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Stephen Harper chats in 2006 with Arthur Porter, left, whom he appointed to the Security Intelligence Review Committee. (Ryan Remiorz/CP)
Stephen Harper chats in 2006 with Arthur Porter, left, whom he appointed to the Security Intelligence Review Committee. (Ryan Remiorz/CP)

Meet Arthur T. Porter, the man at the centre of one of Canada's biggest health-care scandals Add to ...

When Arthur T. Porter blew into Montreal to run the McGill University Health Centre in 2004, a well-spoken, deal-making whirlwind touched down on the city. The oncologist deftly worked the city’s cocktail party circuit, forging close ties with some of Quebec’s most influential people and securing several high-profile private- and public-sector positions: landing a spot on the board of Air Canada; forging relationships with a former premier as well as a Quebec Liberal health minister; and lastly – the appointment for which he is best known because it was handed to him by Prime Minister Stephen Harper – chairing the civilian committee that oversees Canada’s spies and how they gather secrets.

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With his colourful bowties, immense frame and the air of grandeur that peppers his speech (“It’s not the sort of things one does, it’s really what one has been able to accomplish”), he quickly charmed much of Montreal’s anglophone establishment before he resigned his position this time last year and left the country.

But the problem with forces of nature that powerful is that they leave unseen cracks after they head out of town, and it wasn’t until this week that Montrealers realized just how much of a mess Dr. Porter left behind.

On Tuesday, the Quebec government released the results of an audit that found the MUHC’s planned deficit of $12-million has ballooned to $115-million – a financial state so precarious that the hospital network has been assigned a special overseer to monitor its spending. The Health Ministry called the move one step short of trusteeship.

But that’s just the beginning of the MUHC’s problems. Quebec’s anti-corruption task force has also alleged that the hospital network was the victim of fraud in connection with its planned $1.3-billion superhospital, which is due to be unveiled in 2015. In November, police charged two former executives at SNC-Lavalin, the engineering firm that was awarded the contract during Dr. Porter’s tenure, with multiple criminal charges, including fraud and using falsified documents.

As for Dr. Porter, his exact whereabouts are unknown. A few months ago, reporters with La Presse traced him to a gated community in the Bahamas, where he runs a private cancer clinic. When McGill University recently sued him for $317,000, most of which was provided as part of a low-interest loan, it filed e-mail exhibits in court where he claimed he had returned to his native country, Sierra Leone. He has not responded to numerous requests for interviews from The Globe and Mail, including phone calls, e-mails and one letter.

Meanwhile, the MUHC has said publicly that it is reconsidering its choice of name for the main street running into the new superhospital – Arthur Porter Way.

But what was Arthur Porter’s way? Is he to blame for all of this?

The Globe interviewed numerous people from Montreal’s medical community, including doctors, former executives and former directors at the MUHC, who had dealings with Dr. Porter. Most of them agreed to interviews on the condition that they would not be identified, explaining that they had not been given permission to speak publicly about closed-door meetings. What emerged is a portrait of a man obsessed with cultivating relationships, so much so that he created an environment at the MUHC that allowed him to exert control over the people, namely the board of directors, who were supposed to keep him in check.

That description comes as no surprise to the medical community in Detroit, where Dr. Porter first cut his teeth as a hospital administrator.

 

A cautionary message

It was in 2003 when John Crissman, the dean of the medical school at Michigan’s Wayne State University, received a call from a headhunting team from Montreal.

Dr. Crissman’s message about Dr. Porter was straightforward: Proceed with caution.

“Dr. Porter is a talented administrator but often dilutes his efforts,” Dr. Crissman recalled saying, trying his best to diplomatically wave red flags about Dr. Porter’s web of private business pursuits around the globe. “I told them to be very careful about their agreement and to include language to control Arthur’s multiple outside interests.”

Throughout Dr. Porter’s tenure as the CEO of the Detroit Medical Center, where Dr. Crissman was a board member, the hospital was under constant financial strain. A Cambridge-educated oncologist, Dr. Porter had been vaulted into the role of CEO after a private consulting group recommended a massive overhaul of the hospital network, a non-profit corporation that struggled to bring in revenue while serving some of America’s poorest neighbourhoods.

Dr. Porter acted decisively, and, by the time he was done trimming, he had reduced the size of the staff from 20,000 to 13,000. Those sorts of deep cuts usually bear a political price, but Dr. Porter had a unique talent for appeasing different sides. Born in the civil war-ravaged country of Sierra Leone, he connected well with the medical centre’s most important demographic – Detroit’s urban black community. Sources both in Montreal and Detroit said he was fond of describing his ability to bridge racial divides with an oft-repeated line: “I look black but I speak white.”

