The CBC reports that Ontario cleans house at the OLG:
Ontario's finance minister has fired the head of the Ontario Lottery and Gaming Corporation and accepted the resignations of the entire board of directors in an attempt to head off another scandal.
Dwight Duncan told a news conference at Queen's Park on Monday that he was "taking action to ensure protection of taxpayers money."
Duncan said there had been problems with expenses and they represented "symptoms of much larger problems" at OLG.
The corporation's CEO, Kelly McDougald, was fired "for cause," said the minister. The entire six-member board stepped down.
The provincial auditor general has been asked to conduct a thorough review of OLG expenses.
Both McDougald and the board members were brought in to clean up the scandal-plagued organization.
Duncan released two years' worth of expense claims filed by OLG executives and senior staff that include questionable claims filed by executives going back years.
They included the cancellation of a deposit on a Florida condo by Michael Sharland, the OLG's former vice-president of security and surveillance who took a paid leave of absence in 2007.
Another OLG executive charged the agency nearly $500 for a nanny so that she could attend meetings during a four-month period in 2006.
Other senior staff billed the agency for small items like a $7 pen refill, a $1.12 cloth grocery bag and a $30 car wash.
Hudak calls for Duncan firing
Weekend reports suggested that a freedom-of-information request by the provincial Tories is behind the shakeup.
The Progressive Conservatives made a number of requests concerning the spending habits of OLG executives.
Duncan's announcement on Monday is an apparent attempt to deflect the results of those inquiries.
Shortly after Duncan's announcement, the Conservative leader levelled a number of scathing criticisms at the Liberal government called for the finance minister to be fired.
"The minister came forward with his phony remorse today simply because he got caught," Tim Hudak told reporters Monday afternoon.
The Tories had asked for information on the spending, Hudak said. The Liberals "knew it would be coming up in the opening session of the legislature, [so they] put it out today to head off the scandal," he said.
"But quite frankly, you can switch one Liberal hand-picked CEO with another one. But you're not going to stop the scandalous spending until [Premier Dalton] McGuinty sets the tone by firing one of his ministers.
"There's a concept called ministerial accountability. You can play musical CEOs all you want," Hudak said.
"That's not going to bring an end to this mess. We need the minister to step down."
The changes at OLG also come just a few months after a scandal at the government-run eHealth agency led to the resignation of CEO Sarah Kramer and board chair Alan Hudson.
The eHealth scandal resulted from untendered contracts, as well as lavish spending and picayune expense claims by consultants.
Duncan said Monday that Ontario McGuinty will address the problems at the OLG and outline a "broader set of initiatives" aimed at ending the expense claims problems within the provincial government.
According to the OLG's website, the lotteries generate "approximately $6 billion in annual revenues and $2 billion in annual profit" for the province.
Ten days ago, I posted on how Bonusgate spread to New Brunswick. I specifically mentioned that the Auditor General of Canada should question the bonuses that were recently awarded to senior managers at PSP Investments and relay her concerns to the Treasury Board and Department of Finance.
Moreover, provincial finance ministers should conduct a thorough performance, operational and fraud audit using independent industry experts on every major public pension fund in Canada, including provincial and federal crown corporations like OMERS, Ontario Teachers', and the Canada Pension Plan Investment Board (CPPIB). Some of these funds are hiding much more than others, but they all have secrets they want to keep from the public and they all game their private market benchmarks to reap big bonuses at the end of their fiscal year (again, some are much worse offenders than others).
Last week, the Globe and Mail reported that BC targets salaries for top public executives:
Salaries for top executives who serve on independent B.C. government agencies will be under the microscope as the cash-strapped province hunts for new ways to rein in spending, Finance Minister Colin Hansen says.
The government announced plans to review the fiscal performance of its Crown corporations, health authorities and other arm's-length agencies this week. Yesterday, Mr. Hansen said the often-controversial executive compensation will be part of that review.
"I think those are all issues we have to address," he told reporters in Victoria.
Eight years ago, the B.C. Liberal government launched a core review that aimed to dispense with functions that were not deemed to be essential government services. Now, it is reconsidering what should be arm's-length services, and what could better be delivered as direct government services.
