Lotto shakeup looms

Lotto shakeup looms

August 29, 2009
Rob Ferguson
Robert Benzie
Queen's Park Bureau

The Liberal government is set to clear house at the troubled Ontario Lottery and Gaming Corporation in a mad scramble to pre-empt another eHealth-style spending scandal, the Star has learned.

Three informed sources said OLG chief executive Kelly McDougald is fighting for her $400,000-a-year job, which she got two years ago with a mandate to reform the error-prone monopoly that oversees everything from casinos to the popular Lotto 6/49.

Sources said late yesterday that the Liberals hope to short-circuit an expected onslaught from the Progressive Conservatives when the Legislature returns Sept. 14 and are concerned about the impact of any new controversy on the Sept. 17 by-election in the mid-town Toronto riding of St. Paul's.

"Something big is up," a senior government official confirmed.

"By next week, OLG will look much different. And by the time this is over, they'll be forced to clean up their act."

McDougald has already been reprimanded by the Liberals for a series of problems at the gambling agency – including awarding foreign-made Mercedes-Benz cars as casino prizes at the same time as the province was bailing out General Motors and Chrysler.

An audit last winter also found:

A Good Samaritan treated shabbily when he tried to turn in a cache of lost tickets;

A malfunctioning slot machine erroneously informing a player he'd won $42.9 million when the maximum payout was $9,025;

A misprinted scratch-and-win ticket that led a man to believe he had won $135,000 when he hadn't.

But the straw that broke the camel's back appears to be Liberal fears of a reprise of the eHealth Ontario debacle at OLG.

The Tories, repeating their successful strategy that exposed spending run amok at the electronic health records agency, are seeking thousands of pages in OLG documents under freedom of information legislation.

Records sought include expense accounts of senior executives, spending on leased, owned and rented venues, such as luxury boxes at sports stadiums, contracts for consultants as well as travel costs.

So far, the Tories have been stonewalled in their request for information as the Liberals try to beat them to the punch by taking pre-emptive action.

"The concern is she's been running OLG like it's a private-sector company when it's a government agency," said one Liberal insider.

McDougald was not in her office yesterday afternoon and did not return emails and calls from the Star.

She was put in the top job after previous troubles at the Crown agency, where it was found that lottery retailers, employees and their families won $198 million in prizes over 13 years, dating from 1996.





"Any CEO that's running a large organization under public scrutiny certainly feels under the gun," McDougald, a former Bell Canada and Nortel executive, told the Star in March.

OLG officials were also unavailable for comment yesterday.

The Liberals were reluctant to talk on the record because negotiations on the future of the OLG executive team are expected to continue through the weekend and into next week.

Premier Dalton McGuinty issued warnings to government agencies like OLG in the wake of the eHealth scandal – which saw consultants paid $2,700 a day while expensing $3.99 bags of cookies to taxpayers – that such spending no longer passes the sniff test and must stop.

Tory MPP Norm Miller (Parry Sound-Muskoka) said the party has been trying since January to glimpse the inner workings of OLG.

"So far, we've been getting rebuffed. It certainly looks a lot like eHealth because with that we had to be very persistent – it wasn't just ask once and get the information. It certainly makes us suspicious."

Miller said the Tories targeted OLG because the organization "has had quite a few problems."

He added that voters would likely see through any OLG shake-up that seemed to be politically motivated.

The eHealth scandal continues to dog the Liberals, who are watching the issue resurface in the St. Paul's by-election.