VICTORIA – When the former head of British Columbia’s Lottery Corporation quit his job, he was given a $125,000 severance package, walked directly into an industry-connected position, yet maintained access to the Crown’s information systems for 10 days.
The information was released in a government audit Thursday that concluded Michael Graydon was in a conflict of interest, but Finance Minister Mike de Jong said the probe found no evidence of confidential information being inappropriately used by Graydon or his new employer.
De Jong said he supports the report’s recommendations to ensure tighter guidelines and procedures for departing top-level employees in government and the corporation.
Graydon left the corporation last February to become president of the newly formed PV Hospitality ULC.
That prompted Opposition New Democrat questions in the legislature about the timing of the move, especially since the company was affiliated with Paragon Gaming Inc., the developers of the casino project adjacent to BC Place.
Graydon’s severance and final payout package of about $125,000 also raised questions, especially since he immediately walked into an industry-connected position.
The 10-page audit found Graydon was in a conflict of interest because he should have disclosed to the corporation’s board of directors he was in employment talks with an affiliate of Paragon Gaming. It also said his prospective employment provided him with an economic interest.
“This interest could be considered significant enough to at least establish a reasonable apprehension that it would influence the duties and responsibilities of a CEO of BCLC,” stated the audit.
“As CEO, Mr. Graydon would and did appropriately have a role in facilitating strategic and high priority initiatives such as the Edgewater Casino relocation and the proposed Surrey Casino development.”
The audit stated it “found no evidence of Paragon Gaming or Edgewater Casino receiving preferential treatment.”
But the audit raised concerns about Graydon’s exit from the corporation, especially keeping his company mobile devices even though BCLC policy calls for the termination of remote access one business day after departure.
“Michael Graydon’s BCLC system accesses were not terminated until 10 days later,” stated the report. “Outgoing emails were sent via his BCLC email account on February 5 and 6 demonstrating that the access and information had not been properly secured.”
The audit stated BCLC was not able to demonstrate that Graydon’s mobile devices were cleansed of data, but “there was no evidence of confidential information being inappropriately used.”
De Jong said he has concerns about the audit with regards to improving exit strategies of employees in senior positions. But de Jong did not immediately suggest there will be consequences at the corporation over Graydon’s departure.
“They reveal a very senior official conducted himself at the time he was in charge of a Crown corporation in a manner that was both inconsistent and fell short of the standards one would expect,” he said.
In a statement, Graydon said he read the audit and accepts its findings and supports the recommendations.
“While the auditors found no evidence of my current employer receiving preferential treatment, and no evidence of any confidential information disclosed, I understand that a perception of potential conflict was created, and for this I apologize,” the statement said.
BCLC board chairman Bud Smith said in a statement the corporation is developing a plan to address the audit’s recommendations. Smith’s statement said it was acting on information provided by Graydon during his tenure.
“The board made decisions on the handling of Mr. Graydon’s resignation based on the information he provided to us at the time,” said Smith’s statement. “The review shows that the information provided by Mr. Graydon to the board and BCLC was incomplete, and or inaccurate.”
Opposition NDP gaming critic Shane Simpson said he’s looking to de Jong to hold people accountable for the audit’s findings.
“This is a combination of incompetence and negligence, and the minister’s got to tell us what he’s going to do about it,” he said. “It’s just not good enough to say, ‘we’ve go it all fixed now and it will be fine in the future.'”
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