Jonetta Rose Barras: Another lottery scandal — really

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Local,DC,Jonetta Rose Barras,Gambling,Phil Mendelson,Scandal

D.C. Chief Financial Officer Natwar Gandhi imagines himself invincible. Why else would he court another multimillion-dollar lottery scandal — even as U.S. Attorney Ronald Machen investigates the 2008 and 2009 contracting processes?

The latest mess, which has been percolating for months, could explode this week: D.C. Council Chairman Phil Mendelson told me he only learned about the problem on Friday. He intends to meet with Gandhi "early next week. I am concerned the procurement is handled correctly."

Forget about that.

District law mandates that contracts of more than $250,000 provide subcontracting of 35 percent to certified local small businesses enterprises (CBE). During the 2009 lottery contracting process, Gandhi violated the CBE law, according to the city's inspector general, possibly costing taxpayers a bunch of money.

"He's reckless," said one businessman, who, like others, requested anonymity. "He's acting like he can't be touched."

When it was time to implement the final option year for the current lottery contract with Scientific Games International, it appeared Gandhi intended to do the right thing. After concerns were raised that SGI had not been in compliance with the CBE law since 2005, he sought a waiver from the Department of Small and Local Business Development, according to AP's Ben Nuckols, who first reported the story.

In March 2013, DSLBD Director Harold Pettigrew denied Gandhi's request, identifying a half-dozen companies who could be subcontractors. Soon after, Pettigrew lost his job.

Was he fired like Eric Payne, the CFO's contracting director, who in 2008 and 2009 refused to go along with apparent contract manipulation and steering?

Then, the imperial CFO abetted by his General Counsel David Tseng and lottery Director Buddy Roogow, brazenly violated the spirit of a local law. Without forcing CBE compliance, Gandhi issued a letter contract to SGI worth $950,000. That transaction seemed designed to bypass the requirement that contracts of $1 million or more receive prior council approval.

Gandhi didn't respond to my request for comment.

An aside: Once I was against the council's involvement with contracts. I have become increasingly concerned about how Mayor Vincent C. Gray's administration and Gandhi have circumvented procurement laws, however. Were it not for the council, the public wouldn't know the extent of waste, fraud and abuse in their government.

Gandhi has been undeterred. He seems intent on giving SGI business: When a new contract bid was issued for the Scratch Three game, only two companies responded: Scientific Games and a joint venture formed by Veteran Services Corp. and Pollard Banknote Holdings.

In 2009, Gandhi encouraged lottery contractor Intralot to engage VSC, headed by Emmanuel Bailey, as its CBE partner. Now, in the no-permanent-friends category, Gandhi and his rule-bending crew determined that Bailey's joint venture wasn't a certified business, disqualifying its bid, according to government documents.

SGI was left standing — although its bid didn't include the requisite CBE subcontractors.

Legally, Gandhi should have rebid the contract. He hasn't. Instead, he has tried to qualify SGI, seeking yet another waiver.

There is a new interim DSLBD director. Will this one give Gandhi what he wants?

Let's hope not.

Jonetta Rose Barras' column appears on Tuesday and Friday. She can be reached at jonetta@jonettarosebarras.com.

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