Monthly Archives: February 2014

Vancouver Not Vegas Calls on Province to Block Graydon Appointment

Vancouver Not Vegas Calls on Province to Block Graydon Appointment

Michael Graydon BCLC

Vancouver Not Vegas calls for the Gaming Policy and Enforcement Branch (GPEB) to refuse to recognize Michael Graydon as a qualified officer of the newly formed PV Hospitality ULC, due to the public perception that Mr. Graydon may have violated the Conflict of Interest Guidelines of the BC Lottery Corporation, and due to his possession of sensitive confidential information pertaining to Paragon’s competitors.

Further, Vancouver Not Vegas calls for the City of Vancouver to attach a restrictive covenant to the property’s Development Permit, permanently limiting the number of slots and gaming tables on the new Edgewater Casino site.

Finally, VNV calls for the BC Lottery Corporation to publicly disclose all financial projections and public subsidies associated with the proposed Edgewater Casino expansion at BC Place.

“Public trust and confidence in the integrity of the BC Lottery Corporation is at stake,” says VNV member Ian Pitfield.  “The corporation’s own Conflict of Interest Guidelines enjoin management from conduct which raises the perception of conflict. These rules are meaningless if there are no post-employment consequences for violations.”

“The City must respond to Mr. Graydon’s actions. Paragon  is building a casino that’s oversized by some 40,000 square feet, and the BCLC governs the number of slots and table licenses that will go there.” says VNV spokesperson Sandy Garossino. “Mr. Graydon’s defection raises grave concerns about his neutrality while at BCLC, and what promises may have been made to Paragon.”

According to previous financial projections associated with an expanded Edgewater Casino, the BC Lottery Corporation was scheduled to transfer $16.9 million annually to Paragon Gaming to off-set construction costs.  PavCo has re-negotiated a 50% lease reduction to $3 million annually. No projections of increased revenues (net of revenue losses to other local casinos) to the BCLC have been made public.

BCLC Conflict of Interest Guidelines
http://corporate.bclc.com/content/dam/bclc/corporate/documents/soebc-for-employees.pdf

Gaming Control Act:
http://www.bclaws.ca/Recon/document/ID/freeside/00_02014_01

Deloitte report showing $16.9 m in construction subsidy: http://vancouvernotvegas.ca/wp-content/uploads/2011/03/Deloittes-Economic-Report-Entertainment-Complex.pdf  P. 8

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Media contacts:

Sandy Garossino
Please TEXT queries to:
778-231-5230

Ian Pitfield
604-828-5494

Brazen Conflict of Interest by Former CEO Exposes Feeble Governance at BCLC

Michael Graydon BCLC

FOR IMMEDIATE RELEASE: Vancouver, Feb. 7, 2014

Brazen Conflict of Interest by Former CEO Exposes Feeble Governance at BCLC

The resignation of Michael Graydon as CEO of BC Lottery Corporation (BCLC) to assume the role of president of PV Hospitality ULC in which Paragon Gaming Corporation is a partner raises serious conflict of interest and BCLC governance concerns says Vancouver Not Vegas.

“It’s a grave concern that the BCLC, which oversees an industry requiring the highest standard of integrity and transparency, would permit a departure of this kind from expected ethical standards”, says founding member Ian Pitfield.

“The Federal Government applies post-employment restrictions to public office holders.  Why should the Province not insist on the same restrictions for senior employees of Crown Corporations?” Pitfield asks.

The Vancouver Not Vegas coalition calls for an investigation into the circumstances surrounding this move, and asks the BC government to answer the following questions regarding this and other governance issues within BCLC (BC Lottery Corp):

  • When did Michael Graydon begin employment discussions with Paragon, a company of which he was the regulator?
  • What assurances or commitments did he make to Paragon, his future employer, while he was in discussions with them concerning compensation, terms, etc?
  • What knowledge did the BCLC have of employment discussions between Graydon and Paragon, and did it approve it?
  • Why, after BCLC chair Richard Turner bought shares in Paragon Gaming in 2004, did the BCLC not institute a firewall policy preventing employment or financial relationships between senior executives. board members and regulated corporations?
  • Senior management at BCLC are in possession of significant confidential financial information pertaining to all gambling operators in BC. It’s unthinkable that it has failed to safeguard that trust by preventing conflicting employment agreements for senior executives.

It is unthinkable that BCLC has failed to safeguard the trust by prohibiting key employees from assuming employment with regulated gaming companies for a period of two or three years following retirement or resignation. But today’s news is only one chapter in a history of governance breakdowns.

Documented lapses in governance at BCLC include:

  • Unprecedented $700K FINTRAC fine in 2010
  • Documented loan-sharking, money-laundering in casinos
  • BCLC Chair Richard Turner’s acquisition of shares in Paragon in 2004, and subsequent move to become director.

Today’s revelation, combined with a repeated pattern of inept governance points to a rudderless corporation unable to exercise basic control over its key operations.

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Media contacts:

Sandy Garossino
Please TEXT queries to:
778-231-5230

Ian Pitfield
604-828-5494

http://vancouvernotvegas.ca
See also this original story.