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Michael Graydon left his job as B.C. Lottery Commission president to join Paragon Gaming – a company he dealt with at BCLC. (Ben Nelms/The Globe and Mail)
Michael Graydon left his job as B.C. Lottery Commission president to join Paragon Gaming – a company he dealt with at BCLC. (Ben Nelms/The Globe and Mail)

Former Lottery Commission head’s new gaming role prompts conflict of interest probe Add to ...

B.C.’s Finance Minister has ordered a review of dealings between former B.C. Lottery Commission (BCLC) president Michael Graydon and the Las Vegas-based gaming company he went to work for to see if there are any conflict-of-interest concerns.

“The review will focus on any potential conflicts of interest or breaches of confidentiality that may have occurred prior to, or subsequent to, Mr. Graydon’s acceptance of an employment position with [PV Hospitality],” Finance Minister Michael de Jong said in a letter to BCLC chair Bud Smith that was dated Feb. 7 and released Wednesday in the legislature.

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The Finance Ministry’s internal audit division will conduct a review “in keeping with the province’s mandate to ensure the integrity of B.C.’s gaming industry and to ensure that taxpayers’ interests are protected,” the letter said.

Whatever its findings, such a review may not have been required if Mr. Graydon had been subject to the same conflict-of-interest rules that apply to cabinet ministers and senior bureaucrats in B.C. Those rules impose a “cooling off” period before former government employees can go to work for or lobby on behalf of companies they had significant dealings with during the year before they left their government job.

Those restrictions do not apply to heads of Crown corporations.

Last year, a legislative committee considered whether B.C.’s Members’ Conflict of Interest Act should be extended to CEOs of Crown corporations because “they are privy to confidential information and may potentially exert influence over policy decisions and legislative initiatives,” said the report, which was completed last March.

But the committee stopped short of recommending such a change and instead encouraged government to work with boards of Crown corporations to “review the adequacy of existing guidelines.”

Questions about Mr. Graydon’s appointment have been swirling since Feb. 7, when PV Hospitality – a newly formed partnership between Paragon Gaming and 360 Vox Corp. – announced it had appointed him as president. Paragon Gaming is a Las Vegas-based company that wants to build a $535-million urban resort next to B.C. Place. Publicly traded 360 Vox teamed up with Paragon last year as a partner in the project.

Tamara Hicks, a spokeswoman for Paragon Gaming, said Wednesday in an e-mail that the company welcomes the review and hopes it will put speculation to rest.

In an interview Tuesday – before Mr. De Jong announced his review – Mr. Graydon maintained there would be no such conflicts.

“My dealings with Paragon are really consistent with the dealings I had across the entire set of partners we have in the province,” Mr. Graydon said Tuesday. “There is no special arrangement with any one particular provider. Each [partner] works under an operating agreement and that agreement is consistent with each and every operator in the province.”

Mr. Graydon also noted that B.C.’s Gaming Policy and Enforcement Branch – not BCLC – is responsible for regulating the industry.

B.C.’s Members’ Conflict of Interest Act includes a 24-month “cooling off” period that prohibits cabinet ministers from taking any government-approved contracts for two years after the date when they cease to hold office.

Senior managers in B.C.’s Public Service – which includes employees in provincial government ministries and agencies such as Elections B.C. – are subject to post-employment restrictions that include a one-year ban on taking a job with any company with whom they had “substantial involvement” during the year prior to leaving the job.

BCLC does not have any such restrictions.

Under federal conflict-of-interest rules, Mr. Graydon would be considered a cabinet appointee and sowould be covered by conflict-of-interest regulations that put a one-year ban on government employees taking a job with companies they have worked with in their past year of employment, says Duff Conacher, a board member of Democracy Watch.

He calls the lack of post-employment restrictions at BCLC and other Crown corporations a “huge loophole” and would like to see longer cooling-off periods assigned on a sliding scale based on one’s responsibility while in government.

Under such a system, a backbench politician who sat on only a few committees would be subject to a shorter cooling-off period than someone such as Mr. Graydon, who had extensive dealings with senior officials during his time as the head of a Crown corporation and would be subject to a ban of up to four or five years, Mr. Conacher said.

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