Michael Graydon has resigned as CEO of the sa国际传媒 Lottery Corp. to immediately become head of a private gaming company. That鈥檚 not against the law, but it should be. The sa国际传媒 government should move quickly to include non-compete clauses in all Crown corporation CEO contracts.
On Jan. 30, after six years of running BCLC, Graydon submitted his resignation, to take effect March 30. He becomes president of PV Hospitality ULC, a newly formed entity affiliated with Paragon Gaming Inc., the company developing a huge casino project at Vancouver鈥檚 sa国际传媒 Place, a process over which he has had regulatory oversight.
He takes with him deep and detailed knowledge, not only of BCLC operations, but also of competitors of his new employer.
A confidentiality agreement forbids Graydon from using information belonging to the corporation, but how could that possibly be enforced? It would be ridiculous and na茂ve to believe he was not hired for what he knows and who he knows.
Finance Minister Mike de Jong has ordered an investigation into whether Graydon was in a conflict of interest as he prepared for his departure from BCLC. He should be investigating why the head of a Crown corporation can be regulating the gambling industry one day, and working for the industry the next.
Deputy ministers have to wait a year before taking a job related to their public-service experience. There鈥檚 no plausible reason the same restriction shouldn鈥檛 be applied to CEOs of Crown corporations.
That is not to imply Graydon has done or will do anything wrong 鈥� conflict-of-interest rules exist not only to prevent conflict, but to prevent the opportunity for and the appearance of conflict.
The appearances in this case are just plain bad and the problem is the government鈥檚 lax oversight.
The manner of Graydon鈥檚 leaving is also disturbing. Although he gave two months鈥� notice, he was told to leave almost immediately and was paid to the end of his notice period, resulting in a payout that included a $35,600 salary-holdback payout and severance pay of $48,000.
Government employees are not normally given severance pay when they resign voluntarily, nor should they be.
In the legislature, de Jong defended the payout, saying proper guidelines were followed.
鈥淎n arrangement was arrived at that fit within those guidelines, as required under the guidelines.鈥� he said. 鈥淚t was negotiated between Mr. Graydon and the board at the sa国际传媒 Lottery Corporation.鈥�
It is likely Graydon appreciates the government鈥檚 generosity. Those involved in the 67 layoffs announced by the lottery corporation two weeks ago will not likely see things in the same light.
An expert on executive compensation who examined Graydon鈥檚 contract with BCLC for the Globe and Mail called it a 鈥渇ailure on the part of the board of directors,鈥� and that it 鈥渉ad a whole bunch of holes in it.鈥�
The government should make non-compete clauses mandatory for every Crown corporation executive鈥檚 contract, holding them to the same condition it demands of cabinet ministers, deputy ministers and other senior officials.
The premise behind a Crown corporation is that it is an entity better managed at arm鈥檚 length from the political process. Certainly, these corporations need to be immune to micromanaging by politicians, but it鈥檚 becoming increasingly clear that legislators need to keep closer watch on the corporations that manage public assets and handle public money.