But it wasn’t his cost-cutting at the hospital, nor his remarkable rise from an impoverished African country, that pushed him onto the front pages of the local media. More often than not, he found himself in the news because of concerns about his ability to manage both the hospital and his many private investments.

By the end of his tenure, reporters with the Detroit Free Press, relying on public records, identified Dr. Porter and an associate as the principals behind a dozen private businesses, including a cancer clinic in the Bahamas, an auto-parts company, a medical real-estate company and several IT firms. How he was able to effectively juggle all of these duties seemed a legitimate concern, but it was not enough to deter a selection team from Montreal when they came calling.

Around that time, Dr. Porter had threatened to seek bankruptcy protection for the Detroit Medical Center if the state of Michigan didn’t provide a funding infusion – which it promptly did, pledging $50-million. In some circles, this move was courageous, given that such a public threat would almost certainly cost him his job. The other interpretation, of course, was that Dr. Porter had failed to accomplish what he was hired to do and right the DMC’s finances.

The Montreal recruiters – a selection committee of doctors and directors, plus professional headhunters – were more inclined to believe the former narrative over the latter. They were in a desperate hunt for a decisive leader with teeth – someone who could cut through the morass of the Quebec bureaucracy and finally build Montreal’s new superhospital, which had been nothing more than a discussion for six years. And here was Dr. Porter, a man with a vocal distaste for red tape and the ideological bona fides to prove it; he was a self-identified Republican whose walls were adorned with photos of himself alongside George H.W. Bush and former vice-president Dick Cheney.

The headhunting firm, Egon Zehnder International, declined an interview request but issued a statement, through a public-relations company, that called its search “long and rigorous.” It’s not clear if that search included a review of publicly available court records, which turns up considerable litigation involving Dr. Porter.

A month before the search began, a medical-equipment financing company, DVI Financial Services, launched a $5-million lawsuit against Dr. Porter and two of his business partners in a California radiology clinic after they allegedly failed to pay back a loan. The suit would follow Dr. Porter all the way to Montreal, but not before lawyers unsuccessfully tried to seize Dr. Porter’s property and garnish his wages. During the same period, a Nevada company, the Medical Construction Resource Group, had also sued him and his business partners after they allegedly failed to pay a $137,000 debt. (Court records show the two sides settled out of court for an undisclosed amount.)

But the alarm bells weren’t confined to court records. During Dr. Porter’s final months at the Detroit Medical Center, a number of board members resigned. Oscar Feldman, a prominent Detroit tax lawyer and a former owner of the NBA’s Detroit Pistons, was blunt about his reason for leaving – Dr. Porter.

“My departure stemmed from the fact that too often his prognostications on DMC finances proved untrustworthy,” he said in an e-mail to The Globe.

But none of this slowed down Dr. Porter. When he landed in Montreal in the spring of 2004, he sized up his surroundings and – if his subsequent actions are any indication – he came to a realization.

This was a city where he could do business.

 

Broad networking

In his new home, Dr. Porter didn’t confine his networking to one political party.

He created an MUHC think tank on health policy, and named former New Brunswick premier Bernard Lord as its “scholar in residence.” He identified a key ally in then Liberal health minister Philippe Couillard, hosting him at his many parties and dabbling in business with Mr. Couillard when he retired. (Mr. Couillard was a witness to Dr. Porter’s unique ability to navigate different worlds, when the pair travelled to Baltimore in the summer of 2005 to the annual Shriners convention. The mission was to persuade the organization of fez-wearing philanthropists to keep their pediatric hospital in Montreal, which they did, thanks in part to Dr. Porter’s decision to become a Shriner in a secret ceremony held in Montreal.)

Observers of Dr. Porter say another significant political associate was then-senator David Angus, who became chair of the MUHC’s board in 2007. A Montreal lawyer and long-time Conservative fundraiser dating back to Brian Mulroney’s reign, Mr. Angus became a vocal supporter of Dr. Porter, and the two were frequently together, including posing for photographs at events with Mr. Harper, both at the hospital and a 24 Sussex Dr. garden party.

In an e-mailed statement, Mr. Angus said that all of his interactions with Dr. Porter were entirely “business related” and that he never socialized with him outside of their official duties. “My relationship with Dr. Porter may be characterized as that which you would expect to exist between a diligent and engaged board chairman and a competent CEO. It was at all times professional and of the highest quality and standard,” he said.

Mr. Angus declined to answer questions about what role he played, if any, in the appointments that soon flowed Dr. Porter’s way – appointments that came from corporate and Conservative circles with which Mr. Angus has long had affiliations.

