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Capitol reporter Katie Meyer covers Pennsylvania politics and issues at the Pennsylvania state capitol.
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Lottery deal fees under review by auditor general

Written by Mary Wilson, Former Capitol Bureau Chief | Oct 29, 2013 12:34 PM

Photo by Wikimedia Commons

The state's top fiscal watchdog says his office will scrutinize state payments made to consultants working on a plan to lease the Pennsylvania Lottery to a private firm.

"The money that was paid to these firms, what did it actually go to?" said Democratic state Auditor General Eugene DePasquale Tuesday about the planned review. He said more than $3.4 million has been paid to firms associated with the effort to lease the lottery. The money has come from the state's Lottery Fund, which supports programs benefiting seniors.

"This could be going to Meals on Wheels, this could be going to property tax/rent rebate, this could be going to Area Agencies on Aging to help provide care to our seniors," DePasquale said. "And, instead, it's going to a lottery privatization scheme that clearly is not going to happen."

Earlier this year, Democratic state Attorney General Kathleen Kane threw out a contract to privatize the state Lottery. But the Corbett administration has kept the bid by British firm Camelot Global Services alive. The bid was to expire Tuesday. Shortly before 5:00 p.m., the Corbett administration announced the bid would be extended through 2013.

"It is our responsibility to ensure that the Lottery is positioned to grow in order to meet growing needs," said Gov. Corbett in a written statement. "Today that need is outpacing our ability to pay for it. With the Legislature’s support, we can work together to set a path and plan for the future of services for older Pennsylvanians." The press release also quoted Republican Senate Majority Leader Dominic Pileggi, who has been critical in the past of the administration's efforts to use the privatization plan to allow online gambling and video terminals in restaurants and bars.

DePasquale has put no deadline on his review of the money paid to firms consulting the Corbett administration on the possible deal. Even if he found something fishy, the auditor general can't do much more than issue recommendations.

"The biggest thing is we have the big stick of the soapbox and the bullhorn of the public discourse," DePasquale said. "But if something is that wrong, we would then have the ability to forward it to the attorney general, if we think it's something potentially criminal."

Word of the auditor general's review comes on the heels of state Treasurer Rob McCord's criticism of the Corbett administration for continuing to pursue lottery privatization. McCord, a Democrat, is also running for governor.

This post has been updated to reflect the close-of-business-day announcement by the Corbett administration to extend Camelot's bid.

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