An Infrastructure Ontario sign hangs on construction hoarding outside the St. Michael’s Hospital in downtown Toronto, March, 2018.Fred Lum/the Globe and Mail
Tuesday’s fraud convictions of a former senior hospital executive and a former Toronto construction boss were the culmination of a four-year police investigation and 24 days of court testimony. But for The Globe and Mail, the St. Michael’s Hospital procurement scandal began more than a decade ago with the delivery of four brown envelopes.
In June, 2015, four Globe journalists received identical letters in their mail slots urging reporters to ask questions about a recent decision by St. Michael’s and Infrastructure Ontario to award a $300-million contract to Bondfield Construction Co. Ltd. The aging hospital was overdue for a major refurbishment, and Bondfield, a family-owned company based north of Toronto, had beaten out two larger rivals to win the contract.
The anonymous author of those letters alleged that John Aquino, the president of Bondfield at that time, and Vas Georgiou, who had recently been named St. Michael’s chief administrative officer, were friends and had not disclosed their ties as required during the bidding process.
That tip sent The Globe’s investigative team on a long, winding journey that included cultivating multiple sources with knowledge of the procurement, combing the halls of St. Michael’s to verify that a tiny bottled-water company had obtained vending rights and fending off a $125-million lawsuit.
The reporters’ first step was connecting with insiders who were familiar with the bidding process. These individuals said they also had concerns about the competition but feared professional reprisals if they spoke out publicly. They, too, understood that Mr. Georgiou and Mr. Aquino were close but had little in the way of concrete evidence to back it up.
What to know about the hospital redevelopment at the centre of the Bondfield fraud case
And there was another matter they encouraged the reporters to scrutinize: Mr. Georgiou’s ties to a bottled-water startup, OTEC Research, which manufactured and sold a special “oxygenated” product known as GP8 Sportwater. Mr. Georgiou, they said, stocked the bottles in his office and at some point, after he became the hospital’s second-in-command in 2013, St. Michael’s installed two GP8 vending machines.
The reporters pressed on for more evidence, and their big break came when one of their sources passed on a piece of information that turned out to be significant. While Mr. Georgiou was running the hospital, the source said, he was also working as a property manager of sorts at two commercial buildings, which were side by side in midtown Toronto.
When the reporters looked into public records for those properties, they discovered that the companies that owned them shared a common president: John Aquino. Next, the reporters interviewed some of the commercial tenants and their representatives who confirmed that Mr. Georgiou had been their point-of-contact for any issues with the property. This meant that Mr. Georgiou, who was in charge of the St. Michael’s redevelopment, was working on the side for companies owned and controlled by Mr. Aquino, the winning bidder – a relationship that Infrastructure Ontario said had not been disclosed by either man during its screening process for conflicts.
The Globe detailed its findings about the properties in a story published Sept. 24, 2015.
In 2016, Mr. Georgiou confirmed, in court documents, another commercial connection to Mr. Aquino. St. Michael’s had fired him in 2015, citing his alleged failure to disclose his ties to Mr. Aquino, so he sued the hospital for wrongful dismissal. In his statement of claim, he confirmed that both he and Mr. Aquino had ownership stakes in OTEC Research, the bottled-water company.
Bondfield also fought back – but against The Globe. The company sued the newspaper, the reporters and The Globe’s then-publisher, Phillip Crawley, for $125-million. The company alleged The Globe’s articles had the clear inference that the contract was awarded because of corruption, which it denied.
The Globe sought to have the lawsuit dismissed under Ontario’s Protection of Public Participation Act – a law designed to quash meritless lawsuits launched not to seek an actual remedy, but to intimidate and suppress speech in the public interest. These are often referred to as SLAPP suits (Strategic Litigation Against Public Participation).
Although The Globe successfully quashed the suit in 2018, the Ontario Court of Appeal overturned that decision in 2019. Shortly after, Bondfield sought protection from creditors, which effectively ended the lawsuit.
By 2020, Bondfield’s largest creditor, Zurich Insurance Co. Ltd., had inserted itself into the company’s affairs. The multinational insurer had issued what are known as surety bonds – a guarantee of project completion – on more than $1-billion worth of public-sector contracts awarded to Bondfield.
Zurich and Bondfield’s court-appointed monitor, Ernst & Young, were supplied with printed-out e-mails showing Mr. Aquino and Mr. Georgiou communicating throughout the St. Michael’s procurement process.
Investigators for Zurich determined that Mr. Aquino had supplied Mr. Georgiou with a secret BlackBerry, which the two men used to exchange messages – communication that was supposed to be forbidden outside of official channels during the competition to win the St. Michael’s contract.
The BlackBerry, and those printed-out e-mails, formed the foundation of the Crown’s criminal case against both men, which concluded with Tuesday’s guilty verdicts.