I understand that the payment for Phase 1 was couriered to you yesterday and we are wondering when we might expect to receive the Phase 1 deliverable," a department policy analyst wrote in a Dec. 14, 2011, email to a Navigator employee.

  • All four contracts were backdated and signed after the work supposedly began. In one case, a $74,000 contract was signed more than five weeks after Navigator began its work.

Alberta Health staff acknowledged the contracts were retroactive and, in some cases, admitted the contracts breached their department's policy.

On one form dated Dec. 8, 2011, for the $74,400 contract, an employee wrote: "Note: Backdated agreement not in compliance with contract policy."

Andy Weiler, Alberta Health's now-former communication's director, signed off on two contracts which were noted to be retroactive and not in compliance with contract policy.

  • Carol Anderson, Horne's executive assistant, had direct knowledge of at least one of the contracts. Anderson left Horne's office and now works for Navigator as a lobbyist.

Political ties

"You have a situation here where one minute these people are working for senior ministers and the next minute, they are working for Navigator," Jean said. "And then the next minute, Navigator and these people are campaign managers and (are) running the campaign."

The Conservative government introduced and passed Bill 2, the Accountability Act, in December. It bans any person from acting as a consultant to the government and lobbying at the same time. But it doesn't prohibit one employee of a firm from lobbying while another employee of the same firm consults, as long as the work does not involve the same issue.

Conservative Leader Jim Prentice is personal friends with Dawson and Jason Hatcher, another Navigator partner in Alberta.

During the byelections in October, Prentice told The Edmonton Journal that all future government contracts would be awarded through a competitive process — but Navigator would not be getting any.

"Given the history and given the fact I know people at the firm, it is not appropriate and it will not happen if I'm premier," he said.