When D.C. Council chairman and mayoral candidate Vincent C. Gray heard that a supporter of Mayor Adrian M. Fenty had won a piece of the 2008 D.C. Lottery contract, he was determined to scuttle the award.
Mr. Gray wasn’t satisfied keeping D.C. businessman and former club owner Warren C. Williams Jr. out of the deal; he wanted one of his friends in on it. In the end, Mr. Gray got his wish — and outmaneuvered the mayor in the process.
Two years and a second round of bidding later, the tortured path to approval of a D.C. Lottery contract has produced a similar result — minus Mr. Williams as the local partner of lottery giant Intralot and with the addition of a Gray ally.
The D.C. Lottery saga offers more than a glimpse of a politicized procurement process. It also is a preview of the machinations and bitterness likely to shape the upcoming mayoral election that pits Mr. Gray against Mr. Fenty.
The $38 million lottery contract, approved by the D.C. Council in December, came under fresh scrutiny in recent weeks after Eric W. Payne, former director of contracts for the District’s chief financial officer, Natwar M. Gandhi, accused Mr. Gandhi in a lawsuit of firing him for complaining about the process to an internal oversight unit.
The election already is focused on which candidate is more beholden to his natural allies: Mr. Fenty to his college friends and their associates or Mr. Gray to the old guard of D.C. politics that held sway for more than 20 years.
At stake is whether the District will develop a reputation as a city where companies can do business on a level playing field or where cronyism and personal politics taint major contract awards and act as a deterrence to competition.
Mr. Gray did not return numerous telephone calls and e-mails seeking comment.
D.C. Attorney General Peter Nickles, speaking for Mr. Fenty’s office, said he “saw nothing to persuade me there was any taint to the procurement process.”
The lottery contract is one of the largest overseen by the chief financial officer, so as the bidding process geared up in 2007, staff members, lottery companies, lobbyists and politicians girded for battle. The contest was between two companies that run statewide lotteries: GTech and Intralot, both based outside the District.
GTech was part of a partnership that ran the city lottery for 25 years. Under the name Lottery Technology Enterprises (LTE), the firm teamed with local businessman P. Leonard Manning Jr., who has ties to several council members, including Mr. Gray.
But the Mr. Gandhi lost faith in LTE, Mr. Payne said in his lawsuit. In 2006, LTE issued $70,000 in phony lottery tickets and later was fined $1.4 million by the city. In 2007, LTE was assessed more than $300,000 in fines because of operational glitches.
Intralot was teamed with Mr. Williams’ company, W2Tech. Because of his business relationship with one of Mr. Fenty’s former fraternity brothers and because he had been awarded a number of large city contracts, Mr. Williams has been labeled a Fenty crony. He has been criticized for what Fenty foes claim are questionable real estate and nightclub ventures.
The politics played out in backrooms across the city and was highly personal. As the bidding began, Intralot was judged to have superior price and technology, Mr. Payne said. But as soon asMr. Paynetried to move the contract toward approval by the D.C. Council, he said, the process got bogged down.