The D.C. Lottery Board yesterday awarded a contract that gave another measure of control over the city's lucrative legalized lottery contracts to a small group of businessmen led by the family of William N. (Billy) Suter III.
The board selected Capital Gaming Inc. to supply the tickets for four instant-winner lottery games next year.
The new firm's corporate officers include Suter and two other officials who currently help him manage the instant-winner game, under a separate contract won last year.
In awarding the new ticket contract to Capital Gaming, the board passed over two national lottery ticket suppliers--Scientific Games Inc., the Atlanta-based company that is the current supplier of the city's instant game tickets, and Glendinning Companies Inc. of Westport, Conn.
Suter, whose late father was involved in the city's illegal numbers racket, is chief executive officer of Games Production Inc. (GPI), the company that manages the instant lottery game.
Suter's wife, Teresa, runs and owns a majority interest in the firm that does the advertising for both of the city's lottery games, the instant and daily numbers games.
So far, GPI and the advertising firm run by Suter's wife have received a total of more than $7 million in revenues from the nearly $70 million generated to date by the instant lottery game.
Capital Gaming could receive up to about $1.3 million from the new ticket contract if the board orders the full 44 million tickets called for in the contract.
During the instant lottery's first year of operation, the board awarded one outside contract for management, tickets and advertising, and that was given to a joint venture that was made up of GPI and Scientific Games.
Earlier this year, GPI and Scientific Games had a much publicized falling out after a top official of Scientific criticized GPI for alleged mismanagement and financial irregularities--claims that have been strongly denied by GPI.
When the board announced plans to award a separate ticket contract for next year, Suter, GPI general manager Gloria Decker, and GPI lawyer Joanne Fort formed Capital Gaming to compete for the ticket contract. Capital Gaming has now hired Webcraft Inc. of New Jersey, a national lottery ticket manufacturer, to print the tickets.
Board chairman Brant Coopersmith and members Lillian Wiggins and Jerry S. Cooper voted to award the ticket contract to Capital Gaming after receiving a staff analysis of all three bids in which Capital Gaming was ranked ahead of Scientfic Games and Glendinning, largely by virtue of having the most minority participation in its operation and the second-lowest ticket price.
Capital Gaming's price was $28.90 per 1,000 tickets, compared with $39.28 for Scientific Games and $28.70 for Glendinning.
Board member Carolyn Lewis, an ally of Mayor Marion Barry, did not vote and presented the board with a statement in which she criticized the bidding process and said the board lacked key information.
Lewis said she was concerned that the board had not received any financial information from Capital Gaming, formed just for this contract. Jeanette Michael, the board's attorney, said in an interview that it was proper to verify a firm's financial resources after it is designated and before the board actually signs the contract.
Lewis also expressed concern that staff members had breached security by opening two bid proposals before the third one was turned in.
Michael explained that bids from Scientific and Glendinning were opened by authorized lottery employes before Capital Gaming's bid was received, adding that all three firms subsequently submitted final proposals in which they were allowed to change key elements of the first bids, including ticket price.
In another development yesterday, City Council Chairman David A. Clarke criticized Barry for moving to replace board members Wiggins and Cooper, whose terms have expired, after they resisted Barry's efforts to influence their decision on a key lottery contract.
They have been serving until the nominations of John W. Posey, a University of the District of Columbia official and Alice Thompkins Davis, a Howard University alumni official, are approved by the council.
"The greater issue is to what extent is an independent body of the District of Columbia going to be allowed to be independent," Clarke said at a council committee hearing yesterday on the nominations of Posey and Davis.
Clarke said his comments were not directed at Posey and Davis, both of whom he called well-qualified to serve on the board.
But he said it would be difficult to continue to get qualified citizens to serve on quasi-independent city boards if the sole criterion for appointment is support for Barry. Clarke added that, while the mayor is entitled to appoint persons who agree with him to the executive branch, he should not replace members of quasi-independent boards because they don't follow his wishes.
Clarke said the council needs to decide "when and to what extent should the mayor involve himself in the decisions of independent bodies."
Clarke also criticized Barry for publicly calling lottery board member Cooper--a strong Clarke supporter--"a liar." Barry called Cooper a liar earlier this year when the mayor was defending his intervention into a dispute over the award of a key lottery contract.
"The mayor should not be permitted to call citizens liars," Clarke said, adding that Barry had promised him he would apologize to Cooper, but has not done so.