If you’ve heard of Arthur Porter, you know that last spring he was charged by the Canadian government for fraud, corruption and bribery.
You probably also know that he fled to the Bahamas, diagnosed himself with cancer and then was later arrested while trying to pass through Panama, where he is still languishing in jail fighting extradition charges.
Among other bizarre twists to the story, he was the CEO of the McGill University Health Centre, a member of Canada’s security service watchdog the Security Intelligence Review Committee, close with Stephen Harper and apparently connected with diamond mining interests in Sierra Leone as well as Israeli arms dealers.
Porter is accused of pocketing $22.5 million from the budget of the MUHC while he was CEO. Besides this, he lost an estimated $42 million in a shady deal purchasing a building worth $3.6 million, which ultimately the City of Montreal would not give MUHC permission to develop.
Porter has also been blamed for the MUHC’s financial crisis. In 2006, it was estimated that a new super-hospital would cost $722 million. By 2010, the price tag was closer to $1.3 billion. In addition the MUHC has an accumulated deficit of $140 million and in 2014 alone accrued a deficit of $20 million.
In the way the MUHC car wreck has unfolded in the media so far, all of the fanfare around Porter’s indiscretions could lead one to think that Porter was the primary cause of the new hospital’s failings. It’s as if he was just a bad seed, and his relationships with major politicians just prove how bad seeds can easily fool even the most upstanding politicians. But here’s another idea: that Arthur Porter was a product of the current governing ideology of cronyism, privatization and cost cutting.
A culture of corruption
The construction of the super-hospital is unfolding in the midst of a massive corruption scandal in Quebec politics being uncovered by the Charbonneau Commission. It has been revealed that over the last decade engineering firms coordinated price fixing, inflating the price of public contracts. A percentage of the profits of this collusion would then find their way back into the coffers of the ruling political parties and individual politicians who sold the infrastructure projects to their constituents.
Among the subjects of the investigation is SNC-Lavalin, the engineering firm awarded the public-private partnership for the MUHC. This company achieved worldwide infamy when it was placed on the World Bank’s corruption blacklist. The former CEO of SNC-Lavalin, Pierre Duhaime, has been arrested on charges of fraud and conspiracy related to the MUHC.
The list of suspects seems to drag on. Among those with ties to the MUHC, St-Clair Martin Armitage, a contractor, and Yanaï Elbaz, an MUHC executive, have both been arrested. Norman Rinfret, now director of the MUHC, approved the purchase of Porter’s new Bentley from the hospital’s own funds.
And it goes all the way to the top. Evidence is emerging that Jean Charest, then premier, had close relationships with construction magnate Tony Accurso, who is the now under criminal investigation. Philippe Couillard, the Liberal health care minister who at one point was in contact with Porter almost daily, is now premier. The former mayor of Notre-Dame-de-Grâce and Côte-des-Neiges and brief mayor of Montreal, Michael Applebaum, was arrested for his dealings with real estate developers. He was mayor when the MUHC started construction of the super-hospital in Notre-Dame-de-Grâce.
It quickly becomes clear that Porter wasn’t alone. Many of Quebec’s politicians were known to work closely with real estate, construction and development companies. Porter worked within a culture of backdoor deals and lack of scrutiny over where taxpayer money goes.
But all of this would lead one to think that the main problem, then, is corruption on a wider scale. But it’s more than that. It’s a political system that cultivates corruption as a normal tool of governance.
The political context
Let’s go back to the super-hospital’s beginnings. McGill University ran a handful of aging hospitals considered inadequate in terms of space and facilities. And so plans were made to centralize these hospitals through the construction of two larger hospitals — including the MUHC — with higher quality of care and high-tech facilities.
In an effort to save public money, officials decided that these would best be developed as public-private partnerships. These are said to have the advantage of costing less because private companies have superior construction expertise, while the government can take on the risk, supply the capital and oversee the project. To make this a reality, the MUHC wanted a director who could get the job done. Porter, who had a reputation of working well with the private sector when he managed a hospital in Detroit, was considered to be the perfect candidate.
Moshe Safdie, a famous Montreal architect, initially agreed to head up design, but quickly stepped out when he became concerned about the project’s direction. As he said to the Gazette in 2007, “It’s in the nature of the beast when you do a PPP [public-private partnership], you can call it cutting corners.”
The public-private partnership is part of a larger trend of cutting costs and privatizing government services. As part of this, concern for public welfare is increasingly replaced with an ideology of efficiency, economic growth and minimized state involvement. But as Tore Sager has pointed out in his exhaustive research on public-private partnerships, these funding structures often have negative consequences. They lead to corruption and money laundering through lack of transparency, are unable to integrate well with city infrastructure and have difficulties working with local community groups. Remarkably, the MUHC ended up ticking all these boxes: it failed to respond to community concerns, provide appropriate public transport to the new site and take into account mounting traffic problems in Notre-Dame-de-Grâce.
As Safdie predicted, the MUHC was set up to flounder in a web of infamy even before Porter was involved. But more than this, it corresponds to Sager’s conclusion that public-private partnerships are often just subsidies to coalitions of construction companies, real estate developers and politicians. The threads of corruption made visible by the Charbonneau Commission indicate that much of the project was pushed ahead with little forethought, transparency and consultation, inevitably becoming a handout to the city’s elite.
The MUHC’s missteps, only partly due to Porter’s finagling, will have terrible consequences. It means the hospital had to cut its operating budget, eliminating 270 jobs as of Nov. 30, 2013, including 40 nursing positions. The organization insisted that public funding cuts and layoffs would not affect the quality of health care provided at the hospital, an assertion that employees have found dubious.
Now the hospital’s essential services are being off-loaded to frontline clinics to make more space for high-tech facilities simply because the newly constructed hospital does not have more floor space than the Royal Victoria Hospital that it is replacing. It was announced that the hospital will not house clinics relating to mental health, rheumatology, immunology, dermatology, ophthalmology, geriatrics and in vitro fertilization. On the whole, the hospital seems more and more intent on becoming a centre for specialized services. Private clinics will be built outside of the MUHC to account for this, raising rent in the neighbourhood, contributing to the displacement of community groups. In addition the new hospital will actually have fewer beds than the hospitals it is replacing, and will now be charging patients per night.
This comes at a time when the Liberal government is announcing its plans to close most community-supported social services, social and health service centres that oversee local clinics throughout Quebec, while centralizing administrative services in the island of Montreal. We have yet to see what the effects of this will be, but it is in line with the overall trend of “cutting corners” as Safdie delicately put it.
In spite of its original vision to improve access to health care, the MUHC appears to be unable to address entrenched failures of Quebec’s crumbling health care system, and in fact has probably made things worse.
Coalition against privatization needed
We need to grapple with the fact that it’s not just a couple of bad seeds. The failure of the MUHC can’t just be blamed on Arthur Porter, not even on some inept — and allegedly corrupt — politicians. We are up against an organized elite that takes advantage of the current ideology of public-private partnerships, cost cutting and efficiency to line their own pockets.
In the face of this powerful group, we need to shift our focus from blaming individuals to building a coalition of our own that protects community interests, fights privatization of public services and sees mega-projects like the MUHC for what they are: ventures easily manipulated to profit the rich, eventually burdening taxpayers and the poor who can’t afford a failing health care system.