State auditor questions Lottery agency selection


William Holland, Illinois Auditor General, seeks Lottery answers

IT AIN’T OVER ‘til it’s over.  Close followers of our extensive reporting last summer and fall on the protracted process to select the first ever private manager for the Illinois Lottery already know there were plenty of questions raised along the way.

When William Holland, the Auditor General of Illinois, released a report Tuesday that included an examination of the entire private manager procurement process, it was immediately apparent he too had discovered a lot to question in the way the Illinois Dept. of Revenue and Illinois Lottery acting superintendent Jodie Winnett conducted the process that resulted in the selection last September of the Northstar Lottery Group as the Lottery’s first private manager.

But it has not been an entirely smooth or swift transition to private management. Even as this is being written Northstar is still in the process of taking full control of the entire Lottery operation in Illinois.

Northstar is comprised of ad agency Energy BBDO/Chicago, Gtech and Scientific Games.  All three were Lottery vendors when they banded together as Northstar at the last minute to compete with two other candidates for the lucrative private manager contract.  Energy BBDO was (and still is) in charge of advertising and marketing.

The auditor general’s report is chock full of concerns about the way the selection process was handled.  Among them are questions about how evaluators who judged the candidates could have thoroughly read and analyzed and scored hundreds and — in some cases — thousands of pages of documents in a matter of just a few days.

The auditor general also raised questions about how the evaluation committee was selected, describing that process as “non-formalized,” with most members seemingly randomly selected from the Illinois Department of Revenue, and, in one case, from Gov. Pat Quinn’s office.  What’s more the auditor general indicated that his evaluation of the private manager selection process showed some on the evaluation committee were not present at crucial meetings.

How agency candidates were qualified raised questions 

Most importantly, the auditor raised questions about whether evaluations of candidates for the private manager job were certified and submitted in a timely fashion. Of course, the Dept. of Revenue insists that evaluations were submitted via e-mail in a timely fashion, even if hardcopy versions were not.  But that’s not what the auditor general concluded.  Holland said both electronic and hardcopy evaluations “were not timely.” 

State comptroller Judy Baar Topinka

A Dept. of Revenue spokesman said the department disagreed with the auditor general about the facts regarding when and how the evaluations were submitted.  But the auditor general fired back in his report that it was really impossible for the department of revenue to have a different take on the timely submission of materials because facts are facts, not subject to interpretation.

As if all these issues weren’t enough to leave one wondering about how legitimate the Lottery private manager selection process was, the state comptroller also still does not have in her possession a completed, approved copy of the private management contract with the Northstar Lottery Group.  That comptroller happens to be Judy Baar Topinka, a Republican.

The Dept. of Revenue spokesman said several versions of the contract have gone back and forth to the comptroller, but a satisfactory version has yet to be produced.

What becomes of the auditor general’s report?  

The Dept. of Revenue spokesman said the audit committee of the state legislature could examine the report and decide whether further action is required.  So it certainly may not be all over. But for now, Energy BBDO and its two partners in Northstar are moving forward with their plan to manage the Illinois Lottery, with Energy BBDO handling the marketing and advertising.

It should be noted the Illinois Lottery could soon become a separate department in state government.  The Lottery currently operates as a unit within the state department of revenue.  The legislation to effect such a change is sitting on Quinn’s desk awaiting signing. But the Dept. of Revenue spokesman said it’s unclear what action Quinn will take, or when he will take it. 

In the meantime, Jodie Winnett continues as acting superintendent of the Lottery.  But don’t be surprised if, when all the dust has settled, the Lottery has a new top boss.

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