BC - “Top lotto executives in middle of mess”
Duo running the multibillion-dollar Crown corporation signal they plan to stay in the executive suite
Miro Cernetig, Vancouver Sun, Wednesday, May 30, 2007″
VICTORIA — Don’t expect the two top executives selling British Columbians lottery tickets to fall on their swords in shame anytime soon.
Even as the biggest scandal ever faced by the B.C. Lottery Corporation exploded around them, with the B.C. ombudsman suggesting there was a potential for people to have been robbed of their prizes, the duo running the multibillion-dollar Crown corporation signalled they plan to stay in the executive suite to fix the problems.
Sitting in the legislature’s press theatre, Vic Poleschuk, the lottery corporation’s beleaguered CEO and president, expressed regret over the ombudsman’s finding that there was the potential for lottery players to be defrauded by ticket sellers.
Vic Poleschuk (left), John McLernon and Solicitor-General John Les face questions during a Victoria news conference Tuesday.
Ray Smith, CanWest News Service
The review found some ticket sellers have been extraordinarily lucky in winning lottos, though forgetful about where they bought their tickets.
One ticket seller cashing in a $1-million jackpot, and another who netted $500,000, couldn’t even tell regulators when and where their tickets were purchased. But they were paid all the same.
Poleschuk insisted there was no evidence anyone had ever lost a prize to retailer fraud under his tenure.
He was quickly backed up by John McLernon, the chair of the lottery corporation’s board, who flatly declared: “There’s no evidence that people who won a ticket didn’t ‘get their rightful prize.’”
Except there was a fraud, it turns out. Under a barrage of questions, Poleschuk revealed that a retailer had indeed tried to keep a prize of about $1,000 from a customer.
It was eventually returned, but the lottery corporation never bothered to press criminal charges. Poleschuk said the customer didn’t want to press criminal charges and the lottery corporation left it at that.
“What happened to the retailer?” a reporter asked.
“That retailer was terminated,” said Poleschuk.
“Why were no criminal charges laid?” the media asked.
“We would have, at that point, been saying to our player, ‘If you wish to proceed with criminal charges and charge that retailer we will support that,’” said Poleschuk. “We’ve now changed that to say we will report — as part of the recommendations — all of those type of incidents.”
Sitting by both men was Solicitor-General John Les, who is essentially the province’s top cop. He clearly wasn’t pleased with what he was hearing.
“To say that I am unhappy is an understatement,” said Les as he announced he would launch an independent audit of the Crown corporation that oversees the province’s $2-billion gambling industry.
Les, too, avoided questions about whether heads should roll, perhaps even his own. In the legislature, the solicitor-general ignored the New Democratic Party’s repeated demands that he tender his resignation.
Yet as he sat beside both lottery executives at their carefully organized news conference, Les was hardly supportive of Poleschuk’s and McLernon’s stewardship of the lottery corporation’s fraud-protection systems.
He made it clear he agreed with the ombudsman’s conclusion that top management had not done enough to investigate suspiciously high winning rates amongst ticket sellers or customer complaints that they had been denied winnings.
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“You don’t need to be a rocket scientist to put two and two together and figure out there’s something fishy going on there,” said Les, when asked about the high winning rate of some ticket sellers.
“There was not sufficient attention paid by the lottery corporation to those circumstances.”
Les went on to say that if any ticket sellers had tried to defraud customers of winnings, “that’s a criminal offence and that should be followed up, absolutely.”
“If we can find evidence to support charges, we will support charges,” said Les.
Asked if there would be changes at the top of the lottery corporation, Les said he would wait for the audit into the “culture and attitude” within the lottery corporation. He said he had confidence in the Crown corporation’s board, which makes staffing decisions.
Poleschuk and McLernon weren’t inclined to discuss their futures.
McLernon argued the lottery corporation’s management team has had its “knuckles wrapped” over the embarrassing revelations from the ombudsman. He suggested this would be a catalyst for positive reform.
Pressed as to whether he had considered resigning over his stewardship of the board, McLernon said tersely: “That would not be my role.”
Poleschuk looked at the table when asked about his future. His hands were shaking.
The issue of the management of the B.C. Lottery Corporation isn’t going away.
In the legislature, New Democratic Party leader Carole James called for the resignations of McLernon, Poleschuk or the solicitor-general.
“Someone has to be responsible for this damning indictment of how government is handling our lottery corporation,” she said.
mcernetig@png.canwest.com
BCLC’s BIG PLAYERS
- Vic Poleschuk is the head of the B.C. Lottery Corp., a position he was appointed to on Oct. 1, 1999. A graduate of the University of Manitoba, with a background in finance and accounting, he entered the lottery industry in 1979 with the Western Canada Lottery Foundation. He joined the B.C. Lottery Corp. in 1985, in its startup year, as the vice-president responsible for finance, administration and information systems. This year, he was awarded the lifetime achievement award by the Public Gaming Research Institute.
- John McLernon was appointed as chairman of the B.C. Lottery Corp. board in January 2006. He has more than 30 years experience in the private sector, primarily in commercial real estate. His biography at the time of his appointment listed him as honorary chair and co-founder of the Colliers Macaulay Nicolls group of companies, serving as chair and CEO of the company from 1977 to 2002 and as chair until 2004.
© The Vancouver Sun 2007
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