In 2006, Dr. Porter was named a director at Air Canada, which was where Mr. Angus served as a director for nearly two decades. One former director described Dr. Porter as keenly interested in forging relationships with other directors. “He was always talking about … Harper and other Tories. He said they always took his calls,” the source said.

Given Dr. Porter’s penchant for self-promotion, it’s not clear if that is true. What is true is that in 2008, Mr. Harper announced that he was appointing the doctor to the Security Intelligence Review Committee – the five-person body that is supposed to keep tabs on the operations of Canada’s spy agency, CSIS. In order to legally serve in this position, Dr. Porter was sworn in as lifetime member of the Queen’s Privy Council and, according to the committee’s own literature, given clearance to examine “all information held by CSIS, no matter how highly classified that information may be.”

It seemed that Dr. Porter hadn’t learned anything about his experience in Detroit and the risks that come from spreading himself too thin. If anything, his appetite for ventures only became more voracious.

The most infamous of these was his commercial relationship with a former arms dealer, and a self-described former spy, Ari Ben-Menashe, which was first revealed in the National Post last year. In 2010, Dr. Porter signed a consultancy agreement with Mr. Ben-Menashe, a deal that would require Mr. Ben-Menashe to secure a $120-million grant from Russia for “infrastructure development” in Dr. Porter’s native Sierra Leone. In return, a company controlled by Dr. Porter’s family, the Africa Infrastructure Group, would manage whatever facilities or projects were constructed with the funds. The deal fell apart, neither party could agree why and Mr. Ben Menashe spoke openly about the failed plans with a reporter – which led to Dr. Porter’s resignations from both the MUHC and the Security Intelligence Review Committee.

But that was hardly the only business that Dr. Porter launched while steering the MUHC and its 12,000 employees. He threw himself into multiple mining ventures in Quebec and Sierra Leone and sat on the boards of investment funds and a bio-tech start-up. He also leaped into another growth industry – the solar-power business. And this time, the chair of Canada’s spy watchdog aligned himself with the former vice-president of a company controlled by the family of Vito Rizzuto, the Montreal mob boss.

In 2010, Dr. Porter became the principal investor in Liberation Energy Inc., a partnership between himself and Lou Gallucci. Mr. Gallucci had the unfortunate history of working as an executive vice-president for OMG, a small advertising company that gained notoriety in the early 2000s after it emerged that it was secretly owned by gangsters and their family members, including the Rizzutos, as well as Juan Ramon Fernandez, later convicted of drug trafficking and a murder conspiracy.

Mr. Gallucci declined to comment for publication, but has vehemently denied he was aware of any connection between his previous employer and the Mafia. He once said in an affidavit that he would never forget the day “my child asked me what the mob was and whether I was a member.”

Liberation appears to have done very little business; one staff member was previously the manager of an establishment in Toronto’s nightclub district. The company and Dr. Porter are being sued by an Ontario numbered company, registered to a Toronto accountant named David Foley, for failing to make good on a $250,000 promissory note.

Not surprisingly, given his myriad commitments, the staff at the MUHC’s six hospitals noticed something about Dr. Porter: He was often absent.

“In one period from January to April, I’m told that he was here eight days,” said one former MUHC executive. “So he’d come for a board meeting and leave again, and he was running the hospital on his BlackBerry.”

The former directors and executives who spoke to The Globe said a number of them were openly frustrated by Dr. Porter’s wandering attention, but efforts to rein him in fell under the purview of a committee within the larger board. Dr. Porter told CBC Radio in an interview that this committee, which was called the Nominating and Governance Committee and included Mr. Angus as well as the vice-chair, Montreal businessman Claudio Bussandri (who has since been named chairman), was given access to a dossier that listed all of Dr. Porter’s outside business pursuits.

Since Tuesday, when the Quebec government released its scathing review of the MUHC’s finances, several criticisms have been levelled at the board of directors for not properly overseeing Dr. Porter. The former directors who spoke to The Globe said it wasn’t that Dr. Porter was never challenged – he was, after all, surrounded by some of Montreal’s most accomplished citizens, including academics, lawyers, physicians and business executives. Rather, it appeared the board was structured so that his most outspoken critics had less power.

The former directors also said Dr. Porter excluded all staff and managers from board meetings, so that basic questions about waiting times and costs went unanswered.

“Arthur was so far away from the operations that he didn’t know the answers,” a former director said. “Or maybe he didn’t choose to answer. Who knows? The consequence of it is that we were given a binder full of mundane reports prepared by junior people that didn’t tell you anything.”

 

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