Ill. Lottery paid for contracts to lotto chief`s old company - New York News

What are the odds? Ill. Lottery paid for contracts to lotto chief`s old company

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CHICAGO (FOX 32 News & Better Government Assoc.) -

FOX 32 and the Better Government Association have found the Illinois Lottery has been paying for contracts that went to a company that used to be owned by the lottery's chief administrator.

So, was it innocent or otherwise?

There's a word that kept popping up as we were working on this story-- "optics"-- meaning everything has to look above-board.

It's especially important in the lottery and gaming business. Because of "optics," the governor's office killed a lottery contract to the lottery director's old firm, but the firm changed its name and the contracts started coming. How that happened depends on whom you ask.

"I couldn't direct them. I couldn't force them. I couldn't make them do anything," Jones says. "They're the private manager."

Illinois Lottery Director Michael Jones says his hands are largely tied when it comes to handing out contracts. That's because a couple years ago, state legislators approved a plan to hire a private company called Northstar to run the day-to-day operations of the lottery.

Governor Quinn then appointed Jones as lottery director to work with Northstar.

Emails obtained by FOX 32 and the Better Government Association show that within days of his appointment, Jones started pushing to hire a Chicago-based company called Independent Lottery Research, a company that Jones helped found and partly owned until he took over the lottery.

"I'd say 'why don't we keep the money in Illinois? Why wouldn't we hire an Illinois company to do research on the Illinois lottery?'" Jones recalls of his conversation.

That contract was killed after Northstar and the governor's office complained it looked like a conflict--the "optics" problem. But, the next month, Independent Lottery Research changed its name to Independent Gaming Research and invoices show it immediately starting getting work on the Illinois Lottery--about $168,000 in a 1-year period.

Jones says he had nothing to do with picking the company and told us to ask Northstar – so we did.

A spokesman for Northstar's parent company GTECH says they gave the business to Jones' old company, because Jones wanted them to.

"The director... strongly encouraged GTECH to use ILR/IGR for various marketing research projects for the Illinois Lottery," says spokesperson Bob Vincent. "GTECH had not previously done business with those companies. The primary reason GTECH hired ILR/IGR was because of Director Jones' urging."

Jones suggests Northstar is trying to shift focus off the fact they have failed to meet several of the lottery's performance goals.

"What do I think is going on? Again, I think it's the classic, ‘hey look there's a kitty. Don't look at this, look at research. Don't look at performance in Illinois.' Let's look at something that's peripheral," Jones says.

Patrick McCraney of the Better Government Association says it all goes back to optics.

"His former friends and former co-workers gained from this, and that isn't fair," McCraney explains. "We think there should be some sort of time gap between when a person goes into the public sector, as to what kind of business they can do with their former company in the private sector. It isn't fair the way this worked out."

IGR's owner--and Jones' former business partner--is Matthew Smith. He told FOX 32 News that Jones had nothing to do with the deal to hire IGR and that Jones no longer has a stake in the company.

We also obtained emails from jones to the head of the Texas Lottery, asking that his old company get a chance to bid on a contract. Jones says he was just trying to drum up business for an Illinois company.

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