The District’s lottery contract saga just got messier. Taxpayers likely will have to cover cleanup costs. Eric Payne was fired last week by Chief Financial Officer Natwar Gandhi.
Payne managed the procurement process that led to the recommendation that a new company, W2I, receive the multimillion-dollar, multiyear contract. That recommendation proved controversial and may have led to his dismissal, say government sources.
Reached by telephone this week, Payne declined to comment on the specifics of his termination. But he said throughout his tenure he received impressive evaluations, leading to performance bonuses, a “special act” award and salary increases; his starting salary was about $92,000, and four years later he was making $136,000. When asked if he intended to sue the city, Payne said, “I am exploring all my options.”
That means “you betcha,” for those unfamiliar with lawsuitspeak.
Payne may not be the only one suing the city. A. Scott Bolden, W2I’s attorney, said, “We’re looking at a number of legal options. [Payne] would be witness number one for W2I.
“Nothing but politics have permeated this entire process,” continued Bolden, managing partner at ReedSmith. “Something is very wrong with that.”
This all began when the city went looking for a new lottery contractor. The current vendor, Lottery Technology Enterprises, has been running the operation for two decades. It doesn’t appear it has done a good job; LTE received a fine of more than $1 million for failing to meet its obligations.
In walked W2I. But the head of LTE, P. Leonard Manning, a frequent and generous campaign contributor, had powerful allies on the D.C. Council. Awarding of the contract stalled for several months. Then, in December, the legislature voted not to award it to W2I, although an appeals board ruled the process had been fair.
Even before that council vote, Payne was caught in a political squeeze. Sources say Payne bristled when asked if there was a way to keep the contract with LTE. He subsequently went to the CFO’s investigations and oversight division, which handles ethics violations among other matters, and requested a full examination of how contracts were being handled by the CFO.
David Umansky, CFO spokesman, disputed that any investigation was requested. Further, he said, “No member of the council or the mayor’s office discussed with Dr. Gandhi who should get the contract and no pressure was applied by either.”
Umansky declined to discuss Payne’s dismissal: “Lots of things go into a decision like that. [But] it had nothing to do with the lottery.”
District residents may soon learn what happened inside Gandhi’s office. The inspector general is starting an audit of CFO contracting and procurement, according to Deputy IG Austin Anderson. The CFO spent in fiscal 2007 about $45 million on contracting and $10 million more for equipment and services.
That amount of money and the political shenanigans associated with the contract warrant a thorough investigation.
