D.C.’s lottery contract: The quiet game

September 22, 2011

AFEDERAL COURT hearing is set for Friday on a bid to compel Mayor Vincent C. Gray (D) and other city officials to testify about the circumstances surrounding the 2008 award of a multimillion-dollar lottery contract. The action is being brought by the former lottery procurement officer, who says he was fired because he resisted what he saw as improper political pressure. His allegations are the latest in a series of unsettling questions about how the District has conducted its lottery business. No matter the outcome of the hearing, answers are needed.

Eric W. Payne, former contract manager for Chief Financial Officer Natwar M. Gandhi, filed a detailed affidavit outlining what he alleges were behind-the-scenes machinations to thwart the results of a competitive bidding process that awarded the $38 million contract to Greek gambling conglomerate Intralot and a local company led by Warren C. Williams Jr. Despite findings that the District would save money and receive a far superior product, the D.C. Council, under the leadership of then-chairman Gray, rejected the recommendation after months of dragging its feet. Mr. Payne says it was clear that there was animus against Mr. Williams, who had ties to then-Mayor Adrian M. Fenty (D).

Buttressing that claim is a conversation that Mr. Payne says he taped with a deputy to Mr. Gandhi. If Mr. Payne’s account is correct, the deputy, Angell Jacobs, defended the selection process and Mr. Payne’s supervision of it, but said the issue had been politicized. “The [Fenty] mayor’s office has decided they are going to use this issue to make the council look like crap,” the deputy reportedly said, and, most explosively, “for Gray and [Ward 1 council member Jim] Graham, this is all personal.”

Citing pending litigation, a spokesman for Mr. Gray would not comment; Mr. Graham told us his objection to Mr. Williams was not personal but based on what he saw as past problems with his performance.

The D.C. attorney general’s office is seeking to quash the subpoenas on the grounds that the legislative process is protected. No explanation has been offered for why the contract was rejected or why Mr. Payne, who shared with us his work records showing a series of positive evaluations and raises, was demoted and then fired. Adding to the questions are the circumstances of the rebidding process, in which Intralot, after bidding solo, suddenly decided it needed a local partner.

There also is the suspect way the city engineered the effort to legalize online gambling. Not only was this controversial issue sneaked into law, but, as The Post’s Michael Laris recently revealed, questions exist about why the city didn’t put online gaming out to bid. If anything is clear, it’s that this issue isn’t going away any time soon.

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