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Former OLG Boss to Sue Over Expenses Scandal

17th September 2009 8:05 am GMT

As further evidence emerges regarding the expense account scandal at the Ontario Lottery and Gaming Corporation, former CEO Kelly McDougald is set to sue the province, Finance Minister Dwight Duncan and the OLG for up to CAD$9 million, claiming that she has been made a 'scapegoat' following her dismissal from the company last month.

In her 18-page notice of claim, McDougald alleges that she was ordered to fire OLG Chief Financial Officer John Black with cause, as well as one other individual to be determined by herself, after the Progressive Conservatives requested two years worth of expenses records for OLG employees to be made public.

McDougald claimed that there was no cause to fire Black or anybody else, and instead proposed a set of new rules for expenses, which would be posted online and overseen by the auditor general. She also offered to resign from her position as CEO if the proposal was rejected, so long as her severance pay was included.

The embarrassing scandal, so soon after a similar debacle at eHealth Ontario, led OLG Board Chairman Michael Gough and the entire Board of Directors to resign from their positions, with an interim Board named in their place. Its first action was to end McDougald's employment as CEO of OLG with no entitlement to severance pay.

"We are taking another step to protect taxpayer's money," said Minister of Finance Dwight Duncan. "New leadership at the OLG will work under a mandate to instil increased accountability and a culture of respect for the public interest and taxpayer dollars."

In her legal notice, McDougald said that she was informed of her termination by Duncan's deputy minister and was later held to be responsible for the allegedly scandalous spending by OLG staff, despite previous assurances from Duncan that he would not seek her departure in light of the scandal.

McDougal acknowledged that some of the expense claims were inappropriate but maintained that it was consistent with the operation of a $6.5 billion revenue generating corporation, adding that some of the claims were made before her appointment as CEO in 2007.

A number of dubious expense claims have been made public, such as one OLG executive charging for a nanny so she could attend meetings, as well as small items billed including pen refills, grocery bags and a car wash, according to Canada's CBC News.

"The actions taken against me by the Ontario government were severe and unjustified and I must therefore seek legal action to establish the facts and restore my reputation," said Kelly McDougald.

McDougald is suing for defamation as well as breach of contract.

Minister of Finance Dwight Duncan has confirmed that the Ontario government had received a notice of claim from McDougald, but has denied the claims and stated that the government will "vigorously fight against them in court".

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