Emails show fight for D.C. Lottery contract

Mayor Vincent C. Gray, as chairman of the D.C. Council, in December 2008 was involved in initially blocking approval of a contract award to a company to run the D.C. Lottery. (Pratik Shah/The Washington Times)Mayor Vincent C. Gray, as chairman of the D.C. Council, in December 2008 was involved in initially blocking approval of a contract award to a company to run the D.C. Lottery. (Pratik Shah/The Washington Times)
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In alluding to the friction between Mr. Fenty and Mr. Gray, Mr. Bailey concluded: “The smarter play, especially for you, is to get this done now. I don’t think there has to be any precedent setting. [Our Nupe] can make it clear to the older guy that it is not. Rather than a compromise, our Nupe can play this as Barack would — put the best interest of the residents first; work with rivals; get this done.”

The deal would not get done. Mr. Williams declined to comment on the lottery or Mr. Bailey’s emails to him.

Instead, the lottery contract was rebid by the city’s independent chief financial officer, Natwar M. Ghandi. After Intralot won the rebid, the Greek gambling company, under pressure from Mr. Gray’s allies, including council member Marion Barry, appended a company controlled by Mr. Bailey to the deal. The council approved the union with little scrutiny and an endorsement by Mr. Gray, although The Times would later report in July 2010 that Mr. Bailey’s newly formed company had boasted of work it had not performed for clients who had never heard of it.

In November, less than a month after Mr. Bailey’s company assumed a 51 percent share of the lottery contract, D.C. Council member Michael A. Brown, at-large independent, quietly slipped a provision into a massive budget bill legalizing online gambling in the city under an intranet computer system run by the lottery.

The deal, which the city’s chief financial officer said would net more than $13 million through 2014, had the potential to revitalize a lottery that had been flagging as Maryland expanded its gambling options by legalizing slot machines in 2009, and as Virginia began cross-marketing lottery games also found in the District.

But after Congress declined to intervene and the program moved closer to implementation, Mr. Brown and his proposal faced increasing scrutiny, including a report by The Times. In denying that the proposal was impulsive, Mr. Brown said he was actively developing the idea of online gambling long before The Times reported on the buried gambling provision.

Mr. Brown does not deny that he is friends with Mr. Bailey, but insists he had no early involvement in the lottery contract. Asked whether he had any meetings with parties interested in the lottery contract in the winter of 2008, Mr. Brown replied, “Why would I? I hadn’t been sworn into the council yet.”

Yet he has spoken little about Mr. Bailey, whose company and relatives contributed $4,000 on the same day to Mr. Brown in March.

Reports that Mr. Brown failed to disclose a business relationship with a law firm that works in the gambling industry have prompted some news organizations to call for a “full airing” of his quietly inserted poker plan, and for a review “by the appropriate officials” of his role in crafting the plan.

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