Thursday, March 26, 2009

Scientific Games Gets Back Scratched By State Treasurer

And friend... just call him KICKBACK KELLY!

The Lying Looter at the State Lottery

Cahill associate is under scrutiny

The One-Armed Bandit of Massachusetts

I get sick of the rank rot of corruption in this state. It's a cesspool over there at the statehouse. Time for 'em all to take a dunk.

"Cahill facing ethics inquiry; $21m lottery pact, friend's tie at issue" by Frank Phillips, Globe Staff | March 24, 2009

State Treasurer Timothy P. Cahill is facing a state ethics inquiry for awarding a $21 million state lottery contract to a company that was secretly paying Cahill's close friend and fund-raiser, Thomas F. Kelly, tens of thousands of dollars in consulting fees, according to multiple people who have been briefed on the investigation.

You can't even trust the treasurer?

Investigators from the state Ethics Commission interviewed Cahill this month about his decision in 2004 to award the contract to Scientific Games to make scratch tickets, despite a recommendation from his own staff that Scientific Games receive less state work, said two of the people who have been briefed. Both spoke on the condition of anonymity because Ethics Commission investigations are confidential.

Also see: State Lottery a Loser For Mass. Residents

State Scratches Lottery Ticket... and Loses

Lies About the Lottery

The investigators also have collected e-mails, campaign finance reports, and other documents, the people said. The investigation follows a Globe story in August that detailed Kelly's work on behalf of Scientific Games and Kelly's relationship to Cahill. Cahill's office did not respond to a request for comment. The treasurer, addressing the issue in the past through a spokeswoman, has said that he was unaware of Kelly's financial relationship with Scientific Games.

Kelly also declined to comment. The Ethics Commission, which makes it a practice not to confirm or comment on investigations, also would not comment. The commission's inquiry comes at a politically sensitive time for the Democratic treasurer, who is considering running for governor next year, either as a Democratic primary challenger to Deval Patrick or as an unaffiliated candidate in the general election....

The ethics inquiry comes in the middle of a new bidding process in which Scientific Games is seeking another multiyear contract to develop instant games and print tickets. The state's instant ticket lottery is considered one of the highest performing in the world when measured on a per-capita basis, with $3.3 billion in annual sales.

And yet, this state is about $3 billion in the hole!

Remember these?

The State Budget Swindle

Governor Guts State Services

Pigs at the State Trough

A Slow Saturday Special: Statehouse Slush Fund

Hollywood S***s on Massachusetts


Scientific Games has also been prominently mentioned by state Treasury officials as a possible bidder on licenses to operate slot parlors under a plan that Cahill proposed this month.

See: A Big Fat Front-Page Lie

The One-Armed Bandit of Massachusetts

A Rhode Island gaming firm, Bingo Innovative Systems, filed a $20 million lawsuit against Cahill and the lottery's executive director, Mark Cavanagh, in December, charging that Scientific Games has been granted a "most favored contractor status" based on the firm's fund-raising for Cahill's political committee. It described it as a "pay-to-play" scheme.

And here Blagojevich got ridden out on a rail.

Also see: Bill Richardson Blows Off Corruption Probe

Related: Rhode Island First State to Bail Out Casinos

The lawsuit cited the Globe's report in August of Kelly's role helping Scientific Games. It also cited the fund-raiser in New York. Cahill aides have said the charges in the lawsuit are "outrageous" and counter that the allegations are tainted because they are coming from a company that is in a contract dispute with the commission.

At the time the contract was up for rebidding in 2004, Kelly was collecting $3,000 monthly payments from Scientific Games. The money was not paid directly by the company, but through Scientific Games' public relations adviser, Regan Communications, which then billed Scientific Games for Kelly's payments, according to invoice documents the Globe obtained.

Overall, Kelly collected about $200,000 from the company between late 2003 and late last year, when Scientific Games fired him after it learned - through a Globe story - that he also had contracted to consult with Bingo Innovative Systems. He and the company said he did not lobby, but after the Globe's August story and under pressure from Secretary of State William F. Galvin, Kelly registered as a lobbyist for Scientific Games in 2007 and 2008.

Kelly, while on Scientific Games's payroll, signed a contract with Bingo Innovative in 2005 and again in 2006 in which he stood to make as much as $2.4 million. The fees would be generated from a deal the firm and he were trying to broker with the Massachusetts Lottery Commission for a televised bingo game.

According to Globe interviews and documents supplied by Bingo Innovative, Kelly, beginning in late 2003, arranged and attended several meetings for its executives to meet the treasurer, both in his office and at fund-raising events that he threw for Cahill.

Galvin's office is investigating Kelly's Bingo Innovative arrangement. Contracts based on success fees in lobbying are illegal under state law. Kelly said that he acted only as a "marketing agent" for the firm and his contacts with the treasurer and that the commission's staff did not constitute lobbying. Galvin said last week that his investigation is hampered because of a lack of documentation and the amount of time that has passed since the activities took place.

Translation: this investigation is going nowhere.


Also see:
Mass. Courts Throw Dirt on DiMasi Corruption Case