Ont. gov't scrambles to control OLG scandal damage
Published Monday, August 31, 2009 8:39PM EDT
Premier Dalton McGuinty will be returning early from a holiday break to speak on the latest scandal involving board members of a provincially-controlled organization and how his government intends to rein in such spending.
The entire board of the Ontario Lottery and Gaming Corp. (OLG) resigned Monday. They were replaced temporarily by provincial civil servants. Their first act involved the firing of Kelly McDougald, the agency's CEO.
"I am disappointed with what has been brought to my attention," Finance Minister Dwight Duncan told a news conference on Monday. "The expenses are a symptom of a much larger problem."
McDougald was "dismissed with cause," Duncan said and therefore will not receive a severance package. Former board chair Michael Gough said he wasn't asked to quit, but did offer his resignation last Thursday.
The Liberals publicly released two years worth of expenses that were filed by OLG board members. They include:
- gym memberships worth $250
- Weight Watchers memberships
- club link golf fees
- a $1,500 bar tab at a $3,700 dinner for 38 people
- a $500 nanny fee so that a vice-president member could attend meetings, an amount since repaid
The OLG acknowledged Monday that the spending was unacceptable for a public agency.
In the fiscal year that ended on March 31, 2007, OLG had more than $6 billion in revenues, with net income of about $1.7 billion.
Duncan, who took on responsibility for OLG said the government is launching a province-wide review of accountability procedures for the government's agencies, boards and commissions. He hinted a new "mechanism for accountability" would be able to offer early detection of brewing problems, he suggested.
He also dropped another bombshell -- OLG had been issuing untendered contracts.
Such contracts were a major part of the controversy surround eHealth Ontario, the electronic health records agency that also saw its CEO and board chair depart after revelations of excessive spending and the issuing of sole-source contracts.
McGuinty announced the end of sole-sourced contracts and new restrictions on the types of expenditures for which consultants can seek reimbursement.
"This is the right (step) to take in terms of the public and across government, we need to make sure that we have rigorous accountability for all Crown agencies," Duncan said.
Opposition MPPs say the reason the government is acting now is because Monday was the deadline for releasing the results of Freedom of Information requests made by them months ago.
Progressive Conservative Leader Tim Hudak said the newest scandal shows the McGuinty government isn't in control.
"Dalton McGuinty said the eHealth scandal was the exception to the rule. What we learned today is that it is the rule," he said.
"They went out and fired the last group and brought in a group to clean it up. And this group seems to be even better at getting into the pork barrel," said the NDP's Michael Prue.
McDougald had joined OLG in 2007.
Controversy plagues OLG
The gaming corporation has been scrutinized for the last two years after questionable insider wins, malfunctioning slot machines, spoiled scratch-and-win tickets and a controversial decision to purchase foreign cars as lottery prizes at a time when the Ontario government agreed to a financial bailout for its struggling auto industry.
An audit of the OLG was completed in February. The corporation had until September to report to the ombudsman about changes it had made to improve accountability.
"We've been trying to create change in this place for some time," Duncan told reporters. "Frankly I'm not satisfied with performance to date at the OLG so we took steps over the course of the last few weeks to ensure that the direction given in the past is followed moving forward."
The temporary board "will work with a mandate to maximize OLG's performance," said Duncan.
He added that he hopes the OLG will operate with "better oversight and better credibility" in order to "enhance taxpayer protection."
The shake-up comes just weeks ahead of a provincial byelection in the midtown Toronto riding of St. Paul's, which has been a Liberal seat since 1999.
With a report from CTV Toronto's Paul Bliss and files from The Canadian Press