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.