"We want to be pragmatic, we want to look at the most cost-effective way of delivering services to the public ... and if that can be better structured by having an arm's-length organization, then that's what we'll do," Mr. Hansen said.
"If it's better to make sure we have a cohesive and consolidated approach to delivering services by ensuring those are delivered by line ministries, then we will do that."
NDP Leader Carole James said the review of independent government agencies is a bid to distract the public from the province's own mismanagement of public dollars.
"It's the old game of, 'point the finger somewhere else and don't look at us,' " she said yesterday. Ms. James noted that many of the agencies now under review were established by the Liberal government in the name of ending political interference.
The province last year released a list of executive compensation at Crown corporations, health authorities and other arm's-length agencies as it defended wage increases for its own top civil servants.
That list showed close to 150 executives at government agencies such as B.C. Hydro, the Fraser Health Authority and the Insurance Corp. of B.C. who earn more than the $188,000 that Gordon Campbell earned as premier last year.
At the time, the government pointed to those salaries to explain the need to raise the rates for its own senior civil servants.
Salaries at agencies such as the health authorities are approved not by government directly, but by boards that have been appointed by the provincial government.
Some agencies are more arm's-length than others.
Late last month, the province announced fiscal reviews of B.C. Ferries and TransLink, the transit service for Metro Vancouver. Those assessments, conducted by comptroller-general Cheryl Wenezenki-Yolland, may serve as the model for the other agency reviews.
Ms. Wenezenki-Yolland is examining how well the two operators have cut costs and delivered service to the public, and how they compensate senior executives. The announcement came the day the two agencies released details of their top managers' salaries.
B.C. Ferries chief executive officer David Hahn earned more than $1-million when incentives and pension contributions were included, putting him in the upper stratosphere of executives within the broad public service in B.C.
But B.C. Ferries is supposed to be independent of political interference, and officials there have said they will treat the results only as advice.
Meanwhile, the NDP focused its attention yesterday on the government's plans to adopt a harmonized sales tax next July.
Ms. James accused the government of lying to the public about its intentions on the tax during the last provincial election campaign. "Serving the people of British Columbia means telling them the truth," she said. Liberals maintained during the May election campaign that they did not intend to follow Ontario in adopting the HST.
Mr. Hansen told the legislature his government did evaluate the potential change but it wasn't until after the election that his finance analysts persuaded him it was a good move.
I have not covered the British Columbia Investment Management Corporation (bcIMC) much in my blog, but I did go over their 2008-2009 annual report and noticed that its President & CEO, Doug Pearce, got compensated $1,018,323, followed by Lincoln Webb, VP Private Placements who got compensated $616,112 and Bryan Thomson, VP Equity Investments, with a total compensation of $541, 367:
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Now, these are good compensations but nowhere near what their counterparts are getting in Eastern Canada and bcIMC is one of the largest funds in the country.
How did it perform in 2008-2009? From the annual report, we see that they lost 14.6% in 2008-2009 relative to their benchmark of -11.1%. In other words, they underperformed their benchmark by 3.5%, which is considerable, but their overall results are among the best of the large funds. Interestingly, bcIMC which is known to be "less sophisticated' than its counterparts in Canada, managed to lose a lot less than most of them and its senior managers didn't get paid anywhere near as well as most of their counterparts out east (not that they got paid badly either after losing billions).
Moreover, as shown below, bcIMC clearly presents its benchmarks in its annual report (page 21):
(click on image to enlarge)
I have issues with their private market benchmarks because in the good years, they are easy to beat and in the bad years, they are almost impossible to beat. This will come back to haunt them as private markets suffer a protracted downturn (better to use a spread over public markets to reflect the beta, illiquidity and leverage of private markets).
Finally, I read on Zero Hedge about Michael Moore's Latest Love Story: Capitalism (see video below). I wish Mr. Moore read some of my emails when I was discussing the pension crisis so he could see how the pension crooks steal money legally and get exalted at the same time.
Oh well, you will all have to wait for my movie to come out some time in the future. Till then, I hope politicians will clean house at Canada's public pension funds because while most people are hurting, the pension parrots are laughing all the way to the bank. Come on guys, show us your Lotto 6/49 happy dance!