“THERE ARE SO many questions surrounding the District’s tortured effort to get a new lottery operator that it is prudent that an outside review be conducted.” That was our view last summer when two top city officials asked Inspector General Charles J. Willoughby to review the handling of the $38 million lottery contract. Subsequent events — notably the sneaky way that plans were hatched for the lottery to offer online gambling — have underscored the need for scrutiny, but it’s unclear if any serious review is being undertaken.
It’s been more than a year since Peter J. Nickles, then attorney general, and former chief procurement officer David P. Gragan detailed concerns about the circumstances surrounding the D.C. Council’s award of the lottery contract to the Greek company Intralot. Of particular concern was that a local partner to the lottery operator was not properly vetted before the contract was awarded. Intralot first bid on the contract without having a local, minority partner, but on the eve of the council’s 2009 vote it entered into an agreement with Veterans Services Corp., giving the latter 51 percent of the equity in the joint venture running operations of the lottery. Adding a majority partner after the competitive bidding process was completed is one of the “anomalies” that “warranted scrutiny,” Mr. Gragan recently told the Washington Times.
But Mr. Gragan, a procurement expert who is now with the federal government, told the Times he’s never been contacted by the inspector general. Mr. Nickles, who returned to the law firm Covington and Burling, said he has seen no sign of any follow-up. Of the key figures involved in the issue, only one — Emmanuel S. Bailey of Veterans Services Corp. — told us he was interviewed by the office. A spokeswoman for Mr. Willoughby’s office said it is the office’s policy not to confirm or deny the existence of investigations.
Troubling issues have long surrounded the lottery. The previous operator of the games was embroiled in a scandal involving thousands of dollars of phony tickets. Efforts in 2008 to switch to a new company were doomed by the refusal (never explained) by then-chairman of the D.C. Council Vincent C. Gray (now the mayor) and the council to abide by the results of a competitive bidding process conducted by the chief financial officer. The former contracting officer who supervised the bidding has alleged that he was subjected to undue political pressure — from council members as well as from the chief financial officer — and says, in a pending federal lawsuit being contested by the District, that he was fired for resisting. Add in the secrecy that cloaked the District’s decision to become the first jurisdiction in the nation to legalize online gambling, and the need for an independent inquiry becomes clear.