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Ontario Premier Dalton McGuinty addresses the media at Queen's Park in Toronto as Alan Hudson resigned as chairman of eHealth Ontario amid controversy. (Kevin Van Paassen/The Globe and Mail/Kevin Van Paassen/The Globe and Mail)
Ontario Premier Dalton McGuinty addresses the media at Queen's Park in Toronto as Alan Hudson resigned as chairman of eHealth Ontario amid controversy. (Kevin Van Paassen/The Globe and Mail/Kevin Van Paassen/The Globe and Mail)

McGuinty had hand in hiring former eHealth CEO Add to ...

Former eHealth Ontario chief executive officer Sarah Kramer landed the top job at the troubled agency after Premier Dalton McGuinty directly intervened in her appointment, over the objections of some of his own civil servants.

Ms. Kramer abruptly resigned from eHealth Ontario in June, amid scandal over lucrative contracts awarded without competitive tenders and nickel-and-dime spending by consultants. It became one of the most politically damaging episodes of the McGuinty government's 5 1/2 years in power.

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Only the resignations of Ms. Kramer and, later, eHealth chairman Alan Hudson, dampened the outrage over the agency's free-spending ways. When Mr. McGuinty announced the departure of Dr. Hudson, he said, "The buck stops with me," and introduced new rules that ban any government ministry or agency from awarding contracts to consultants without competitive tenders. Even so, the Premier has been largely insulated from the scandal.

Documents obtained by The Globe and Mail illuminate the hands-on role played in appointing and supporting eHealth's leaders by Mr. McGuinty. Senior officials in the Ministry of Health had opposed the selection of Ms. Kramer because they felt she did not have enough experience to oversee the daunting task of modernizing the province's medical records, one of the government's top priorities, according to sources close to the situation.

Any obstacle to Ms. Kramer assuming her new duties disappeared the day she met face to face with Mr. McGuinty in his Queen's Park office, documents show.

Those documents and interviews with eHealth insiders point to a wider theme of a fledgling government agency that cut corners and bypassed the normal bureaucratic checks and balances in its rush to play catch-up with many other provinces and create a digital record of every resident's medical history by 2015.

Ms. Kramer did not have to go through the normal channels government agencies use to find a chief executive officer. And Mr. McGuinty was directly involved in her hiring, according to sources close to the situation. The board of directors of a government agency typically appoints the top executive, following a competitive search that identifies a short list of candidates. But Ms. Kramer did not have to compete against others, and she was appointed directly by the premier through an order in council.

Her appointment was requested by Dr. Hudson, a neurosurgeon and former hospital president renowned for fixing problems in health care, and Mr. McGuinty's hand-picked choice for chairman of eHealth Ontario.

Dr. Hudson told the Premier he would take the job on one condition: if he could hire his protégé as chief executive officer, according to the sources. Dr. Hudson had worked with Ms. Kramer at Cancer Care Ontario, where he was president and she was the chief information officer. He was under enormous pressure to fix the province's medical records and he wanted someone he could trust to get the job done, the sources said.

"Hudson made it very clear to all kinds of people that it was a two-for-one deal," said a source close to the situation.

Dr. Hudson had taken the reins of an agency whose predecessor had spent $700-million with little to show for it. A review by Deloitte Consulting in 2006 found the Smart Systems for Health Agency "is struggling and lacks strategic direction."

Some senior bureaucrats, including deputy health minister Ron Sapsford and then-assistant deputy health minister Gail Peach, opposed Dr. Hudson's choice for CEO, the sources said. Although Ms. Kramer had done an excellent job at Cancer Care, they did not think she had enough experience to run an organization that had a multi-million-dollar mandate to replace the province's paper-based medical records with digital ones.

"It raised a lot of eyebrows everywhere," said a former senior civil servant who asked not to be named. "Everybody thought, 'That's a big leap.' "

Ms. Kramer could not be located for comment.

Jane Almeida, a spokeswoman for Mr. McGuinty, declined to discuss the Premier's involvement in the matter.

"Ms. Kramer was hired based on her experience and track record in the health-care field," she said in an e-mail response.

A Health Ministry spokeswoman said Tuesday that Dr. Hudson is not available for comment. He stepped down as chairman of eHealth Ontario in June, but still leads the province's drive to reduce waiting times for certain medical procedures.

The plan had been to appoint Ms. Kramer shortly after Dr. Hudson became chairman last September. But at an eHealth Ontario board meeting Oct. 23, Dr. Hudson advised directors that "a delay has occurred" in her appointment, according to minutes of the meeting obtained by The Globe under a Freedom of Information request.

The board minutes do not elaborate on the nature of the delay. But the sources said it was mainly caused by resistance to her candidacy - a scenario rejected by one board member. The sources recalled that Ms. Kramer herself talked about this last October, when she was in eHealth Ontario's offices as an unpaid adviser. She mentioned that "certain people" were not happy with her appointment, said one source.

At the Oct. 23 board meeting, directors discussed appointing Ms. Kramer as adviser to the board pending her appointment as CEO, according to the minutes.

As it turned out, that would not be necessary. Ms. Kramer, who arrived at the meeting later, told the directors she had met with the Premier that morning to discuss her appointment, the minutes show. A copy of her calendar for that day shows that she met with the Premier at 9:15 that morning for half an hour.

Seven days later, Health Minister David Caplan and cabinet chairman Gerry Phillips signed the order in council, making her appointment official. She took up her new duties on Nov. 3.

Mr. Sapsford declined to comment when asked if he and other ministry officials opposed her appointment.

"That's a very unusual question to ask," he said recently when reached at his home. "I can't comment on that at all. I'm sorry, I just can't answer that question."

Mr. Sapsford is returning to his role at the ministry following this week's appointment of Robert Devitt, former president of Toronto's East General Hospital, as interim president.

The eHealth Ontario board is searching for a new permanent chief executive officer, and this time, it plans to go through the same search procedures used by other government agencies, by hiring an executive recruitment firm.

"The board has decided to take a fresh approach," said eHealth Ontario spokeswoman Deanna Allen.

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