The high-pressure tactics used by Mayor Marion Barry and his aides to reverse the D.C. Lottery Board's award of a contract to run the planned $100 million-a-year daily numbers game have set off a legal and political uproar, drawing criticism from members of the City Council and attention from Capitol Hill.
The Barry administration's maneuvering also has generated an allegation, spelled out in a $12 million lawsuit, that Barry has attempted improperly to steer the contract to a firm in which several of his political allies are involved.
The fight culminated in a reluctant vote by the lottery board last week to scrap the bid it had already accepted and start from scratch.
"I think the unfortunate thing now about this whole mess is that it's going to be tainted no matter what," said City Council member John Ray (D-At Large), one of four council members, including Chairman David A. Clarke, who publicly joined the debate last week.
Officials say that during the time it will take to solicit new bids for the contract, the cash-strapped city government will lose at least $7 million in projected revenue from the numbers game, originally sscheduled to begin July 18.
"I don't understand it," Ray said. "I haven't seen a compelling reason why the original contract should not have gone forward."
A senior Barry administration official who asked that his name not be used said that Deputy Mayor Ivanhoe Donaldson's "arrogant" handling of the issue and Barry's public feud with what the mayor calls a "crazy, runaway board" have disrupted the routine of city business in the mayor's office.
Barry and his aides have said they intervened because they question whether the firm the lottery board selected--Lottery Technology Enterprises--has valid minority involvement.
The most controversial issue, according to numerous city officials, is whether the administration, as some critics contend, is attempting to favor the firm that submitted the most costly original bid, Columbia Gaming, represented by attorney Robert B. Washington Jr., a former city Democratic Party chairman and a close ally of Barry and Donaldson.
Barry has issued a blanket denial of wrongdoing by his administration. His aides, including Deputy Mayors Donaldson, Elijah B. Rogers and Alphonse G. Hill, and Corporation Counsel Judith W. Rogers--now decline to be interviewed about the matter, citing the $12 million lawsuit against them filed by Lottery Technology.
The suit charges that the Barry aides, along with William Y. Kao, who works for Hill, conspired to steer the contract to Columbia Gaming.
Clarke, who was the first major public official to speak out on the issue last week, said he did so in response to "rumors going around town" that the administration was attempting improperly to favor Columbia Gaming.
"I thought we ought to get the questions on the record," said Clarke, who is considered to have a good working relationship with Barry. Clarke said last week after questioning lottery officials and administration representatives that "some of my concerns have been allayed," but he agreed that Barry has not fully explained his actions.
Most members of the five-member lottery board, including those who agreed to reverse key votes and reopen the bidding, still insist that the contract was awarded properly to Lottery Technology over Columbia Gaming and a third bidder, D.C. Data Co., and that Barry's intervention was unnecessary.
"Ivanhoe went after us on these packages bids ," said lottery board Chairman Brant Coopersmith in an interview Friday. "He kept making it clear these were not good packages." Of the winning Lottery Technology bid, Coopersmith said, "Ivanhoe rejected their figures and he surely persuaded the mayor."
One lottery board member said, "We couldn't stand up to the mayor, the deputy mayors and the city's top lawyers." Another complained, "We still have not been given a public forum to explain our process. We're waiting for that."
That chance may come soon. Rep. Julian Dixon (D-Calif.), chairman of the House Appropriations subcommittee on the District of Columbia, said Thursday that his subcommittee plans to question board members about the contract when they testify on Capitol Hill about their budget.
Various city leaders, including present and former officials, some of whom declined to be identified, said they question Barry's publicly stated reason for his intervention.
Barry, in two interviews, said he intervened to get the case out of court for fear that a judicial decision might impair the city's minority-preference contracting law, which now requires that 35 percent of the value of all city government contracts go to minorities. Barry contended that the board misinterpreted this law. "I don't want the court running the District of Columbia," Barry said.
The mayor said the board incorrectly considered potential "profits" in determining income the minority firms might receive rather than income based on "gross revenues." He said the distinction "is crucial" because expenses could quickly consume any profits and "the minority firm can wind up with nothing."
Barry said such a faulty interpretation of the minority contracting law, which has never been challenged in court, could have resulted in extensive litigation and jeopardized the basic law.
However, Clarke and Ray, both attorneys, have said they are not convinced the board's actions posed a real threat to the law. In any event, they said, the city easily could have corrected any defect by altering the law.
"I don't understand their argument," Ray said. "It may well be that the lawyers in the corporation counsel are being very cautious. If indeed this particular proposal has threatened the whole minority contracting issue, I think the mayor ought to come out and state in very clear language how that is."
Council member Betty Ann Kane (D-At Large) who, like Ray, unsuccessfully challenged Barry for mayor last year, said she agreed that the administration's tactics have not been justified. "The pressure, the threats, the interference set a very bad precedent," she said.
The board was scheduled to award the contract on March 7, but put off action after Barry asked the members to meet with Donaldson. Donaldson told the board he wanted the Minority Business Opportunity Commission (MBOC), which is under his authority, and Hill, deputy mayor for finance, to review the minority contracting provisions in the bids.
About a week later, both Hill and the MBOC praised the bid of Columbia Gaming and criticized the others, though Columbia Gaming had promised to return less revenue to the city than the other firms. The board, however, awarded the contract on March 15 to Lottery Technology. On March 17, Columbia Gaming filed a protest. Four days later, D.C. Data filed one as well.
The lottery board, after lobbying by the mayor's office, agreed to allow a review committee, appointed by Hill, to look at the selection process. The committee on April 15 concluded that the board may have erred in its consideration of minority participation and recommended that the board look again at the three bids.
On April 17, the board rejected the review panel's recommendation and said it would award the contract to Lottery Technology. The board later learned that Kao, one of the three members of the review committee, had helped prepare Hill's initial critical report.
Board members were also upset that Donaldson had berated the board's general counsel, Jeanette Michael, for her role in continuing to defend the selection of Lottery Technology. Eventually, the board retained David P. Towey, a lawyer with the firm of Arnold & Porter, because of the board's disputes with the corporation counsel's office.
But before the lottery board members could sign the contract with Lottery Technology, the losing firms won a 10-day restraining order in D.C. Superior Court.
On April 21, Barry called the board members into his office and, according to board members, urged them to ask for new bids. City Administrator Rogers had a similar meeting with the board a week later, threatening, according to sources, a city lawsuit forcing the board to remove its private lawyer and reopen the bidding.
A week ago yesterday, Barry called in the board for an extraordinary three-hour session in which he threatened to fire the board members if they did not resolicit the bids. District Building security police, saying they were acting on the mayor's orders, cleared the fifth floor of waiting reporters.
Finally, four of the five board members agreed with Corporation Counsel Rogers' demand that they hold an immediate "public" meeting and indicate their intention to resolicit bids and use her office as their legal representative.
Last Monday, the city went into court and announced that the board intended to resolicit bids, a decision the board made final in an emotional meeting on Wednesday.
On Saturday, the board issued its new bid solicitation and the process is starting all over again.