Is this deja vu all over again? Is 2003 a repeat of 1988? The descriptions are the same: Lottery employees, Scientific Games, GTech, Karsh and Hagan, and the lottery directors.
In February 1986, Sherry Harrington was appointed lottery director, a state civil service position. The Rocky Mountain News reported Harrington saying lotto was important to the lottery's health. This didn't endear her to Gov. Roy Romer who was adamantly opposed to adding lotto.
For many years, the Joint Budget Committee (JBC) voted not to fund a lotto program for the state lottery. In 1988, lotto proponents skipped the JBC and introduced a bill to establish a lotto game so that lottery money could be spent on state prisons.
Final version of the 1988 lotto bill passed the Senate 18 to 16 and the House 37 to 22. Gov. Romer vetoed the bill. According to press reports, major lobbyists worked on behalf of lotto and Republican leadership began the equivalent of twisting arms and breaking knee caps to get votes needed to override the veto. They succeeded: 24 in the Senate and 44 in the House. Romer felt Harrington played a role in overriding that veto.
That summer, bids were opened for the lotto contract. GTech Corp was low bidder by about $8 million, but according to a report by the Attorney General's office, Harrington lobbied the lottery commission to award the contract to Scientific Games, the next lowest bidder, based upon a crime committed by a GTech official. Harrington was suspended as lottery director July 1st and (being under civil service) moved to a public relations position in the Dept. of Revenue.
In September, Harrington was restored to lottery director, allowed to resign and received according to the Denver Post "an undisclosed amount of cash for going off the state payroll."
Here is where 1988 and 2003 converge. In the same month Harrington left, the Revenue Dept. head had asked the Attorney General's (AG) office to "look into improprieties by Harrington during her tenure as lottery director". At that time Colorado statute 24-35-209(1)(b) provided no gift, gratuity or other thing of value shall be received from any person contracting with the lottery. There were felony penalties. Purpose was to keep the lottery "squeaky clean".
On April 4th and 11th, 1989, the AG's office made public two memorandums alleging Ms. Harrington accepted "things of value" from lottery contractors, with about $4,500 spent on Ms. Harrington by Scientific Games and Karsh and Hagan. The AG finding:
According to the April 4th, 1989, report, Scientific Games had refused to make voluntary disclosure. On Dec. 6, 1988, the AG had obtained and executed a search warrant in Atlanta, Scientific Games home office, seizing their business records relating to the investigation.
Following the AG reports, an amended law now requires the lottery commission to set regulations allowing only nonpecuniary items of insignificant value, and to hold contractors liable for "offering" above the figure, set presently at $50.
In 2003 the lottery commission awarded a contract to Scientific Games for both scratch games and lotto, easing out GTech. The Colorado Bureau of Investigation seized 23 lottery computers "as part of an investigation by the Arapahoe County district attorney" requested by Revenue chief M. Michael Cooke as to whether any gifts violated the lottery criminal sanctions. She told the Denver Post "If I find anything that has any sense that there was influence or anything inappropriate about that contract, we'll go back to Square 1."
In 1988 and 2003, two lottery directors resigned. The Revenue chiefs requested two investigations. Records were seized in 1988. Computers were seized in 2003. Unallowed gifts were alleged both years. Karsh and Hagan and Scientific Games defended their present gift giving in two Denver Post articles. In 1988 and 2003. the lottery commission faced two competitors for major contracts: Scientific Games and GTech.
In 1989, the lottery law was amended. In 2004, it will likely be amended again.
(Jerry Kopel served 22 years in the Colorado House.)
Copyright 2012 Jerry Kopel & David Kopel