May 26, 2022

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Ontario hospital employee fired after questioning CEO deal: lawsuit

A former finance director at a major Ontario hospital network is coming forward, saying in a lawsuit she was fired after raising questions about a multi-million dollar contract between the hospital network and an agency run by the hospital network’s CEO’s husband.

Her notice of claim says that CEO is Michelle DiEmanuele, who has since been temporarily seconded from Trillium Health Partners to work as the head of Ontario’s public service and the deputy minister to the premier.

“I knew instantly that if I raised it, it would be a career-ending move. But I knew at the same time it was the right thing to do,” Barbara Baca, whose role included reviewing contracts at THP to make sure that they are done according to provincial rules, told CTV News Toronto.

Trillium Health Partners denied the allegations in a statement, saying that it followed proper procedures and it intends to fight the claims about the estimated $5 million contract with Mohawk Medbuy Corporation, a shared services organization that bulk-buys hospital goods and services.

“The allegations you have referenced are without merit and not true. The lawsuit in question will be vigorously defended in court,” the statement said.

“Any suggestion that Ms. DiEmanuele, THP’s Board of Directors, or its leadership have acted improperly or against the hospital’s interests regarding THP’s membership in Mowhawk Medbuy Corporation or any transactions related to that membership is false,” the statement said.

In the suit, which was filed in February, Baca claims that on March 26, 2019, she discovered that a $5 million contract was approved by the hospital network’s board before she saw it.

“Someone flagged me on this and said, ‘Are you aware of this contract?’ They thought I had been. And I went, ‘I’ve never seen this before,’” she said in an interview.

In the statement of claim, Baca says she examined the contract over the weekend, concluding “…an invalid sole source services contract had been awarded by the Board… to an external company, Mohawk Medbuy Corporation… in a perceived or actual conflict of interest. MMC’s President and Chief Executive Officer, Tony DiEmanuele, is the current spouse of the THP’s President and CEO, Ms. DiEmanuele.”

In the suit, she claims she flagged that proper processes hadn’t been followed in that and another contract, and was fired days later, on March 29, 2019.

“Ms. Baca pleads that she was dismissed in retaliation for having uncovered the improperly procured MMC Service Contract… in the alternative, Ms. Baca pleads that she was dismissed in order to remove the onerous oversight function she performed,” the suit says.

Baca’s lawyer, William Gale, told CTV News that she is seeking special and punitive damages for what she alleges is a wrongful dismissal.

“Her conclusion is that they could get rid of her due diligence role,” Gale said.

The contract was among the concerns raised in a separate letter written in December by an anonymous group of doctors and obtained by CTV News Toronto. Trillium said it investigated the allegations and the province’s health minister said she intended to review their findings.

Trillium Health Partners produced internal memos from March 29, 2019 that showed the DiEmanueles’ relationship was disclosed to the hospital network’s board. They say she recused herself and followed an ethics regime.

The hospital network said in a statement that many oversight steps that would normally be required were not because Mohawk Medbuy is a non-profit company.

“As MMC is a not-for-profit corporation, no competitive bids were required under THP’s policy or Ontario’s Broader Public Sector Procurement rules. The claimant’s understanding of the BPS policy and THP’s signing policy are both incorrect,” the statement says.

Mohawk Medbuy said in a statement their CEO, Tony DiEmanuele, recused himself too and that “MMC was scrupulous in our adherence to these Board-approved protocols, ensuring our CEO was not involved and did not participate in the process.”

DiEmanuele didn’t respond to questions from CTV News Toronto. As Secretary of the Cabinet, she’s the top public servant reporting to the premier and the head of Ontario’s public service.

That secondment began on June 20, 2021. Hospital documents indicate when that secondment is finished she is entitled to return to her position as Trillium Health Partners CEO.

The province’s opposition NDP introduced a bill in the legislature to require any health organization that receives over $1 million from the provincial government to disclose more details about salaries and contracts.

“Millions of dollars leave our hospital system through sole-sourced contracts,” France Gelinas, the MPP who introduced the bill, said, adding she hoped her bill would shed light on hospital contracts.