MICHAEL STUPARYK/TORONTO STAR
Sep 01, 2009 04:30 AM
Tanya Talaga
Queen's Park Bureau
The Liberal government has fired the CEO of the Ontario Lottery and Gaming Corp. in a desperate, pre-emptive strike to stop a Progressive Conservative attack on what the opposition says is the government's inability to oversee spending in provincial agencies.
The entire board of directors has also resigned. Finance Minister Dwight Duncan yesterday announced sweeping changes at OLG after holding up the Conservatives' request for thousands of pages of documents for two weeks, the Tories say.
Kelly McDougald, who was brought in by the Liberals in October 2007 to clean up the scandal-plagued OLG, was cut loose from her $400,000 a year job, with cause, according to Duncan. She will not receive a severance package.
Premier Dalton McGuinty has ordered a review of all government agencies to root out spending abuse.
Duncan released five large binders containing the Tories' request on OLG expenses. The binders hold pages of receipts for such expenses as a lavish $3,713.77 dinner and The Sound of Music night for 38 people.
Many of the entertainment expenses include alcohol charges. There are government rules and regulations surrounding liquor expense claims. In 2007, the OLG asked for an exemption from those rules, but it was refused. Sources say the liquor expenses are part of the reason Duncan asked the auditor general to investigate.
The documents also show taxpayers were dinged $7.70 for a pen refill, $1.12 for a cloth grocery bag and $30 for a car wash.
The binders released yesterday by Duncan detailed spending abuses, but did not address how contracts are tendered and how consultants are hired at the agency. The Liberals sustained heavy political damage when they awarded former eHealth Ontario CEO Sarah Kramer $317,000 in compensation after she left her position in early June on the heels of a spending scandal at the agency involving nearly $16 million in untendered contracts and high-priced consultants. Duncan has asked Auditor General Jim McCarter to review all expense practices at OLG. The province will also review spending habits at all provincial agencies, boards and commissions.
McGuinty will hold a special briefing with reporters on the matter this morning
"I am disappointed with what has been brought to my attention," a sombre Duncan told reporters. "The expenses are a symptom of a much larger problem. The OLG has a long history of issues and we are taking action today to ensure the protection of taxpayers' money and increase the accountability of the organization."
Vacated board positions are being filled, on an interim basis, by senior Ontario bureaucrats. Bohodar Rubashewsky, an assistant deputy minister of energy and infrastructure, has replaced McDougald.
The coming storm at OLG was reported in the Saturday Star after it was learned McDougald was fighting for her job. She was brought in to reform the error-prone monopoly that oversees everything from casinos to Lotto 6/49.
Earlier this year, McDougald took heat from the Liberals for a series of problems at OLG, including the awarding of foreign-made Mercedes-Benz cars as casino prizes at the same time the province was bailing out General Motors.
McDougald could not be reached for comment yesterday.
Business experts said last night the kind of expensing seen at OLG would not likely be tolerated in the private sector in Canada.
Theo Peridis, professor of strategic management at York University's Schulich School of Business, said companies would rarely ? if ever ? pay for dry cleaning, pen refills, cloth grocery bags and other out-of-pocket expenses.
"Those are phenomenally petty, trivial expenses for someone who is making serious money," he said. "The rest of us pay out of our pockets for all of these things. Although it's hard to know the exact story, certainly on the face of it, it sounds petty, cheap and definitely not something that any one of us would be proud of."
Rick Powers, associate dean of the University of Toronto's Rotman School of Management, said things like golf club memberships and car allowances are standard perks for senior private-sector executives.
"What is troubling here is the small items, the nickel-and-diming that seems to go on," he said. The Tories say Duncan's news conference was a result of freedom-of-information requests they made about OLG eight months ago. They say the Liberals have held on to the FOI results for nearly two weeks. The Tories have also requested information on consultants' contracts at OLG but have been told the request would cost them $5,000.
"This is the tip of the iceberg. You have eHealth and you have this," said PC MPP Peter Shurman (Thornhill). "In the future, you can expect to see more."
Conservative Leader Tim Hudak said only a minister's resignation will "bring an end" to the OLG's problems.
Duncan has had jurisdiction over the agency only since June, taking over for deputy premier George Smitherman.
The Legislature reconvenes in two weeks and the auditor general is to release his report on eHealth Ontario before that.
New Democrat MPP Michael Prue said the auditor's review should include what previous Liberal ministers in charge of OLG, namely David Caplan and Smitherman, knew about the problems.
Duncan said he first found out about the OLG situation days after taking over the portfolio.
Meanwhile, some of the board members who left the organization came out swinging yesterday.
"I did this for public service," board member Michelle Samson-Doel, a chartered accountant, told the Star.
Samson-Doel said the board repeatedly asked the government for more members to do the work. She resigned last week. "There was only six directors for a huge corporation," she said. "I wasn't doing it for the money. We asked for more directors. We have done everything we possibly could."
Former board member Marlene McGraw echoed Samson-Doel. "Several months ago, our board advised the government that important changes were needed to strengthen our board and its effectiveness as part of a major, ongoing transformation process," McGraw said in a statement to the Star. "This advice was not acted on and therefore I believe it is now time to resign from the board."
The OLG expense claim reports cover executives and senior-level staff from January 2007 to December 2008.
"Clearly, some of these expenses are unacceptable," the OLG said in its own statement.
In 2007, Ontario Ombudsman Andr? Marin reported the OLG had allowed unscrupulous retailers to collect tens of millions of dollars in dishonest insider winnings.