Hospital denies defaming former director accused in kickback scheme

The Ottawa Hospital is denying it defamed or slandered one of its former directors whom it accused of taking part in an illegal kickback scheme that allegedly involved fraud, embezzlement and misappropriation of hospital funds.

The denial comes in its response to a countersuit filed earlier this month by Brock Marshall, who spent 28 years working for the hospital and served as its director of engineering and operations before retiring in 2015.

Marshall was one of two longtime Ottawa Hospital directors named in a statement of claim filed in January 2016 by the hospital, which alleged that they defrauded the institution in exchange for luxury vacations, free or inexpensive cars, and other family favours.

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Marshall responded to the allegations last week, claiming he was always a "loyal and honest" hospital employee who never took inappropriate gifts, and outright denied that he gave potential vendors any unfair advantages during the contract bidding process.

He also filed a $4.5 million counterclaim against the hospital, suing the institution for negligence, defamation and punitive damages.

Frank Medwenitsch, the other director named in the hospital's statement of claim, has already filed his own response to the hospital's allegations, in which he denounces any claims of wrongdoing made against him.

Five Ottawa firms were also named in the hospital's original lawsuit. They have also denied the allegations.

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Dealt with Marshall in 'good faith'

In its July 28 response to Marshall's counterclaim — the latest salvo in a legal back-and-forth that's now gone on for approximately 18 months — the Ottawa Hospital denied defaming Marshall or causing any damage to his reputation.

Medwenitsch and Marshall were initially accused of giving the contractors improper advantages — by handing over advanced copies of procurement documents, internal hospital communications about projects and information about their competitors' bids, according to the original 2016 statement of claim.

The former directors were also accused of "knowingly" approving invoices for work that was not performed or not yet complete, and approving inflated prices.

In its Friday filing, the hospital reiterated its belief that Marshall had taken part in the alleged fraudulent scheme.

"The hospital dealt with Marshall in good faith at all times, including the manner in which it made and investigated its allegations of Marshall's wrongful conduct, including his receipt of kickbacks and [his] participation in the fraudulent scheme described in the statement of claim," said the hospital in its response.

In addition to denying any of its statements about Marshall were defamatory, the hospital also said the former director "suffered no damage" from any of its accusations.

The hospital also denied it "condoned or approved" Marshall's conduct, and called for his counterclaim to be dismissed.

Marshall said he has suffered "significant financial and emotional damages" and has been unable to find "suitable" work since the hospital filed its initial lawsuit.

None of the claims made by Marshall, Medwenitsch, or the Ottawa Hospital have been tested in court.

COO allegations 'baseless'

Another name that has come up frequently in both Marshall's and Medwenitsch's statements of defence is Cameron Love, the hospital's current chief operations officer.

In his filing, Marshall said that he had advised Love — who was his supervisor at the time — that he would be having home renovations performed by a contractor who was doing business with the hospital, and that Love "did not seem to care." Moreover, Marshall claimed that Love had work carried out by the same contractor.

Both he and Medwenitsch have also both accused Love of failing to respect guidelines established by Ontario's Ministry of Health and Long-Term Care when it came to procuring contracts.

"In cases where construction projects were approved through Ministry guidelines, Cameron Love at times directed hospital staff to allocate the cost of other projects on the Ministry-funded project in question, without the Ministry's knowledge or consent," said Marshall in his statement.

Those allegations, however, were nothing more than a distraction designed to "deflect" the focus away from Marshall's own misdeeds, the hospital said in its response.

"Such allegations are baseless and are clearly designed by Marshall to deflect attention away from the serious allegations and evidence of the fraudulent scheme perpetrated against the hospital," they said.

Renovations previously declared

Love had previously disclosed during an investigation into the Ottawa Hospital's planning department that he had renovations performed on his home between 2004 and 2011 by a contractor also used by the hospital.

In 2016, the investigation cleared Love of any wrongdoing, ruling that Love paid for the work personally and disclosed it to a supervisor.

"In 2004/05, work was performed by one of the defendants named in the suit. In 2011, he [Love] had work done on his home by a hospital contractor who is not a defendant in the suit," Allison Neil, the hospital's executive vice-president of communications, told CBC News at the time.

"The investigation has found no improper influence over contractor procurement, collusion with contractors or wrongdoing by Cameron Love."

Read the Ottawa Hospital's latest legal filing here