- The Washington Times - Monday, August 29, 2011

Two former D.C. Cabinet officials are dismayed that their joint request for an investigation by the Inspector General’s Office of the D.C. Lottery contract has gone nowhere.

Former Chief Procurement Officer David P. Gragan and former Attorney General Peter J. Nickles said their July 2010 letter to Inspector General Charles J. Willoughby, calling for a review of Chief Financial Officer (CFO) Natwar M. Gandhi’s oversight of the lottery, was motivated by contract irregularities and questions on whether a 51 percent local partner to the $38 million contract was thoroughly vetted before being approved by the D.C. Council.

But more than two years after accusations of political meddling were first leveled at Mr. Gandhi and then-Council Chairman Vincent C. Gray, interviews with key witnesses and documents obtained by The Washington Times show that neither Mr. Gandhi nor Mr. Willoughby has fully probed a questionable deal that has drawn fresh scrutiny because of the lottery’s plan to launch the nation’s first online poker system.

Among the unexamined aspects of the lottery deal is previously unreported information provided to Mr. Gandhi’s internal investigators in 2008 that described a council member’s attempt to influence the contract - raising further questions about whether the District has sufficient independent oversight of a lottery now aiming to cash in with online poker.

Mr. Gragan, former procurement director for the states of Indiana and Texas, told The Times on Thursday he and Mr. Nickles saw “anomalies” in the lottery contract that he’s not seen in 18 years as a procurement officer - such as adding a majority partner to the lottery deal after the competitive bidding process was concluded - but he’s never been contacted by the Inspector General's Office (OIG).

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Now an assistant director of procurement at the federal level, Mr. Gragan said the matter “warranted scrutiny” by the OIG.

“The only person who can say what happened next is the inspector general,” he said.

“This is shocking,” said Mr. Nickles, now a partner at Covington and Burling, adding that while still in office he provided leads to the OIG and was personally assured of an expedited and thorough investigation. “If the inspector general has not interviewed the people whose names I provided, then he ought to be fired.”

The OIG confirmed it was in receipt of the letter from Mr. Nickles and Mr. Gragan, but would not “confirm or deny the existence of any investigation,” said Roger Burke, chief of staff to Mr. Willoughby. He also declined to respond directly to Mr. Nickles‘ comments, but added: “We do not succumb to political pressure.”

In recent months, The Times has identified more than a half dozen sources intimately familiar with the controversial lottery contract who say they have never been contacted by the OIG.

Tom Lindenfeld, a political consultant who worked closely with two different companies that bid on the contract, including Intralot, said he doubts any investigation was ever conducted.

“I don’t know anyone who’s been contacted,” he said. “I have no indication that they are engaged in an investigation.”

Mr. Gandhi’s office did not dispel the notion that the OIG did not follow through on the request by Mr. Gragan and Mr. Nickles. In an interview with The Times earlier this year, David J. Umansky, a spokesman for Mr. Gandhi, scoffed at the prospect. “What investigation?” Mr. Umansky said. More recently, Mr. Umansky confirmed that no one from the CFO's office has been contacted by the OIG in over a year.

Mr. Umansky also insisted that the lottery contract is aboveboard, and said the council can change or waive procurement rules as it wishes.

No insight offered

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