Ontario Lottery expenses scandal

CEO and board of directors to be replaced as expenses scandal breaks

Sources who predicted massive changes in the management of the provincial lottery Ontario Lottery nd Gaming Corporation over the weekend were spot-on, it appears. The Toronto press Tuesday was replete with news that Finance Minister Dwight Duncan has been cleaning house.

The Globe and Mail reported that the OLG is embroiled in a scandal over allegations involving expense claims, travel and entertaining by the top echelons of the corporation. The newspaper goes on to reveal that on Monday Duncan announced the resignation of the entire board of directors of the lottery corporation, saying that the expenses billed by executives and employees of the lottery corporation are a symptom of a much larger problem.

The announcement was followed by the immediate appointment of an interim board, which dismissed Chief Executive Officer for the past two years Kelly McDougald for cause, apparently without severance pay.

“I'm not satisfied that the corporation's assets are being maximized,” Duncan told reporters in explaining why the new interim board of the lottery corporation dismissed the CEO.

When she was appointed CEO of the lottery corporation two years ago, McDougald inherited an entity that had been at the centre of a scandal over the unusually high number of retailers winning lottery prizes . The former executive of Bell Canada was given a mandate to bring about cultural change at the agency and lead it towards achieving “the highest standards of integrity, transparency, accountability and responsiveness,” according to a September, 2007, news release announcing her appointment.

Minister Duncan said Monday that the expenses billed by employees at the lottery corporation are a symptom of bigger problems. The government relies on the corporation for a key source of revenue – it paid the province a dividend of $1.8-billion last year.

The story looks set for more disclosures and probably has a way to run yet.

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