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Controversial business proposal divides Charlotte County hospital group

A citizens group that was created two years ago to fight for the Charlotte County Hospital is in disarray after local officials rejected a controversial proposal from a Fredericton entrepreneur.

Jamal Instrum told a public meeting earlier this month he could bring $50 million in private investor money to create a research centre at the hospital, but the Town of St. Stephen refused to endorse it because it lacked key details.

The outcome divided the Concerned Citizens of Charlotte County, a group formed two years ago to defend the hospital and other provincial services.

Former co-chair John Gardner said Instrum ended up "taking over the group" to push his proposal, but the plan raised too many questions.

"There were concerns about privatization and the community really didn't go for that idea," said Gardner, who lives in Saint Andrews.

"Whenever you did any research, numbers were changing, names were changing, things were changing depending on who was hearing the story. That doesn't happen with a $50 million deal."

The group's other co-chair, Trudy Higgins, supported the proposal. She told CBC News it was "a phenomenal idea" but because the town wouldn't support it, "the project's dead."

"I'm very discouraged," she said. "I'm very disgruntled."

Instrum has since pitched the same proposal to the Town of Sackville for the hospital there. He was turned down there, too.

Gardner said the episode has left Charlotte County without an active grassroots group fighting against more cuts at the hospital.

"I feel we've taken a major hit because of what happened, because of Jamal," Gardner said.

"It was not a good thing for the community."

Instrum would not do an interview with CBC News.

A history of proposals

A decade ago, Instrum criticized the Liberal government of Shawn Graham for rejecting his proposal to let him install private CT and MRI scans in the province's hospitals.

Instrum's company would bill the province for each scan, which he argued would be less expensive than the province buying, running and maintaining its own diagnostic equipment. But the Liberals turned down the idea.

He later approached the Progressive Conservative government of David Alward with the same idea, according to former PC health minister Ted Flemming.

Flemming said Instrum told him the equipment he was promoting was "vastly superior" to what the government had.

But after meeting Instrum and checking with experts in the Health Department, "the purchase did not go ahead," Flemming said.

"I didn't pursue the issue."

The Nova Scotia government also rejected a similar proposal Instrum made in 2014 to install a CT scanner at the hospital in Inverness.

He opened a private CT clinic in Bedford, N.S., the same year, hoping to sell its services to the province. But that clinic closed in 2015 for what Instrum called a financial restructuring.

Another Instrum company, Greensafe Demanufacturing, pitched a recycling plant for Caraquet in 2009. The company said a $50 million private investment would build a plant to dismantle old appliances and recycle the raw material.

Greensafe made the same pitch to Fort Erie, Ont., in 2011, contingent on $10 million in government subsidies. Neither plant was built.

Instrum's former partner in Greensafe, Clifford Kennedy, said the U.S. investment money never came through. He would not discuss his former business partner.

"Jamal is Jamal," he said. "There's nothing I want to say in particular."

Charlotte County deal rejected

Instrum's business history was one reason his Charlotte County Hospital proposal ran into opposition at a public meeting June 5 in St. Stephen.

He and business partner Brian Cheney were asking the town to sign a memorandum of understanding that would commit it to support transferring the hospital to their company, Maple Leaf Lodge.

The hospital would become the home of a $50 million research centre and clinic for treating post-traumatic stress disorder with marijuana.

Wilf Torunski, a St. Stephen retiree who attended the meeting, said town officials were concerned about Instrum's earlier ventures.

"They were not trusting those two characters and they were going more on experience and history than anything else," he said.

Torunski said he thought the proposal should have been explored by town officials but said Instrum's plan "was rather weak" and "poorly thought out."

Instrum seemed to believe the town owned the hospital or the land and would be able to sign over the property, Torunski said.

"That's an issue I'm still confused about today," he said. "This was part of the weakness of the project. They apparently had their minds made up that they could very quickly, with the help of the Town of St. Stephen, gain access to the building."

Property assessment records show the hospital site is owned by the provincial government.

Cheney couldn't be reached for comment.

No business plan

But according to the St. Croix Courier newspaper, Mayor Allan MacEachern and the head of the town's economic development agency, Richard Fulton, told the public meeting that Instrum's plan "kept not checking out." Fulton turned down an interview request.

