Inside look at how industry association successfully pressured government

Internal government documents obtained by CBC News provide a rare window into how an industry association successfully pressured Alberta Justice, and its minister, to reopen a contract and effectively abandon its earlier effort to control spending.

Alberta Funeral Service Association forced Alberta Justice to change contract

Former Alberta chief medical examiner Dr. Anny Sauvageau was strongly opposed to reopening a public contract to address payment complaints from a funeral service association.

Internal government documents obtained by CBC News provide a rare window into how an industry association successfully pressured Alberta Justice, and its minister, to reopen a contract and effectively abandon its earlier effort to control spending.

The internal documents chronicle how Justice not only reopened the contract, it allowed the Alberta Funeral Service Association (AFSA) to effectively negotiate some of the terms of a revised contract before it was publicly released for tender.

The chief medical examiner's office administers body transportation. In response to years of complaints about poor service and inflated fees in rural Alberta, it issued a contract which took effect in early May 2014.

Documents show the pushback from the AFSA was immediate. They also reveal the association's political influence and the government's fear of it.

CBC News was not able to arrange an interview with Sheila Van Alstyne, the funeral association's now past president.

So powerful was the AFSA that the contract was reopened and revised against the initial advice of a department lawyer and procurement director, and the strong opposition of chief medical examiner Dr. Anny Sauvageau.

In an April 29, 2014 email, Rob Phillips, the acting deputy minister of Service Alberta, warned the AFSA was "unhappy with changes being imposed in the new contract.

"We were advised that funeral businesses said they will go to the opposition if the government won't look into this on their behalf," Phillips said, adding that when cemeteries and funeral homes had a similar dispute with another department over a contract, "the matter received media attention and then was quickly resolved."

Acting assistant deputy minister Rae-Ann Lajeunesse forwarded the Phillips email to Linda Chupka, chief of staff to deputy minister Tim Grant. Chupka thanked her for the heads up, then added: "We need to avoid any publicity here."

Political influence

The documents show that from this point forward, the AFSA clearly knew it wielded significant political influence and was prepared to exercise that influence to force the revision of the contract.

Alberta Funeral Services Association president Sheila Van Alstyne directly negotiated the revised contract with Alberta Justice. (Wombold Family Funeral Homes)
In a May 5, 2014 letter, AFSA president Sheila Van Alstyne told Sauvageau the AFSA had rejected the new contract and its members would only provide services under "the previous payment guidelines and conditions."

To emphasize her point, Van Alstyne attached 50 form letters of support from AFSA members.

Jonathan Denis, who was Alberta Justice minister at the time, and deputy minister Tim Grant subsequently met with the AFSA on July 2, 2014. Although the medical examiner's office is responsible for the body transportation budget, Sauvageau was not invited to the meeting.

The AFSA asked Denis to put a hold on the contract. For legal reasons, the contract could not be suspended, and now the department was learning more about the effect of the association's ongoing pressure campaign.

In a July 7, 2014 email, Lajeunesse told other senior bureaucrats the AFSA had begun a "letter writing campaign to MLAs and most recently to police/first responders."

In the letters, some of which are included in the documents, the AFSA told municipalities, emergency and fire departments and police that under the new contract they could expect increases in their workload and expenses.

In an email to Denis, Conservative MLA Jeff Johnson asked, "JD, I'm confused (about the) status on this. Are you opening this contract up or not? Our rural guys were locked out."

Sauvageau pushed to have the department issue a letter to counter the "misinformation" circulated by the AFSA. But not wanting to risk further irritating the association, Lajeunesse vetoed the letter.

Staff resist re-opening contract

Senior staff within Justice also pushed back against reopening the contract.

"I am not sure I understand what advice you are seeking," Justice lawyer Erin Skinner told Lajeunesse in a July 14, 2014 email. "The legal recommendation is to not change any of the terms of the contract.

"It would be extremely unusual to enter into negotiations with vendors when we are looking at a standing offer agreement with multiple vendors for one service," Skinner continued.

Justice's director of procurement, Van Repchinsky, agreed with Skinner, adding that reopening the contract would be unfair to companies which had already signed it and "it may also place the government at risk for legal action."

But the documents show Lajeunesse pushed ahead with revising the contract, even as Skinner warned the decision to "depart from ordinary Government of Alberta procurement policy and practice" could set a contract precedent for the entire government.

Senior Justice officials rushed to amend the contract as the AFSA ramped up pressure by threatening repeatedly to withdraw service and take their concerns to opposition MLAs and the media.

Emails also chronicle the escalating tension between senior Justice officials and Sauvageau, who objected to her office's exclusion from the contract negotiations. After repeatedly warning that the revised contract not only capitulated to the fee demands of the AFSA but would cost the medical examiner's office hundreds of thousands of dollars more, Sauvageau finally demanded she be removed from the contract talks altogether.

Sauvageau said the new contract would "legitimize the misbehaviours and financial irregularities" the initial contract sought to eradicate.

Increased cost

In fact, a Justice financial analysis found the proposed revised contract could cost the medical examiner's office up to $480,000 in each year of the three-year contract.

Justice officials worried whether they were even legally able to return to the fees the AFSA wanted, given that the compensation for body transportation is governed by the Fatality Inquiries Regulation. But Repchinsky advised that the regulation merely acts as a guideline and that the revised contract would supersede it.

By early November, Justice officials had rewritten the contract to meet the industry association's fee and other demands.

But before Repchinsky posted the public contract, he first sent it to the AFSA to sign off on.

"Once I receive your approval I will seek (Lajeunesse's) approval prior to removing the existing (contract) from the Alberta Purchasing Connection site and posting the new (contract)," Repchinsky wrote in a Nov. 6 email to Van Alstyne and AFSA representative Marlon Wombold.

"Let me know if you have any questions and please provide your approval."

The department posted the newly revised contract on Nov. 14, 2014. It is still in effect today.


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