CardCall affair is Camelot bugbear

To precipitate one public row might seem a misfortune, but to create three sounds like sheer carelessness. Carelessness, in fact, is very much the word which could describe the latest tribulation afflicting Camelot, the National Lottery operator.

For, in the wake of controversy over excessive profits and uncomfortable disclosures about Camelot directors’ bonuses, we have the CardCall affair.

CardCall, readers will remember (though not seemingly those at Camelot) is a small company specialising in the marketing of prepaid phone cards. It is run by a flamboyant entrepreneur, Michael Zwebner, who last year struck a deal with Camelot as a result of which the National Lottery logo, one of Britain’s best known brands, would appear on his phone cards.

Very enterprising of him. And a coup for Camelot, too, which badly needed a brand partner to help it reach into the youth market. Except that Zwebner is an undischarged bankrupt with, to say the least, a very erratic business career behind him – which has now attracted the interest of the national press.

Did Camelot executives know this at the time they signed the deal last August? Possibly not. Should they have known? Yes they should. In fact they need have done little more than read the pages of Marketing Week, which ran several exposés last year, for an insight into Zwebner’s track-record.

Embarrassingly, Camelot now says it knew about Zwebner’s bankruptcy but does not care to reveal when it found out. Last year, it said it did not feel a need to launch an investigation into his affairs at the time of the deal. So why has it now changed its mind? And what does the fact that it is now launching an internal investigation say about its vetting procedures before the deal was struck? Which raises the uncomfortable question of whether Camelot was in too much of a hurry to conclude the deal.

While on the subject of vetting procedures, it has emerged that Oflot is reprimanding Camelot for setting up an international operation without consulting it – a story first revealed in Marketing Week (October 25 1996). Camelot will, in fact, be allowed to proceed with its new enterprise, but on the condition that it remits a slice of its overseas profits to UK Good Causes (not a part of the original plan). In the meantime, Oflot will be watching Camelot’s behaviour more diligently. Which, in the light of recent events, is no bad thing.

News page 5; Analysis page 7