Ontario cracking down on liquor board freebies

How much are PEI Liquor Control Commission employees receiving?

By Stephen Pate, NJN Network, Charlottetown, Prince Edward Island, Canada, May 10, 2009 with story from canoe.ca

Provincial liquor boards and commissions have a long reputation for being rife with kickbacks, bribes and pay-offs. Even at the employee level freebies that are considered illegal and unethical in business are flowing freely.

Liquor employees in Ontario are receiving on average one sports event ticket or other freebie a month. The Ontario government is trying to stop it. These kinds of unethical practices are hard to root out.

We wonder what is going on at the PEI Liquor Commission. Heading the PEILCC these days is the Brooke MacMillan, a man known to enjoy dipping into the public and other funds. Sunrise Semester – Brooke-MacMillan, our new word

No more freebies for liquor board workers

By Dean Beeby, THE CANADIAN PRESS

OTTAWA – Liquor board workers in Ontario have been ordered to stop accepting freebies from the big distilleries and breweries.

For years, the Liquor Control Board of Ontario has allowed its employees to accept free tickets to hockey games, concerts, curling matches and stage shows from the companies that supply their stores with liquor, beer and wine.
But tough new rules imposed by the Ontario government have ended the gravy train, forcing workers to refuse the hundreds of ticket offers they once accepted.

The ban was imposed last August, and the agency issued revised guidelines to its workers in March this year.

An internal report estimates that no-charge tickets represented about a third of all the supplier-paid benefits enjoyed by a key group of employees. The rest were mostly business meals, which are still allowed.

The report, created in anticipation of the tougher rules, also found that the official forms employees are required to file when they accept freebies are too often vague and incomplete.

“There is a significant amount of activity for sporting and entertainment events,” says the document, obtained by The Canadian Press under the province’s freedom-of-information law.

“There was inconsistent documentation of the business reason for the various activities, and inconsistent levels of detail provided with respect to company or individual host names.”

LCBO auditors examined monthly reports filed by 95 workers, mostly in sales and marketing, who routinely work closely with suppliers. The reports document each occasion in which an employee accepts a freebie, whether a gift, a meal or a ticket to a hockey game or other event.

Over the 18 months covered by the audit, each worker on average enjoyed a freebie a month – though for one unidentified employee it was once a week.

The reports do not include any information about the dollar value of the freebies, and LCBO auditors did not make estimates.

The agency previously justified allowing its employees to accept a wide range of supplier-paid activities to promote a “positive business relationship.”

But the practice was severely curtailed when the liquor board was brought under the Public Service of Ontario Act, which sets out tough ethical standards for the province’s government workers.

Business meals worth less than $50 are still allowed but free tickets to sporting and entertainment events are out, such as the We Care Golf Classic or the Hillebrand Jazz Festival.

“Even if proceeds from an event go to charity, the issue under the rules is the benefit to the employee,” say the revamped LCBO guidelines.

“The question is whether a benefit of more than nominal value has been given to a public servant if he or she is, for example, given free tickets to attend a hockey game or opportunity to play golf with his or her green fees covered by another person or entity.

“Such benefits could not likely be regarded as ‘nominal’ or insignificant.”

In a report presented to management last December, the auditors estimated that the move will reduce the number of freebies by at least a third, or about one freebie – now mostly business meals – every two months for each worker.

The report identified a total of 268 suppliers and organizations who were cited as providing free meals and tickets, though only 10 accounted for the lion’s share.

These were the big product suppliers, such as Diageo, which provided 45 tickets to sports and entertainment events; Vincor, with 36; Mark Anthony, with 26; and Corby with 21. Transport companies were also big freebie providers.

The LCBO, in the meantime, has revised its monthly reporting system to require some employees to provide more details about the reason for the supplier-paid benefit.

The agency has also written separately to its suppliers in the beverage alcohol industry asking them to stop tempting employees with no-charge tickets.

“To minimize conflict of interest situations, we are asking our trade partners NOT to invite LCBO employees to attend sports events, concerts, charity or other similar events, or to trade-sponsored sports events such as golf, tennis or curling,” Bob Peter, president and CEO, said in a memo to suppliers and trade associations.

A spokeswoman for the liquor board, which has a monopoly on sales in the province, said the audit’s estimate of a one-third reduction in supplier-paid benefits seems to be borne out by recent experience.

“Since the implementation of the new guidelines, this forecast appears to be fairly accurate,” said Linda Hapak.

“As well, there is no evidence to suggest suppliers are substituting meals for events. In fact, business meals where hospitality is accepted are declining, as is attendance at sporting and entertainment events.”

Ontario MPPs and cabinet ministers are also generally prohibited from accepting tickets as gifts, under the Members’ Integrity Act.