- The Washington Times - Sunday, February 12, 2012

Within weeks of an inspector general’s report that criticized a bid by the D.C. Lottery to launch a first-in-the-nation online gambling program, the deal was dead.

Yet despite the inspector general’s findings about the misrepresentations and lack of qualifications of a local subcontractor on the $38 million contract, city officials refuse to condemn or defend a 51 percent share that went to a Maryland businessman who had no gambling experience, who operated out of his mother’s duplex in Southeast D.C., and who was added as a “disadvantaged” subcontractor after the bid had been competitively awarded.

The implosion of online gambling, known as iGaming, and the lingering concerns about the questionable lottery deal with businessman Emmanuel S. Bailey come as city officials face multiple criminal investigations and labor to restore public faith in government.

But the inspector general’s findings and the deflection of responsibility by D.C. officials suggests that the lottery deal — the city’s largest contract, awarded in 2009 to Greek company Intralot — remains a political hot potato almost two years after irregularities were exposed.

“The inspector general raises serious issues,” said council member Jack Evans, the Ward 2 Democrat who oversees the lottery as chairman of the Committee on Finance and Revenue. “The question is, who needs to look into it? The council has proven time and again to be not up to the task of conducting investigations.”

A house in Southeast D.C. is the address Emmanuel Bailey gave to register his company, Veteran Service Corp., but the duplex is his mother's home. (Barbara L. Salisbury/The Washington Times)
A house in Southeast D.C. is the address Emmanuel Bailey gave to ... more >

In his report on oversight hearings that he conducted, Mr. Evans questioned the process by which the original Intralot contract was adopted. Last week, he said he has had conversations with D.C. Attorney General Irvin B. Nathan, but he would not elaborate.

“Are we supposed to refer it to the U.S. attorney?” he added. “You know how that goes. We’ll get a response in about a hundred years.”

Asked to confirm whether Mr. Evans referred the matter, a spokesman for Mr. Nathan said, “We have determined it would not be prudent to comment when this matter is in its current state of flux.”

Despite statements before last week’s repeal of iGaming that suggested he might move to scrap the lottery deal, Mr. Evans revised his position on the advice of the council’s attorney, who said the council“cannot unilaterally cancel a contract executed by the chief financial officer.”

General counsel David Zvenyach would not comment on his advice to Mr. Evans, but told The Washington Times in an email: “I have a responsibility to the institution to maintain my independence, [and] not involve myself [in] what are essentially political matters.”

Political silence

The corrosive effect of pay-to-play politics in light of the council’s role in approving contracts and the misuse, if not abuse, of requirements for hiring businesses classified as disadvantaged are at the forefront of civic debate.

The lottery contract — with a tortured history of generational rivalries and backroom maneuverings — embodies the issue.

Of the council members who voted to approve the 51 percent arrangement, few responded to questions last week.

Yvette M. Alexander, Ward 7 Democrat and the beneficiary of a fundraiser and direct political contributions from the subcontractor, closed her door Thursday in the face of a reporter asking about the deal. Muriel Bowser, Ward 4 Democrat and another beneficiary of political contributions from the subcontractor, did not return calls or emails or respond to a visit to her office.

Story Continues →