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Gray, Barry backed lottery partner

Probe called ‘retaliation’

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When the D.C. Council approved the city's lottery contract in December, two members spoke before the vote on behalf of the local firm that walked away with a majority stake in the deal: Chairman Vincent C. Gray and Marion Barry.

Besides both having a previous work relationship with a principal of the local firm, Veterans Services Corp. (VSC), the two lawmakers had something else in common: They both had discussed the issue of a local partner with a lobbyist for the Greek gambling firm Intralot that was awarded the contract.

In fact, Mr. Barry told The Washington Times this week that he let Intralot know it needed to take on a local partner if it wanted the council to approve the $38 million lottery pact.

"I sent word that the contract was DOA without a local partner," Mr. Barry said Monday, a day before D.C. Attorney General Peter J. Nickles wrote to the inspector general and called for a probe of the troubled contract.

Mr. Nickles told The Times on Wednesday that an investigator had been assigned to the case.

Mr. Gray, a candidate for mayor, on Wednesday reiterated his calls for the mayor to fire the attorney general and described the call for an investigation as "petty political retaliation."

"This once again proves why Peter Nickles should be removed from office," Gray campaign spokeswoman Traci Hughes said.

Mr. Nickles also sharpened his criticism of Mr. Gray, who is not mentioned by name in the letter to the inspector general. Mr. Nickles said the council chairman allowed, among other things, a substantial portion of the contract to be handed to a "complete unknown."

He said he has no explanation of why an international gambling company that delivers state-of-the-art systems to lottery organizations worldwide felt compelled to team with an inexperienced firm that had questionable credentials.

Mr. Barry volunteered an answer.

"Three or four of us were trying to quietly get Intralot to put together a minority partner deal," he said.

Asked to identify which colleagues joined him in persuading Intralot to take on a local partner, Mr. Barry declined to name names. He went on to say that members of the Committee on Finance and Revenue - specifically Harry Thomas Jr., Ward 5 Democrat, and Kwame R. Brown, at-large Democrat - were free to talk with lobbyists.

Mr. Thomas did not return calls for comment.

Mr. Brown, a candidate for council chairman who prides himself on being an advocate for local jobs, said he never told Intralot it needed to take on a local partner.

"I'm denying what Marion Barry said," Mr. Brown said.

Several other council members previously told The Times that they did not tell Intralot officials they needed a local partner.

Nevertheless, Intralot lobbyist and former council member Kevin P. Chavous had a partner in mind: Emmanuel S. Bailey - a man familiar to Mr. Barry and Mr. Gray.

In the 1990s, Mr. Gray worked and socialized with Mr. Bailey's mother, Barbara Bailey, when the two were employed at the D.C. Department of Human Services. Mr. Gray had met with Mr. Bailey and Mr. Chavous and discussed the lottery in October 2008, while a previous Intralot award was pending before the council.

Mrs. Bailey also served as Mr. Barry's labor liaison when he was mayor and worked on several of his campaigns, including his 2008 re-election bid, during which he paid her a $500 stipend.

As chairman of VSC, Mrs. Bailey would be part of the lottery deal.

For that reason and others, Mr. Barry quickly supported Mr. Bailey.

"What they are doing is the old American way," Mr. Barry said of the Baileys. "Mothers, sons, fathers getting involved in business together.

"I saw an opportunity for a reputable, substantial black businessman to get into the lottery business," he said. "I commend Mr. Bailey on his maneuverability to get himself 51 percent of the deal."

Mr. Bailey has connections to other council members.

In June, after the Intralot-VSC partnership was approved, he co-hosted a fundraiser for the constituent services fund of council member Yvette M. Alexander. Ms. Alexander's Ward 7 seat was formerly held by Mr. Gray and before that by Mr. Chavous, the other host of the event. Ms. Alexander said the event brought in more than $6,500. A third of that came from Mr. Chavous, Mr. Bailey and two companies that list Mr. Bailey as a principal.

Ms. Alexander and her colleague, Michael A. Brown, at-large independent, recently co-introduced a bill that would require local partners to control at least 50 percent of future lottery contracts. But they denied any knowledge of how Intralot came to hire VSC as its local partner on the lottery contract.

Mr. Gray also was a co-sponsor of that bill.

Mr. Bailey was not Mr. Gray's first choice to partner on the lottery. The council chairman supported another local firm that had among its principals the woman who is managing his campaign for mayor. But that firm was disqualified during the procurement process.

Mr. Bailey and VSC, though, were more palatable to him than Intralot's first partner, a company headed by a man with ties to Mayor Adrian M. Fenty. A whistleblower who has filed a federal lawsuit alleges that Mr. Gray actively attempted to scuttle that deal.

The Gray campaign said Wednesday that Mr. Gray "handled the council's consideration of the contract in the best interest of the citizens of the District of Columbia" and again pointed out that Mr. Gray abstained from voting on the final contract.

However, the chairman exercised his discretion in scheduling the council vote on the Intralot-VSC contract - after declining to bring to a vote the contract with Intralot and the Fenty ally. Mr. Gray's council office declined to comment.

The 9-1 vote to approve the Intralot contract came a week after Mr. Bailey and an Intralot official appeared together before a council committee chaired by Mr. Gray and announced their partnership.

"I was mightily impressed by the folks who represented VSC," Mr. Gray said from the dais on Dec. 1 before the council vote. "I wish they had been in this solicitation from the beginning."

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