Several days have passed since the storm that blew through Queen’s Park regarding the expense accounts of senior executives at the Ontario Lottery and Gaming Corporation, and some are asking: what was gained?
If there was any doubt, the unceremonious firing of CEO Kelly McDougald paired with the en masse resignation of the OLG board has reinforced that public sector employees should be good stewards of public money.
Ontario Premier Dalton Mc-Guinty said he was making an example of the Crown corp.: “If you fail to abide by the rules, there will be consequences.”
An integrity commissioner will review expense claims by employees at the province’s 23 largest arm’s-length agencies, commissions and boards — and an external review of all 600 arm’s length bodies is meant to ensure accountability.
Experts say that in this era of increased transparency, triggered by a recession that was caused, to some degree, by a lack of oversight, it is no wonder that governments are keen to leave an impression of zero tolerance.
Many in the province are still talking about the scandal at eHealth Ontario over untendered contracts, and many speculate that uproar had a lot to do with the government’s decision to release the expense reports of senior OLG executives before the opposition did.
Optics are everything, and leaders are jumpy.
“I think this is a reflection of that trend, and maybe an over-reaction, but nevertheless the zeitgeist of the times is that you’ve got to be squeaky clean,” said Karl Moore, associate director of advanced leadership at Montreal’s Mc-Gill University.
Others say there is danger of creating a scandal where there isn’t one.
“It’s highly unlikely to find a well-run organization that would go on a witch hunt over something like this. It’s the ‘off with the heads,’ or ‘heads have got to roll’ kind of thing that is very unusual,” said Jeffrey Gandz, managing director of the executive development program at the Richard Ivey School of Business, in London, Ont. “It’s hardly likely to attract people to work in government service or people to consult with government. Who wants to be subjected to this kind of kangaroo court?”
He tempers his comments by saying he knows only as much as has been made public, and it may be that the government was wholly justified in its reaction. He places some of the blame on the media for splashing suggestions of lavish expenses on the front page without providing any analysis.
OLG has faced its share of problems, namely a controversy over insider wins that Ms. McDougald had been hired to help clean up.
Finance Minister Dwight Duncan described the expenses as “a symptom of a larger problem with this organization,” and some say action should have been taken long ago to instill discipline.
“We expect public sector to be more frugal than we expect business to be,” said Prof. Moore, from McGill, however agencies such as OLG are “out there trying to make money and sometimes you have to spend money to make money.”
The expense reports showed that senior executives expensed fancy dinners with colleagues — including alcohol tabs — and had to provide little explanation for approval. One account executive billed thousands of dollars to entertain clients, such as convenience store chains, on the golf course and at hockey games, even though the lottery corporation has a virtual monopoly on gaming in Ontario.
In many cases, it appears the rules were followed, but Kevin Gaudet, director of the Canadian Taxpayers Federation, said it is the breadth and depth of the expenses that warrant outrage.
“It’s clearly the case that individuals think they’re entitled to a great extent to charge what they want, when they want,” he said. “Why is the monopoly wooing other businesses? Because they can. It’s not their money.”
He said the province has created more bureaucracy to deal with expenses and done nothing to change a culture that made it OK to splurge on the taxpayer’s dime.
The public is attuned to the fact these sorts of trangressions are recurring, said Charles Cirtwill, executive vice-president at the Atlantic Institute for Market Studies, and it’s the government’s challenge to find a response that addresses the cultural, systemic problems behind them.
“There is a danger that in responding to these kinds of loss of control on the purse strings, that they’re going to take away the purse entirely, and that’s not appropriate because there are justifiable expenses also.”