Oregon lottery chief resigns

Brad Cain

Tuesday, Dec. 3, 2002 | 9:45 a.m.

SALEM, Ore. -- Embattled Oregon Lottery Director Chris Lyons announced her resignation Monday, only weeks after an audit found $750,000 in questionable expenses and perks provided to Lottery employees.

Lyons cited personal reasons for her resignation, including the recent death of a family member.

An audit issued Nov. 12 by Secretary of State Bill Bradbury found that the Lottery has allowed some employees to fly first class and others to stay in expensive hotels while traveling on Lottery business.

Bradbury's audit also found that the state-run gambling enterprise spent too much money sending groups of employees to out-of-state conferences.

Lyons and other Lottery officials defended the expenditures, saying the Lottery is a big moneymaker for the state and needs to be able to operate much like a private business.

Lottery spokesman Lou Torres said Monday he has "no idea" whether the critical state audit was part of Lyons' decision to resign.

Lyons was appointed Lottery director by Gov. John Kitzhaber in September 1995. Before that she was administrator of the Oregon Liquor Control Commission.

After the audit was issued, Kitzhaber urged the Lottery to use the audit's findings "to re-examine how it manages and oversees the money it spends on administration."

Kitzhaber said Monday he didn't ask Lyons to resign, although he said he "accepts her decision."

Kitzhaber plans to appoint an acting Lottery director soon, but will leave it up to Gov.-elect Ted Kulongoski to choose a permanent replacement after he takes office next month.

Kulongoski spokesman Scott Ballo said Monday the incoming governor welcomes the opportunity to appoint his own Lottery chief.

"You look at the audit, and obviously there are some problems" at the Lottery, Ballo said.

While Lyons and other Lottery officials made little secret of their desire to have the Lottery expand its video games to include electronic slot machines, Kulongoski has opposed any expansion.

"This allows us the opportunity to makes some changes in the direction of the Lottery," Ballo said.

The Lottery has proved to be a financial success since it first was authorized in 1984.

It currently generates $350 million a year in profits for the state, with the money targeted for education, economic development, parks and salmon restoration and gambling addiction treatment programs.

But Bradbury, in his audit last month, said the Lottery's high spending on administration and travel occurred in part because the lottery operates under its own set of rules "or sometimes no rules at all."

He said Lottery officials need to recognize that "they are spending our funds, not their funds."