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Ousted CEO Of Lottery Corporation Sues Ontario Government Over Firing

Kelly McDougald, the ousted chief executive officer of the troubled Ontario Lottery and Gaming Corp., served notice Friday that she was launching a lawsuit against the provincial government for her dismissal.

“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,” McDougald said in a written statement released Friday.

The Liberal government fired McDougald as head of the lottery corporation in late August and released thousands of pages of “unacceptable” expenses filed by OLG executives at the same time.

The entire OLG board resigned the same day, while the government called in the auditor general to determine if any rules were broken when executives billed taxpayers for expensive dinners, memberships to Weight Watchers, gyms and golf clubs, and even a $1.12 grocery bag.

“The expense information released by the Ontario government was done without effort by government to either seek or provide context,” McDougald complained.

“While some of these expenses were indeed inappropriate, others were business expenses consistent with the operation of a $6.5 billion revenue-generating corporation, or were part of the employee benefit contract, (while) others were incurred prior to my appointment.”

Finance Minister Dwight Duncan said Friday the government would defend McDougald’s firing in court.

“We’ve taken what we believe to be the appropriate steps and we will vigorously, vigorously fight on behalf of taxpayers,” Duncan told reporters.

“We will vigorously defend this, and we’ll have more stuff to say about OLG and others as we move forward.”

McDougald was hired in 2007 to fix OLG after the corporation was rocked by another scandal about too many insider wins by lottery retailers, but was “dismissed with cause” after word about inappropriate expenses charged by lottery executives.

However, McDougald’s firing came as a surprise to many after the government paid Sara Kramer, the former CEO of eHealth Ontario, more than $300,000 to leave her job after the agency handed out $16 million in untendered contracts to consultants.

The eHealth scandal, which also saw consultants earning $2,700 a day billing taxpayers extra for minor expenses such as snacks and cups of tea, was considered by many to be a far more serious breach than the expense claims approved at the lottery corporation.

Duncan said he wasn’t surprised by McDougald’s decision to notify the government she intended to sue for wrongful dismissal, and admitted a court case could last years.

“I’m not a lawyer, but my understanding is that these things can drag out for a long time,” he said.

When former Hydro One chief executive Eleanor Clitheroe was fired in 2002 amid allegations of lavish spending, she launched a $30-million lawsuit against the province that is still before the courts.

There’s a 60-day notification period to sue the government, said Duncan, so he hadn’t seen the actual statement of claim by McDougald. Her lawyers did not immediately respond to requests Friday for copies of the statement.

The government also ordered a sweeping review to root out spending abuses at other provincial agencies when it fired McDougald, and the opposition parties have been waiting all summer for Monday’s resumption of the legislature to raise the OLG scandal.

McDougald’s statement also expressed “deep thanks” to the people who had reached out to her since she was fired and defended her actions as CEO of the lottery corporation.

“During my time at OLG, I conducted myself ethically, professionally, in a dedicated and disciplined way, intending always to meet or exceed the expectations of the people of Ontario,” she wrote.