Alf Apps: Key ORNGE advisor

Why am I not surprised?

ORNGE paid lawyers $11 million
Fri Feb 03 2012
Toronto Star


ORNGE has paid $11 million to lawyers — taxpayer money used to create its now bankrupt for-profit companies, two closed charities and to raise funds on Bay Street.

Last month, ORNGE paid $1 million for legal expenses incurred after the Star revealed huge problems at the company

The legal expenses, covering 2006 to January 2012, were released by ORNGE to the Star this week.

Almost $9 million went to the Toronto based law firm of Fasken Martineau, where key ORNGE adviser and federal Liberal strategist Alf Apps is a partner. The remaining payments went to other law firms.

Apps, a close adviser to former ORNGE boss Dr. Chris Mazza, has done a lot for the service over the years.

He has made presentations to the Ontario Ministry of Health on behalf of ORNGE, sought financial investors, and provided guidance on “matters where his specialized expertise in structured financing was required,” according to a spokesman for the law firm.

At any given time, Apps was one of 15 Fasken Martineau lawyers working on the ORNGE file.

Fasken spokesman Stephen Hastings said Fasken Martineau serviced (and continues to service) ORNGE well and does so in the same manner it helps all clients.

“We believe that Fasken Martineau has and continues to provide significant value to ORNGE and the people of Ontario,” Hastings said. He noted that his firm is owed an additional $440,000 that has not yet been paid.

The billing records provided show that in January, ORNGE paid Fasken Martineau $507,000 (a similar amount went to a group of other law firms that month). Insiders say that in January top ORNGE executives and board members (some of whom are now out of a job) were hunkered down at Fasken’s Toronto office seeking legal advice on the growing ORNGE mess.

ORNGE is the provincial air ambulance service created in 2005 by Mazza and former health minister George Smitherman. An ongoing Star investigation has revealed high salaries, dispatch problems and the creation within the non-profit ORNGE of a series of for-profit companies with names like ORNGE Peel and ORNGE Global.

Mazza, a former emergency room doctor, was the driving force behind ORNGE. As his empire grew, Apps was always close by. Just before their public troubles began in December, Apps gave the opening address to a group of high net worth businessmen and women at a dinner catered by Humber College culinary students at the posh ORNGE headquarters. The evening was billed as “an investment opportunity that can shape the world’s health care landscape for the coming decades.”

Apps was there because he was not only a lawyer for ORNGE, he was the chairman of Byron Capital, the investment firm hired by ORNGE to raise $15 million to $20 million in a deal that was never completed.

Until his two-year term ended recently, Apps was the president of the federal Liberals. He is well connected in political circles.

While the Star has been provided with the total amount of legal fees (including taxes and disbursements) paid to Apps firm, few specifics have been provided. The annual amount has increased over the years.

As of this week, those for-profit firms are bankrupt, which led to the termination of Mazza and other executives. Insiders say Mazza is considering suing ORNGE. The bankruptcy of the for-profit firms has left Fasken Martineau a creditor, owed $440,000 in unpaid bills.

Fasken Martineau was the law firm that represented the precursor to ORNGE, the air ambulance service based at Sunnybrook Health Sciences Centre. The arrangement began in 2002.

By 2006, the first full year of ORNGE’s existence, Fasken Martineau was paid $475,000. In 2007, the Fasken Martineau charges were $237,000.

During 2007, Apps was added to the ORNGE legal team, the law firm said.

Total payments to Fasken Martineau were $1.1 million in 2008, $2.4 million in 2009, $1.5 million in 2010, and $2.6 million in 2011.

The law firm noted to the Star that “any increase in the volume of work was not tied to the involvement of any specific lawyer on the file.”

The total amount paid to Fasken Martineau (Apps’ own amount is not broken out) totalled $8.8 million. ORNGE paid an additional $2.3 million to other (unnamed on the document the Star obtained) law firms during the same six-year period.

According to the law firm and ORNGE, one of the big services Apps provided was the 2008-2009 structuring of a deal that raised $275 million to purchase new helicopters and airplanes. The payments of interest and capital back to investors comes out of the $150 million taxpayers give ORNGE each year.

In an earlier interview, Apps told the Star this deal was very successful.

“From a rating and pricing perspective . . . this was probably the most successful financing recently completed from the perspective of an organization that is neither government, nor a Crown agency or corporation and the rating was upgraded in October 2010,” Apps said.

Fasken Martineau was also involved in the creation of two ORNGE charities, the ORNGE Foundation and J-Smarts, a charity set up to teach youth how to safely engage in high risk sports. Mazza’s son was killed in a ski accident in 2006. Both charities were recently shut down on the advice of the province.

One specific detail Fasken Martineau did provide relates to the creation of the for-profit firms. Fasken Martineau said it was paid $2.5 million to structure the firms, which Mazza said would earn money for Ontario — 3 per cent of gross revenue for the province, the rest for Mazza and executives.

The for-profit firms included a high-end executive medical rescue program, and an attempt to sell ORNGE expertise around the world. Apps told the Star he was not one of the firm’s lawyers who set up the for-profit companies.

The companies were owned by Mazza and other executives.

When ORNGE briefed Ontario’s health ministry on its for-profit plans on Jan. 14, 2011, Apps was in the meeting room at Queen’s Park, along with an ORNGE executive and the now past chairman of the air ambulance service’s board.

In one of several emails, Apps told the Star he was there to “explain the structure” of the for-profit ORNGE Global to the ministry. He stressed that he was not in any way lobbying the government. Apps also briefed government finance officials on the same subject matter, he said.

People who lobby the Ontario government must register and there is no registry of Apps.

In an email to the Star Friday, Fasken Martineau said it has now asked the Registrar of Lobbyists for Ontario if Apps’ “communication” with the province to set up the Jan. 14 meeting constitutes lobbying.

Kevin Donovan can be reached at (416) 312-3503 or kdonovan@thestar.ca


UPDATE:

ORNGE: Alf Apps resign from his law firm

Toronto Star
Feb 10 2012

The lawyer who was involved in many of ORNGE’s deals has resigned from his law firm.

Alf Apps, who is also the former president of the Liberal Party of Canada, tendered his resignation Friday afternoon from law firm Fasken Martineau. Apps was listed as a counsel to the firm, not a partner.

Meanwhile, ORNGE is preparing a request for proposal, inviting law firms to bid for legal work at the air ambulance firm, ORNGE president Ron McKerlie told the Star.

A recent Star story revealed that since 2005, Fasken has been paid about $9 million by ORNGE for legal fees, expenses and disbursements for work that included structuring the air ambulance service’s now closed for-profit companies. Apps began working on ORNGE files in 2007.

Another $2 million in payments were paid to other firms over the same period. Fasken Martineau was the lawyer for the former air ambulance service based at Sunnybrook Hospital and when founder Dr. Chris Mazza started ORNGE in 2005 Fasken came on as its law firm.

Apps is also chairman of a company ORNGE chose last fall to try to raise $15 million to support its for-profit business.

Fasken managing partner Martin Denyes said in a statement that Apps is joining the law firm Wildeboer Dellelce LLP.

“At Wildeboer Dellelce, Mr. Apps intends to continue practicing law and to pursue his many business and board interests,” Denyes said.

“Mr. Apps’ colleagues at Fasken Martineau wish him well,” he added.