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Michael Graydon of Paragon Gaming is pictured on the site where the company plans to build an urban resort featuring a casino next to BC Place in Vancouver.

Ben Nelms/The Globe and Mail

The B.C. Lottery Commission has asked former chief executive officer Michael Graydon to pay back about $55,000 in salary he was paid before leaving that job for a private-sector position.

The request, made in a July 11 letter to Mr. Graydon from a lawyer representing the BCLC, follows a government review – released on July 10 – that found Mr. Graydon was in a conflict of interest when he took a management position with an affiliate of Paragon Gaming, a Las Vegas-based company that operates the Edgewater Casino in Vancouver and wants to build a new "urban resort" next to B.C. Place.

"Given the findings of the [review] that Mr. Graydon was in a conflict of interest for two months prior to his departure, which he failed to disclose, BCLC has requested that Mr. Graydon repay the two months' salary for the notice period and salary holdback he received," BCLC spokeswoman Laura Piva-Babcock said Thursday in an e-mail.

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After taxes and other deductions, the net amount paid to Mr. Graydon over the notice period was $55,171.20, which is the amount BCLC has requested he repay, she added.

BCLC has not requested repayment of a $30,960 vacation payout because "Mr. Graydon was legally entitled to that amount," she said.

The letter asks for the money to be repaid within 10 days.

Mr. Graydon did not immediately reply to a request for comment made through Paragon Gaming.

Conflict-of-interest concerns surfaced nearly immediately after Mr. Graydon moved to his new position as president of PV Hospitality, a partnership between Paragon Gaming and 360 Vox, a publicly traded company, on Feb. 7.

In a statement announcing his appointment, the partnership said Mr. Graydon's first priority would be "oversight and operations of Vancouver's new world-class urban resort next to B.C. Place." That project is supposed to become the new home of Edgewater Casino, a Vancouver operation that is part of the BCLC system that was under Mr. Graydon's management until he resigned.

BCLC had announced Mr. Graydon's resignation about a week earlier, on Jan. 30.

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Finance Minister Michael de Jong ordered a review of the appointment on Feb. 7. The review found the former CEO was in a conflict of interest during the two months before he left BCLC, but found no evidence that he or his new employer benefited from the conflict.

"Mr. Graydon had limited involvement in the day-to-day operations of casinos … but was the person ultimately responsible for the oversight and management of commercial gaming," the review said. "As CEO, Mr. Graydon would, and did appropriately have a role in facilitating strategic and high priority initiatives such as the Edgewater Casino relocation."

As a result of the review, BCLC is expected to implement one-year post-employment restrictions for its next CEO and senior executives.

Paragon has proposed building a $535-million "world-class urban resort" that would feature two hotels, a conference centre, restaurants and shops, and be the new home of the Edgewater Casino. That operation, which Paragon acquired in 2006, currently operates at a nearby site. Paragon had proposed building a significantly bigger casino at the new location, but after a public backlash, the city in 2011 approved relocating the casino but ruled out expanded gambling operations.

The city approved rezoning for the urban resort site, with some conditions, in December, 2013. A building permit application process is under way.

In the letter below, the B.C. Lottery Corporation asks through its lawyer that former chief executive officer Michael Graydon pay back about $55,000 in salary he was paid before leaving that job for a private-sector position. Full story here

Michael Graydon Lawyer Letter

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