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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See also this original story.
Posted in Edgewater Casino
Tagged BC Liberals, BC Lottery Corp, BCLC, Christy Clark, conflict of interestt, crown corp, Edgewater Casino, FINTRAC, loan sharking, Michael Graydon, money-laundering, public interest, PV Hospitality, T. Richard Turner
Thanks again to Vancouverites for all their support in this fight! We stood up and became active citizens in a non-partisan manner, and we prevailed! It was a good moment for Vancouver.
What will our organization do now?
Our coalition will continue. We think the BC public needs to know the whole mega-casino story, which has not yet been fully told.
In particular, we demand that BC charities be properly funded out of the billions already brought in annually by existing gambling in BC. Over many years, struggling community charities in this province were forced to advocate for gaming expansion in exchange for a promised percentage of the take. They received not one dollar of the millions earned in that expansion. They were betrayed, and all of BC suffers while massive handouts are given to the gambling industry.
• Watch developments on the PavCo site at BC Place
• Monitor the BC government’s push, via the BC Lottery Corp, to massively expand gambling in BC
• Follow the unfolding story of the stadium roof and the way PavCo tied it to the casino plan, Paragon and the BCLC
• Inform the public of the massive lucrative cash incentives handed over to the casino industry, an amount that far surpasses the amount given in other provinces
• Call for a public accounting of the casino fight. How much did PavCo and BCLC – our public crown corporations – spend on their Edgewater mega-casino campaign, even before they had done public consultation? That was BC taxpayers’ money. How much was it? We demand to know.
• Protest the massive gaming revenue cuts to charities and arts in this province. State-sponsored gambling in BC has expanded rapidly and its revenues have skyrocketed, and hundreds of millions have been spent on sweetheart industry deals and money-losing vanity mega-development projects. Meanwhile, charity and non-profit services at the heart of every BC community were gutted, separated from that enormous gambling revenue without explanation. To think that gambling was expanded in BC ostensibly for the purpose of supporting those charities! For too long, BC charities and non-profits have been pressured into advocating for expanded gambling with the promise of funding, only to see zero return for that advocacy, then be handed massive cuts. Not only is this insulting; see Pete McMartin’s comparison with how it’s done in Alberta if you really want to feel annoyed.
Enough is enough!
Please tell all your local MLA candidates that funding charities, non-profits, sports and arts is an election issue for you. You may also want to ask them to promise to clean up a gaming ministry and industry that are clearly out of control. BC is the only province fined —and fined heavily—for its tolerance of criminal transactions by FINTRAC, the federal gaming regulation authority. The gambling industry in this province is a disgrace. We need a full public discussion about gaming expansion, especially in light of the rapid extension of online gambling through websites and smartphones.
For the November municipal elections, please remind your candidates that you don’t want gaming expansion in your region!
Vancouver Not Vegas says the Gaming Grant Review is a welcome opportunity to address the expanding crisis in BC’s non-profit sector.
FOR IMMEDIATE RELEASE:
Vancouver Not Vegas welcomes Premier Clark’s announcement of the provincial gaming review yesterday. “We hope that as a result of this initiative, charities and non-profits will never again have to shill for the gambling industry in British Columbia,” says VNV co-founder Sandy Garossino.
Charities and the communities they serve are entitled to a clear, fair and independent grant process, and not to be pitted against one another in a race for gambling revenues. Eligibility criteria and adjudication should meet broad standards of procedural fairness, and be free of interference by the political interests of any party.
Without public notice, debate or scrutiny, the provincial government instituted rapid gambling expansion as a silent pillar of tax policy, to the point that gambling revenues now exceed corporate taxes in BC. Unaware of the larger picture or the extent of the impact on communities, the charitable sector lent critical support to this strategy. It should have understood the bargain that it made and how hungry government would become for the non-profit share of revenues it controlled. Due to severe cuts to gaming grants, hundreds of charities find themselves on the brink of collapse. Even Vancouver’s venerable Children’s Festival found itself on life support in Spring 2011. British Columbians and their families see insufficient benefit from soaring gambling revenues.
“The system is broken. We must devise a better one for the public and for the charitable and non-profit sector that serves them,” says Lindsay Brown, VNV co-founder.
We look to Premier Clark to demonstrate the government’s good faith by granting emergency interim funding to sustain any organizations close to failure while we await the outcome of the review.
To see discussion of this issue, follow our Twitter (@vancityVegas) and also the Twitter hashtag #BCgaming.
Below: an example of the charities who benefit (or in many cases have benefited in the past but no longer do) from local gambling establishments.
Posted in Gaming grant cuts
Tagged arts, BC, BC Liberals, British Columbia, charities, Christy Clark, gaming cuts, gaming expansion, Gaming Grant Review, gaming grants, Memorandum of Agreement, non-profits, renegotiation, revenue sharing, Skip Triplett, sports
The Vancouver Not Vegas organization calls on Premier Clark to immediately suspend expensive advertising campaigns for the BC Lottery Corporation and invest that money in the almost 1,500 BC charities are non-profits that are on the brink of failure due to cuts in gaming grants and other government funding.
Premier Clark: Please truly put Families First by saving the Children’s Festival and other non-profits and charities.
Vancouver International Children’s Festival is at risk of closure after nearly 35 years. And hundreds of other festivals, organizations, charities and non-profits are in the same boat.
Money from gaming is simply not going to the charities and non-profits who were the justification for BC gambling expansion in the first place. Why are we seeing gaming funding removed from family festivals and other charities, and siphoned into projects like the BC Place Stadium Roof? What about the massive revenue increases for the BC Lottery Corp this past decade? None of those increases have gone to the charities and non-profits who made that expansion possible! Now they are shutting down all over the province. Premier Clark, please deal with this travesty. This is a breach of trust with the people of British Columbia. Use the BCLC ad budget if necessary.
While we would like to eventually see a de-linking of charities from gaming, and see them funded instead out of general revenue, for the time being we have no choice but to ask for charity gaming grants to be restored from existing gambling revenue. How can the government continue expanding gambling in this province in the name of charities, while withholding the percentage of revenue they were promised?
Full text of media release is below: