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Head of eHealth Ontario steps down amid contract scandal

Opposition members have called for the resignation of Ontario Health Minister David Caplan.

EHealth Ontario awarded lucrative untendered contracts to consultants well before Sarah Kramer was appointed chief executive officer, documents show. Two of the consultants were former colleagues of eHealth chairman Alan Hudson.

Ms. Kramer abruptly resigned on the weekend after only seven months at the helm and following a scandal over the agency's free-wheeling spending on consultants. She left with $316,670 in severance pay - the equivalent of 10 months of her annual salary of $380,000 and less than the 15 months she was entitled to under her contract.

Opposition members said Sunday the departure of Ms. Kramer - who was paid a bonus of $114,000 in March after just four months on the job - does not bring an end to the controversy. They said the buck stops at the door of Health Minister David Caplan and called for his resignation.

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Three of the contracts awarded to former associates of Dr. Hudson predate Ms. Kramer's appointment as CEO last Nov. 3, according to documents obtained by The Globe and Mail under a freedom of information request.

Courtyard Group was awarded three contracts worth just under $2-million, beginning in October of 2008, according to copies of contracts. Michael Guerriere, the Toronto-based firm's managing partner, was chief operating officer of University Health Network until 2000. Dr. Hudson was chief executive officer of UHN until the same year.

Another firm, Anzen Consulting Inc., was awarded two contracts worth $343,000 between October, 2008, and February, 2009, the documents show. Miyo Yamashita, a managing partner at the firm, also worked at UHN and is married to Mr. Guerriere.

Deanna Allen, a spokeswoman at eHealth, said Ms. Kramer served as an unpaid adviser to the agency's board of directors for a few weeks before assuming her duties as CEO.

"She presented kind of an action plan on how to get up and running quite quickly," Ms. Allen said in an interview last night. "Some of her thinking was adopted by the board," she said, adding that the contracts were not awarded at the urging of Dr. Hudson.

But another consulting firm, Accenture Inc., was awarded a contract in April, 2008, that paid the Mississauga-based firm's executive project sponsor, Rodney Bergman, $2,890 a day, the documents show.

The contracts, all awarded without competitive tenders, are particularly controversial because eHealth and its predecessor agency have made little progress in building an electronic health record system, an initiative in which Ontario lags well behind other provinces.

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Mr. Caplan said it became apparent a change at the helm of eHealth was needed following several days of controversy over the spending.

"There have been valid questions raised," he said in an interview Sunday. "That uncertainty has threatened to delay important projects and put taxpayers' dollars at risk."

Dr. Hudson said in a letter to Mr. Caplan that Ms. Kramer and the agency's board of directors mutually agreed it was time for her to leave. Ron Sapsford, Ontario's deputy minister of health, has been appointed acting CEO of the agency.

But Mr. Caplan himself has been under siege by opposition members, who have called eHealth a "rogue" agency over the awarding of multi-million contracts without tenders.

"I'm happy she's gone. I'm happy to see the back of her," NDP Leader Andrea Horwath said in an interview Sunday.

But she said Premier Dalton McGuinty also needs to show some leadership by "getting rid" of Mr. Caplan. "It all happened under his watch," she said.

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Interim Progressive Conservative leader Bob Runciman also said the Premier should show Mr. Caplan the door if he won't voluntarily resign.

"He needs to quit now, and stop taking the easy way out by assuming he's off the hook with Ms. Kramer gone," Mr. Runciman said in a statement.

Ms. Kramer has been at the centre of the controversy for receiving the $114,000 bonus. Her employment contract says she was eligible for an annual performance bonus equivalent to 30 per cent of her base salary, according to the documents.

"The board congratulates you on what it considers an exemplary performance," Dr. Hudson says in a letter to Ms. Kramer awarding her the bonus.

Mr. Caplan initially defended the bonus, but subsequently changed his tune.

"The Minister is very concerned about some of the information that has surfaced regarding eHealth," Mr. Caplan's spokesman Steve Erwin said in a statement last Friday.

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About the Author

Karen Howlett is a national reporter based in Toronto. She returned to the newsroom in 2013 after covering Ontario politics at The Globe’s Queen’s Park bureau for seven years. Prior to that, she worked in the paper’s Vancouver bureau and in The Report on Business, where she covered a variety of beats, including financial services and securities regulation. More

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