By Mike DeBonis
Washington Post Staff Writer
Wednesday, March 9, 2011; 10:39 PM
A campaign consultant to Mayor Vincent C. Gray was involved in a bid to operate the District's lottery six years after a federal court found that he had overcharged the operator of Georgia's lottery more than $1 million.
The bid to operate the city's lucrative computerized lottery games, which ultimately failed, included the consultant, Howard L. Brooks, as an adviser, and Lorraine A. Green, chairwoman of Gray's mayoral campaign and transition, as a partner.
But allegations aired this week by former mayoral candidate Sulaimon Brown have resulted in new scrutiny of Brooks and Green and their relationships with Gray (D).
Brown told The Washington Post that he struck a deal with the Gray campaign to attack incumbent Adrian M. Fenty (D) on the hustings in return for a city job and that Brooks and Green, acting on the campaign's behalf, gave him cash payments during the race. The Post has not been able to independently verify any payments.
Brooks, who was paid $44,000 by Gray's campaign, is married to the sister of P. Leonard Manning, a businessman who partnered with Rhode Island-based GTECH to run the city's computerized lottery games from 1983 to 2010.
The Manning-GTECH group bid in 2007 to retain the contract, but the Office of the Chief Financial Officer ruled in favor of a competing offer, from a partnership involving Fenty allies and Intralot, a competitor of GTECH. But when the contract went to the D.C. Council for approval, Gray and several other members raised objections that led to a second round of bidding.
In the second round, GTECH partnered not with Manning but with a group of politically connected business figures: Green, an Amtrak executive who had served as executive director of the D.C. Lottery in the late 1980s; Darryl Wiggins, an entrepreneur with ties to Fenty; and Roderic L. Woodson, a prominent lawyer and lobbyist. But the group was unable to obtain minority business certification, and Intralot again prevailed.
The second time around, the GTECH team brought in Brooks as a consultant, Wiggins and Woodson said, because of his experience running lottery operations. But that experience was checkered, court records show.
A company owned by Brooks, Techmar Georgia, subcontracted with GTECH in 1995 to service state lottery terminals in western Georgia. But by 1998, GTECH noticed that its billings "far exceeded the amounts billed by . . . other subcontractors for the same services in other geographical territories," according to a court filing.
An "extensive forensic investigation," GTECH later told a judge, "ultimately demonstrated that . . . GTECH overpaid Techmar." After Techmar refused to let GTECH audit its books, GTECH canceled the agreement in 2002, and Brooks sued. GTECH countersued and prevailed in federal court, obtaining a judgment of $1.4 million, according to court records.
"This is a case in which GTECH . . . trusted and relied in good faith upon its subcontractor . . . to provide certain operational functions in support of the State of Georgia's Lottery, only to discover that Techmar systematically and fraudulently over-billed GTECH," an attorney wrote in a 2003 pleading.
Brooks and Green did not return calls for comment Wednesday.
Wiggins and Woodson said they were not aware of the Georgia case when Brooks joined their group as a consultant. Brooks was "extremely helpful," given his background, Wiggins said. "I understand the technology. He understood the business."
Woodson said Brooks "had credentials, as did Lorraine Green. We considered both of those to be good things."
Although Brooks didn't hold an equity stake in the proposed joint venture, Wiggins said he "would have been hired as an executive." Woodson said that if the bid had succeeded, Brooks would have been considered for a partnership.
Angela Wiczek, a GTECH spokeswoman, said that the company, initially, was not aware that Brooks had been brought on and that he was not paid for his advisory work. "He certainly was not involved to our knowledge," Wiczek said. "Lorraine Green brought him in at some point. "
But Wiggins and Woodson said GTECH executives would have known of Brooks's involvement. "They knew him, saw him every day," Wiggins said. Wiggins added that Brooks traveled with him, Green and D.C. Lottery officials to Michigan, to inspect a GTECH lottery system similar to the one proposed for the District.
In another development, Brooks's son is resigning from the $110,000-a-year special assistant post he recently assumed in the city's economic development agency, according to a government source.
Also, Brown said Wednesday that he was meeting with the FBI about his allegations, and Gray retained lawyer Robert S. Bennett, who represented President Bill Clinton in the Monica Lewinsky affair, as his personal counsel. Late Wednesday, a spokesman for the U.S. attorney's office said in a statement that the office takes Brown's allegations "seriously" and is "working with the FBI to assess the matter."
Brown, 40, an unemployed auditor, was hired as a $110,000 special assistant in the Department of Health Care Finance at the end of January but was dismissed Feb. 24 after media reports of his past legal troubles, including a 2007 restraining order.
Wednesday afternoon, Gray asked Bennett to represent him. In 2009, Gray tapped Bennett to head an independent probe into personal contracts and earmarks involving council member Marion Barry (D-Ward 8). Bennett and lawyer Jonice Gray Tucker, Gray's daughter, previously worked at the same law firm.
Staff writer Nikita Stewart and staff researcher Magda Jean-Louis contributed to this report.