Lots of Lottery Smoke, But Maybe No Fireman


August 25, 1991|By BARRY RASCOVAR | BARRY RASCOVAR,Deputy editor of the editorial pages of The Sun.

Because of an editing mistake, a Perspective column i Sunday's editions of The Sun concerning the State Lottery Agency erroneously attributed a statement to Attorney General J. Joseph Curran Jr. It was, in fact, the lottery agency's procurement officer, Michael Law, who said that even if there were grounds for an inquiry, his office -- part of an agency with a $35 million operating budget -- has "no resources" to pursue allegations of wrongdoing.

The Sun regrets the error.

Now that the Attorney General J. Joseph Curran has taken a dive, it is up to United States Attorney Richard D. Bennett to decide if the whiffs of smoke that were rising from the State Lottery Agency warrant a formal inquiry. After all, that smoke might actually come from a fire that needs dousing.

What's been occurring at the lottery agency is mighty peculiar. A $60 million contract to purchase new computer terminals turned into a political battleground for influential lobbyists, legislators and aides to the governor. The state's model procurement law -- enacted to avoid any new contract scandals and allegations such as those that surrounded Spiro Agnew and Marvin Mandel -- was junked. And the company with the strongest ties to the Schaefer administration ended up with the lucrative contract.


How has the state's elected legal-eagle reacted to all this?

Attorney General Curran has remained remarkably silent. His deputies have failed to respond to written inquiries from the losing bidder about possible shenanigans. In fact, one of his assistants said she concurred with a letter from the lottery procurement officer noting that no investigation was required. Even if it were, Mr. Curran said, his office -- part of an agency with a $35 million operating budget -- has "no resources" to pursue allegations of hanky-panky.

Mr. Curran is faced with a dilemma. On the one hand, he is Maryland's top prosecutor and legal official. But he and his staff are also the lawyers for the lottery agency. He cannot investigate the lottery contract while at the same time serving as the agency's legal representative.

That inherent conflict has effectively neutralized Mr. Curran in this long-running controversy -- and this leaves it squarely up to U.S. Attorney Bennett. Will he launch a formal inquiry into the goings-on surrounding the award of the lottery contract?

The U.S. Justice Department and the FBI have been nosing around this matter for more than a year. They have gathered reams of information. But are there sufficient legal grounds on the federal level to launch an inquest into possible bid-rigging and anti-trust violations?

The losing bidder, Control Data, thinks so. Its lobbyist, Alan Rifkin, has been complaining loud and long about the apparent coordinated effort by the three other initial lottery bidders to circumvent the normal state bidding process.

Then there's the matter of obtaining inside information on the contract awards. Apparently both Mr. Mandel and Bruce Bereano, lobbyists for the winning GTECH company, gained access to information from the lottery agency and the Schaefer administration. Their influence was considerable.

For instance, Mr. Bereano wrote a memorandum on Sept. 25 calling the state's bidding process "a sham" because he said it tilted toward Control Data. He recommended lottery officials be barred from the selection process because they were tied too closely to Control Data.

Two weeks later, Mark Wasserman, the governor's chief of staff, passed this memorandum along to the governor with a note warning of the "potential for innuendo and political complication" unless changes were made in the bidding process.

Sure enough, within three weeks, the governor abrogated the normal procurement process and adopted Mr. Bereano's advice instead. The new arrangement, while designed to make the process "lily white" (in the governor's words) seemed to tilt the procurement process toward GTECH and away from Control Data.

Was this coincidence or undue influence?

Both Mr. Bereano and Mr. Mandel have proudly noted their keen sources of insider information about lottery activities. They have bragged about their ability to turn a nonpolitical bidding process into a political controversy, an arena in which they could use their considerable lobbying skills and close connections to the governor. In the end, their client won the contract.

But did these activities go beyond the bounds of propriety?

That's a tough call. It puts the U.S. attorney in a difficult position. Dick Bennett is still new to his job. He is articulate, popular among state Republicans and politically ambitious. A high-visibility investigation could propel him into the public eye.

But he's got to be sure he has a solid case, one he can win. Otherwise, he'll be accused of launching a witch hunt. That might end his aspirations for elective office.

Control Data's complaints may have even more merit than GTECH's earlier complaints about unfairness in the state's bidding procedure. Why is it that the Schaefer administration responded so willingly to GTECH's protests but has ignored Control Data's?

Why did the administration exclude officials from the lottery agency from the selection process, even though they had the most expertise to determine the best bid in what is admittedly a highly technical field?

And if the governor didn't trust lottery officials to run an honest procurement process, why hasn't he replaced them?

Sadly, these questions may remain unanswered. This might prove to be one case where there is plenty of smoke but no one

is interested in locating the fire.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.