TORONTO - Finance Minister Dwight Duncan pressed the reset button on Ontario's troubled lottery and gaming agency Friday by installing a new board with National Post CEO Paul Godfrey at the helm.
The well-known Progressive Conservative took over this week as chairman of the Ontario Lottery and Gaming Corp. Scandals at the agency over insider wins and executive expenses have dogged the Liberal government for years.
Duncan named five new board members Friday, including Dale Lastman -- son of flamboyant former Toronto mayor Mel Lastman -- ex-Toronto bureaucrat Shirley Hoy, Onex Corp. co-founder Anthony Melman, tax expert Thomas O'Brien and chartered accountant William Swirsky.
The board, which still has several empty seats, will meet for the first time next week to start looking for a chief executive to run the agency, Godfrey said.
The new recruits represent an "excellent mix of business and social leaders" who will work at improving accountability and "turning the page" on past scandals, he said.
Godfrey, who got the nod in November to take the OLG reins, said he believes the agency has shaped up based on his talks with senior staff over the last few weeks.
"I can't un-ring the bell of what went on in the past," he said. "I can only start today and look forward."
Godfrey said he'd like to explore new ways to boost revenues, such as Internet gambling, but will leave the question of allowing mixed martial arts fights in Ontario to the government.
Premier Dalton McGuinty sparked an Internet backlash from irate MMA fans earlier this week by dismissing the idea.
"I see areas that I would like to look at, but to jump in on the first day and say, 'Well, I'm going to do this, this and this' would be irresponsible until I get some time here to look at details," Godfrey said.
The OLG, which rakes in about $6.5 billion in revenues a year, has been plagued with problems ranging from questionable insider wins, botched scratch-and-win tickets, malfunctioning slot machines, lawsuits from gambling addicts, and a controversial casino power plant that ended up costing taxpayers a whopping $80 million.
Its troubles culminated last August, when Duncan cleaned house by firing then-CEO Kelly McDougald and announcing the entire board had been replaced by senior provincial bureaucrats.
That same day, Duncan released thousands of pages of what he called "unacceptable" expense claims filed by lottery executives, which included expensive dinners, gym and golf clubs memberships -- even a $1.12 grocery bag.
McDougald retaliated with a $8.4-million lawsuit, claiming she was fired because she refused make public scapegoats of other executives as the government tried to contain another expense scandal at eHealth, the agency tasked with bringing health records online.
The matter was quietly resolved in December with out-of-court cash settlement worth $747,925.
NDP Leader Andrea Horwath said the latest rash of appointments at the OLG are the strongest signal yet that the government intends to sell it to tame an unprecedented $25-billion provincial deficit this year.
Lastman's job at the Goodmans law firm includes providing advice on mergers and acquisitions, while Melman helped create Onex, a conglomerate known for its takeovers and restructurings.
"It's a group of folks largely who have the skill set necessary to achieve a privatization of the OLG," Horwath added.
"I certainly hope it's not going in that direction, but that team looks like it could pull something like that off."
She also took a swipe at Godfrey's role as the latest white knight dispatched by the Liberals to turn the OLG around.
"I think we have to look at his past record -- in terms of the National Post, in terms of the Blue Jays -- and hope that he does better this time around," she said.
Godfrey, who will keep his job at the Post newspaper, said he wasn't specifically told to prepare the OLG for a sale when he was asked to serve as its chairman.
"If OLG was for sale, would I buy it?" he joked. "If I had the money, I'd probably buy that. Maybe an NFL football team too."
Godfrey, who received the Order of Ontario last month, landed at Canwest's flagship newspaper a year ago after leaving his post as head of the Toronto Blue Jays baseball team.
Most of Canwest is currently under creditor protection, with the exception of the Post and its specialty channels. The company has been working to sell off the Post and its major chain of Canadian newspapers, including the Montreal Gazette and Ottawa Citizen, before the restructuring under court protection is completed.
Prior to the Jays, Godfrey headed a 1996 management-led buyout of what was then the Toronto Sun Publishing Corp., which was later purchased by Montreal-based Quebecor Inc. (TSX:QBR.B) and became Sun Media.
The OLG will benefit from having board members with solid business experience, like Godfrey, said Progressive Conservative critic Norm Miller.
"They're going to need that experience to clean up the mess that the McGuinty government has created at the OLG," he said.
The government said it will fill the remaining board seats in the coming months.
