July 10, 2005
Will the bad Lottery news ever end?

It's a little hard to believe after all the Reagan Greer fiascos we've heard about lately, but there are still more revelations about Lottery-related shenanigans coming to light.

Texas Lottery executives were warned in a draft audit last winter that their decision to gut the agency's security force and fire most of its officers threatened the lottery's security and integrity, but lottery officials never disclosed those findings publicly.

A copy of the December draft obtained by the Houston Chronicle said that a reorganization ordered by lottery executives actually heightened the lottery's vulnerability to ticket theft, ticket counterfeiting and undetected fraud.

But those findings were not included in the 2004 Biennial Security Review provided to lawmakers and the three commissioners who oversee the lottery. Instead, the report said auditors found no issues that would "materially" impact the lottery's security and integrity.

And when the lottery commission chairman expressed concerns in December about the reorganization's effect on security, he was reassured the process would be smooth and beneficial.

They make a bad decision, then they cover it up when called on it in an audit. What else is there for these guys to screw up?

There are two names mentioned in this story that need some attention paid to them.

The lottery has been subject to intense public scrutiny and ridicule since last month when then-Executive Director Reagan Greer admitted approving several inflated Texas Lotto jackpot estimates.

Greer resigned late Friday and was temporarily replaced by deputy director Gary Grief, who has worked for the agency since its inception in 1993.

Lottery commissioners plan to meet Monday to discuss the inflated jackpots and other issues.

Grief, who championed the November reorganization as a way to streamline, cut costs and improve coordination at the agency, refused to comment for this story. So did general counsel Kim Kiplin, who helped oversee the audit.


The reorganization dissolved the division and closed the field offices. Those who were left began reporting to Kiplin's legal division.

Investigators were ordered to stop investigating stolen ticket cases, which had been an invaluable service to local police departments who lack lottery technology and expertise, according to internal documents.

"Why would you want to get rid of your security division?" [State Rep. Kino] Flores said. "I would think that because of the nature of the business you're in, that security would be the division of your agency that would be the strongest."

Flores said executives never gave him a good answer to that question when he asked them about it late last year.

Lottery Commissioner C. Thomas Clowe expressed similar concerns to Kiplin and the others in a December meeting, according to an official transcript.

Clowe, one of three commissioners appointed by Gov. Rick Perry to oversee the lottery, asked if the agency still had enough officers to maintain the security standard set by the division.

"I believe we do," Kiplin responded. She assured the commissioner that executives shared the concern and if they'd missed the mark in the reorganization, they'd address it immediately.

"Well, OK," the commissioner replied. "I hope you haven't missed the mark, and I don't want to go around fixing problems as a result of this."

Grief and Kiplin were specifically cited by Lottery watchdog Dawn Nettles as being "just as responsible" as outgoing executive director Greer for the Lottery's recent woes. Greer was their boss, and he was responsible for the actions of his employees, but isn't it time someone called those two on the carpet and asked them some of the same question that Greer got asked? I mean, after all the crap we've read about the Lottery Commission and its operations, shouldn't we maybe be thinking about a total clean house? How many more stories like this do we need?

Posted by Charles Kuffner on July 10, 2005 to Jackpot! | TrackBack

They make a bad decision, then they cover it up when called on it in an audit. What else is there for these guys to screw up?

Gee, Kuff, maybe they took lessons from the White House!

Posted by: Mathwiz on July 16, 2005 3:08 PM