The possibility of manipulation of the 2009 D.C. Lottery contract is not the only corruption angle that has drawn the attention of government investigators.
Current and former Lottery employees familiar with the operation’s inner workings have alleged that Lottery Executive Director Buddy Roogow forced staff to hold fundraisers for agency events, sell lottery tickets as unlicensed agents and grade college papers on government time for a course he taught, among other examples of “mismanagement and unethical behavior,” according to a letter sent to D.C. Inspector General Charles J. Willoughby and Ward 2 D.C. Council member Jack Evans.
The letter, written in 2011 and also sent to the office of Natwar M. Gandhi, chief financial officer, further charges that Mr. Roogow fired employees to make room for friends, paid them more than existing employees in the same or similar positions, overrode the decision of a three-judge hiring panel to install an unqualified former secretary of Lottery contractor Emmanuel S. Bailey as chief of marketing and engaged in various other “unfair” hiring and employment practices.
On Friday, a spokesman for Mr. Gandhi confirmed that his office received the letter, corresponded with the inspector general’s office and conducted an internal investigation, which was handled by the Office of Integrity and Oversight (OIO).
“The IG has all of the information from the investigation, and we have not heard back from them in many months,” said the spokesman, David J. Umansky.
Neither Mr. Evans, whose Committee on Finance and Revenue oversees the Lottery, nor Mr. Willoughby returned calls and emails seeking comment for this report.
Former investigators with the oversight office, which is responsible for independent audits and reviews of the chief financial officer’s operations and programs, say protocol is for the unit to determine whether the allegations are founded and either refer them to the U.S. attorney’s office for prosecution or additional action by the inspector general’s office, or to table them in favor of higher priorities.
Mr. Gandhi’s office did not respond to questions about the findings of the OIO, recently the subject of a “confidential, informal inquiry” launched by the U.S. Securities and Exchange Commission in the wake of news reports that exposed its practice of shielding internal reviews and audits critical of the chief financial officer’s office.
The award of the 2009 Lottery contract, to which Mr. Bailey’s company was appended after Greek gambling giant Intralot won a competitive-bid process, also reportedly is the subject of a federal investigation.
But the allegations reviewed by the OIO offer a glimpse inside the operation of the D.C. Lottery under Mr. Roogow, an operation that has transferred $12 million less to the D.C. general fund since he took over in 2009 than in the previous three years.
Interviews with sources involved with the writing of the letter said many were concerned with the role played by Gabrielle Barry, a former assistant to Mr. Bailey at Fannie Mae and DC09, the limited-liability company that controls a majority share of the Lottery contract.
The letter states that Mr. Roogow inserted himself into the hiring process and overrode the decision of a three-member panel not to hire Ms. Barry, who was not deemed qualified for a director post because of minimal lottery or marketing experience. Not only did Mr. Roogow hire her, the letter states, he rewarded her with a salary commensurate with directors who have more responsibility.
Mr. Roogow has brought on a number of friends and former employees from the Maryland Lottery, which he ran prior to coming to the District, the letter states. Once installed, the letter states, those friends have commanded higher salaries than their counterparts and either occupied duplicative positions or undermined or usurped the authority of existing managers.
The letter also states that in 2009, Mr. Roogow had his executive assistant, Thaddina Wiley, grade college assignments on government time for a course he taught. Ms. Wiley, according to the letter, filed a formal complaint that is under investigation by a separate agency.
Despite the existence of 400 licensed Lottery sales agents, Mr. Roogow has changed employee performance plans to include a requirement that they sell Lottery tickets “and handle cash at special events, where agents and sales staff were not present,” the letter states. The employees have been intimidated to engage in this sales effort, the letter states, without the requisite training, expertise or security provisions.
Staff members also were expected to contribute their own personal funds to conduct the fundraisers, the letter states, adding that “other employees felt intimidated to spend their personal funds to support these fundraisers.”
Former investigators from the OIO cautioned that the time lapse between the agency’s investigation and further communication from the inspector general’s office is not uncommon. They also warned that in some instances, the inspector general’s office specifically asks a unit like the Office of Integrity and Oversight to investigate its own agency, a practice that has drawn scrutiny and criticism for shifting investigative responsibility to entities with incentive to downplay their findings.