Memo tells of politics, power for D.C. lottery deal

City Council cronies clashed with mayor

As a federal grand jury weighs evidence that key figures in D.C. business and politics manipulated the city’s lottery contract because of political considerations, the international gambling firm that won the $38 million-a-year deal in 2008 and again after a rebid a year later has remained largely silent.

But a previously unexamined internal memo drafted by Greek company Intralot SA during that period offers its inside view of a toxic climate in the District of Columbia that prompted the vendor to spend more time worrying about local political machinations than about the lottery itself.

The memo, labeled “confidential,” was never intended for distribution and has since been described as “false” by its author. Yet it was distributed in 2009, with at least one source saying they were told it represented the firm’s thinking at the time. It details a process that became necessary when the existing contract controlled since 1984 by competing firm GTech Corp. and local businessman Leonard Manning was due to expire.

After partnering with local firm W2Tech LLC, headed by Warren Williams Jr., an ally of former Mayor Adrian M. Fenty, Intralot was awarded the contract on the basis of technical merit and pricing, the memo states.

“The fact that Intralot won was a shock not only to [Mr. Manning and GTech] but to the entire D.C. infrastructure,” the memo states. “It was what Intralot did not see that gave us problems.”

Consistent accounts

The document suggests that after the initial contract award, which Mr. Fenty urged the D.C. Council to approve, D.C. power broker and lobbyist-lawyer David W. Wilmot reached out to Vincent C. Gray, who was council chairman, and council member Marion Barry.

“Dave realized the mayor’s people won and therefore no one but the mayor would gain” from control of the lottery contract, the memo states. “They decided to delay the process so a new plan could be put in place.”

That plan, according to the memo, involved provoking D.C. Council member Jim Graham — who had clashed publicly with Mr. Williams and fellow Fenty ally Sinclair Skinner — to oppose the award “by telling [Mr. Graham] that Skinner ran the deal.”

Mr. Skinner denied that he “ran the deal,” saying that his vocal support for the Intralot-Williams team was “purposely mischaracterized to undermine” a legitimate contract award.

Mr. Gray and Mr. Barry, who in the past have denied wrongdoing on the lottery contract, did not respond to requests for comment for this report.

Byron Boothe, vice president for government relations for Intralot, acknowledged writing the memo, but he recently disavowed its assertions and assumptions.

“The memo is false,” Mr. Boothe said. “We have no further comment.”

But the memo alludes to several key points that have been consistent with information that subsequently has been made public, raising questions about some of the other players and parties that the company identified.

For example, what later emerged but was unmentioned in the Intralot memo was a June 2008 meeting between Mr. Graham and representatives of Mr. Williams, who say the council member offered his support on the lottery contract if Mr. Williams would withdraw from a development joint venture at a Metro station won by a firm that also had ties to Mr. Fenty. The Washington Times first reported on the allegations, which were based on an exchange of emails between Mr. Williams and his associates and attorney. Metro authorities have called for a separate investigation of those allegations by an independent lawyer, while Mr. Graham, Ward 1 Democrat, strongly denies any wrongdoing. He declined to comment for this report.

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