Lobbyist gave GTECH Corp. its crucial edge for contract Some question the tactics used to achieve change in lottery bidding.

July 24, 1991|By William Thompson | William Thompson,Evening Sun Staff

Like all outsiders, super lobbyist Bruce Bereano couldn't sit in on meetings where Maryland lottery officials and a few of the governor's lieutenants discussed the politically sensitive process of putting the state's numbers games out for bid.

But in the lobbying business, what you know is almost as important as who you know. And Bereano, the first Annapolis arm-twister to earn a million bucks in a year, was typically hungry for information to help his client, lottery giant GTECH Corp.

GTECH needed an edge in Maryland. As the world's fastest-growing vendor of lottery computer systems, the West Greenwich, R.I., firm had been watching the state's numbers games for years, waiting for the moment to pounce and oust the incumbent vendor, Control Data Corp.

Providing the state with a new lottery computer system and terminals would mean millions in profits. And once they had secured the Maryland contract, GTECH officials could raise another banner outside their gleaming new West Greenwich headquarters, where flags from dozens of state and foreign clients wave like so many battle trophies.

Bereano did what he had to do to give GTECH the edge. Through a combination of luck, hard work and what some say was questionable insider tactics, he virtually turned the lottery procurement process inside out, putting it within GTECH's grasp.

Within hours after some State Lottery Agency meetings, Bereano was on the phone from his Annapolis office, soliciting details or challenging agency officials about a decision they had just made.

It was all in a day's work for Bereano, but it raised nagging doubts about the role lobbyists played in the biggest non-construction contract in Maryland history.

What bothered a few people was that Bereano seemed to have someone on the inside leaking him information when no one outside official circles was supposed to know what was going on.

"There was a time when I thought that he had the offices bugged," Michael W. Law, the lottery agency's procurement officer, says half-seriously.

As far as he knows, what Bereano learned wasn't always critical, Law says in retrospect. Some of the information would have surfaced when everyone else involved in the procurement found out.

But getting the information first meant Bereano could reshape his strategy and keep his competitors off balance.

The strategy worked because beginning today, Control Data steps down and GTECH steps in as Maryland's lottery vendor.

Bereano reacts to the charges against him with a shrug and a few words.

"I did something that no one has done and I could never do it again," he brags, quickly adding that his work for GTECH included "nothing illegal, nothing shady."

Bereano won't say who leaked intelligence to him. "I have to take TC something to the grave," he says. Getting news fast and using it on his client's behalf, he says, was one of the reasons GTECH paid him $5,000 a month.

The official battle over the lottery contract came to an end five months ago when GTECH's winning bid of about $65 million came in about $15 million below Control Data's.

The low bid, plus GTECH's high marks from two panels of independent analysts, ensured victory in Maryland for the Rhode Island firm.

With the Maryland games secured and a Guatemalan lottery contract signed in late June, GTECH, an unknown a decade ago, now has a full deck of 52 clients.

The Maryland contract battle may be over, but the smoke hasn't cleared. Informal accusations that Bereano stepped over the ethical and legal lines separating lobbyists and the lottery procurement process pop up frequently, mostly from unhappy Control Data supporters who still find it hard to accept that GTECH was able to snatch away the state lottery contract.

Bereano's purported source inside the lottery agency is just one question. Did he have an unfair advantage because of his friendship with Gov. William Donald Schaefer and agency employees? Did he communicate with the governor and Charles L. Benton Jr., Schaefer's budget secretary, while other lobbyists were told to keep their distance? There are even whispers that federal officials want to know some of the answers.

Richard Bennett, U.S. Attorney for Maryland, says policy prohibits him from confirming or denying that an investigation into the lottery saga is under way. But, he adds, he routinely followed accounts of the procurement process in newspapers.

"I found those stories interesting," he says.

But Guy Snowden, GTECH co-chairman and CEO, finds the stories a bit tiresome.

"I think that the picture that is attempted to be made here is that GTECH is this heinous political force that comes in and politicizes the situation," he says. "I really don't think that's the case at all," he continues, adding that in Maryland he ended up "becoming a bystander" while newspapers portrayed the contract battle as a struggle between Bereano and Control Data lobbyist Alan Rifkin.

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