The president of a firm that rents office and warehouse space to the D.C. Lottery Board lent a car to the wife of a top lottery official about the same time the firm obtained approval to do more than $30,000 a year in business with the board.
Alex Exum, the lottery's $45,048-a-year executive assistant in charge of marketing and advertising, was placed on administrative leave with pay for 10 days yesterday in connection with his wife, Lolita, being lent a 1984 Honda Accord by Han Yong Cho, the president of a firm that leases space to the lottery board. Exum said his wife has had the car for about eight months and is still driving it.
Lottery Board Executive Director Douglass Gordon said he has asked the D.C. inspector general office's to investigate the matter. "It certainly on the surface represents a potential conflict of interest, whether it is or not will be determined in the investigation," Gordon said.
Exum said yesterday through his attorney that Cho lent his wife the Honda, but he said the loan and Cho's business relationship with his wife had nothing to do with him or with the lottery board's involvement with Cho.
Cho said he lent the car to Exum's wife after he asked her in January or February to help find new accounts for his wholesale food business, which is called Washington Cash & Carry. Cho said he has had a business relationship with Mrs. Exum that began long before he started doing business with the lottery board.
The Lottery Board agreed to lease 5,060 square feet of warehouse and office space from Cho on Jan. 21 at the rate of $5.75 per square foot a year, which totals about $2,400 a month, according to lottery records. Cho also receives about $600 a month in maintenance and other fees, according to lottery officials.
Cho said his business relationship with Mrs. Exum, including the loan of the car, has nothing to do with his dealings with the lottery board.
Cho said Mrs. Exum so far has not yet found him any new business and he has not paid her for her services other than loaning her the car to help her carry out her work for him.
He said he is continuing to pay the car's insurance and loan.
Exum said the car is for his wife's use. "On occasion I may have driven it on the weekends inadvertently," Exum added.
Last week, D.C. Auditor Otis Troupe recommended that Exum be fired for his role in the lottery board's purchase of a $299 video cassette recorder that is missing. Exum, in a statement released last week, said he did not receive the video cassette recorder in question and added he was confident he would be exonerated.
At Gordon's request, the inspector general is also investigating the purchase of the cassette recorder.
Troupe and other critics of the lottery board, including City Council member Nadine P. Winter (D-Ward 6), who has oversight over the lottery, have repeatedly criticized the lottery's purchasing and contracting procedures.
The FBI, for more than a year, has been investigating the board's relationship with outside contractors.
Exum's attorney, Mark B. Sandground, said yesterday that the placement of Exum on administrative leave is another attempt by "political forces to put Alex Exum in the middle" of the controversy surrounding the lottery's operations.
In addition to leasing space to the lottery board, Cho's business, located in the wholesale food market area at 1270 Fourth St. NE, also serves as a distribution center of instant lottery tickets to stores and other retail lottery ticket sellers. Cho receives a commission from the lottery board for each ticket he sells.
Exum said that he recommended Cho, along with several other businesses, to be a wholesale ticket distributor when he did a study on the board's takeover of the instant lottery game from a private contractor.
Exum said the decision to select Cho as a distributor was made by other lottery officials.
Exum said he played no role in the lottery board's subsequent decision to rent office and warehouse space from Cho for the operation of the instant lottery game.
Willis Johnson, a lottery official who chaired a task force studying the takeover of the instant lottery game, said yesterday that Exum first brought Cho to the attention of the task force as a possible distribution center.
Sandground, Exum's attorney, said Cho gave Exum's wife the car in about March. The Honda was registered in Cho's name with the state of Virginia in March, according to a Virginia motor vehicles official.
Sandground said Exum's wife has been a teacher in the D.C. public schools for two years but she also is president of a private consulting business that has done work for Cho and other Korean American businessmen over the last few years.
Sandground said that Cho paid Mrs. Exum $500 in the summer of 1983 for her help in putting on a Korean Festival here.
He said that Cho lent the car as compensation for a survey Mrs. Exum is doing to help him find new retail food outlets, a job that she is continuing to perform.
"I have not yet gotten a report from her," Cho said yesterday.
"I have not yet made a decision about getting back the car from her," Cho said. "Pretty soon probably we might make a decision."