Newspaper: Lottery company wrote parts of N.C. law

Friday, Oct. 14, 2005 | 6:42 a.m.

Alan Middleton, vice president of Scientific Games, wrote to Black's office, saying he wanted to write a law that excluded other companies. Middleton had an inside connection to the speaker's office, according to hundreds of pages of e-mail messages, memos and other documents released by Black's office Thursday at the newspaper's request.

The company's connection to Black was through Meredith Norris, who was the speaker's unpaid political director and also was on the company's payroll.

Gov. Mike Easley signed the bill, which used Middleton's words, into law Aug. 31.

One key part of the law - a section that Middleton provided - requires state officials to "investigate and compare" the business practices, reputations, civil litigation, criminal records and other background information of potential lottery vendors.

Another part guided by Middleton gives state officials leeway in choosing a vendor. It specifies that lottery commissioners shall "award the contract to the responsible lottery vendor who submits the best proposal that maximizes the benefits to the State."

Scientific Games, based in Alpharetta, Ga., is one of the nation's largest lottery companies. It also pointed out problems associated with GTECH Holdings of Rhode Island, its chief rival. Those include a conviction of a former top employee for kickbacks and investigations in several states and countries. GTECH has said those problems involve former employees.

Middleton wrote to Black's office that the changed language his company wrote "protects" the state from other vendors "trying to break (into) the market that have questionable backgrounds."

The changes, he wrote, also "may further tighten some existing companies that have checkered past and current issues."

GTECH spokeswoman Angela Geryak Wiczek said Thursday that her company did not know about Scientific Games' involvement in writing the law and described the provisions as "unusual."

The records obtained by the newspaper show that Scientific Games, got access to the speaker's office through Norris, who arranged at least one dinner with Black and Middleton at a Raleigh restaurant.

She also helped Middleton recruit House and Senate members for a yacht outing along the Seattle waterfront during a legislative conference days before the final lottery vote. It is not clear from the records which legislators, if any, took the two-hour cruise.

The newspaper said Black, Middleton and Norris could not be reached for comment Thursday.

The state is in the early stages or choosing a vendor or vendors to handle the instant ticket and lotto numbers games for the $1.2 billion-a-year state lottery, expected to begin within a year.

Scientific Games' efforts also included the Senate. Middleton wrote in a memorandum to Black's staff lawyer that he provided the same language governing contract awards to the Senate, and it was adopted in that version of the bill.

The leading Senate lottery sponsor, Tony Rand, D-Cumberland, said Thursday that he couldn't recall how the language ended up in the Senate version. He said his staff may have spoken with Middleton, although he did not.

"It's something I would approve of having in there, you know, maximizing the benefit to the state and that kind of thing," Rand said.