MacEachern and Fulton also told the meeting Instrum refused to provide a business plan or his own resumé.

Higgins, who supported Instrum's proposal, told CBC News she was aware that several of his earlier business plans had ended up not going ahead or failing.

"Ever wonder why that is?" she said.

The common denominator wasn't Instrum, she said, but that "they're government … the government was involved in any ones that I talked to."

University of New Brunswick research head Hart Devitt told the meeting by Skype that the proposal was "pretty exciting," according to the Courier.

In a statement, UNB vice-president David Burns said the university supported the proposal and "potential partners had indicated interest in contributing" to a Canada Research Chair in PTSD at the centre.

But UNB was not a legal partner in the plan.

Ownership an issue

Several unionized health care employees also attended the meeting to oppose the plan.

"It was a very open discussion about taking a public hospital and turning it into a private facility," said Norma Robinson, president of Local 1252 of the Canadian Union of Public Employees.

"It was taking the Charlotte County hospital and making it a stand-alone hospital away from the Department of Health," she said. "It would be a for-profit facility."

Higgins said the private company would have only run the research centre, not the hospital. It would have remained a public institution but would have been split from Horizon Health and run by a local board, she said.

Higgins provided CBC News a copy of a March 14 email from Cheney to Fulton in which he asked for "a letter of support in principle only supporting the concept." She said that proves the two entrepreneurs weren't looking for an ironclad agreement.

But an April 26 memorandum of understanding Instrum sent to the town used legal language and said the town would seek the "transfer" of the hospital to Maple Leaf Lodge.

Fulton and the mayor told the meeting they had been asked to sign a legal document, something they wouldn't do because they couldn't get the answers they wanted.

'High degree of mistrust'

Gardner said Instrum first approached the Concerned Citizens of Charlotte County group last year with a plan to split the hospital from the Horizon Health Authority and have it be governed independently by a local board.

But Gardner said the idea "migrated" to the private-sector plan involving the PTSD research centre and $50 million from investors.

Instrum wouldn't identify the investors,Gardner said, which made him increasingly uncomfortable.

"As a co-chair, when you're not given information, the alarm bells go off like crazy."

Instrum also said seven surgeons were ready to set up at the hospital, Gardner said, but refused to identify them.

"There was a very high degree of mistrust. When the story's changing and I can't get answers … I think I deserve to know what's going on."

Higgins, who was Gardner's co-chair, both played down and defended Instrum's involvement with the group.

"Jamal Instrum has nothing to do with the Concerned Citizens and what we tried to do for the Charlotte County hospital," she said.

But moments later, she said, "This man has worked very hard. He spent many, many months trying to help us."

Higgins would not say whether Instrum had been paid for his work for the group. "I would not want to discuss that unless I had approval from the rest of the committee," she said.

Moving on

At the June 5 meeting, Instrum gave the town 48 hours to sign on. Instrum and Cheney "would have given them [details of] the finances and all that if they had written a letter to say they were interested," Higgins said. "And they never did, so that was the end of it."

In the wake of Instrum's involvement, the Concerned Citizens of Charlotte County group has stopped functioning.

"As far as I'm concerned, we wasted two years for nothing," Higgins said. "Most of us have given up on doing anything to protect services at Charlotte County Hospital," Higgins said. "I've just decided I'm going to put my energy somewhere else."

Ed Zammit, another member of the group, said the proposal "could have been potentially a real gold mine for this area."

He would not comment on the status of the citizens' group.

"There are things going on that I can't discuss," he said.

Gardner said Higgins "really did an amazing job" for the organization for years but "basically, that group imploded" after the June 5 meeting.

Instrum told the gathering that if St. Stephen turned him down, he would "move on."

Sackville Mayor John Higham said around the same time, his town heard from Instrum about setting up the research centre at the Sackville Memorial Hospital.

But he said Instrum was vague about exactly what the town could do, given it doesn't own the hospital.

"That was unclear," Higham said. "That was one of our first questions."

Given the hospital is run by the province, Higham said, he decided "it wasn't appropriate for us to be following it much longer" and he didn't pursue the idea.