Monday, August 01, 2011

EDITORIAL >> Put controls on lottery

In the vast realm of government, there is at least some good news in these moribund days. The people who oversee the Arkansas state lottery, or a few of them, are beginning to act like public stewards.

A committee of the Arkansas Lottery Commission rejected lottery director Ernie Passailaigue’s plans to give one of his protégés a $12,457 raise by creating still another new position in the lottery hierarchy and promoting her to the job. The committee also said no to a $2,166 raise for the chief legal counsel, who it is safe to say has not performed at a stellar level.

This is pocket change in a $4 billion government and even in the lavish payroll of the Arkansas lottery, but refusing the raises is a radical development that gives some hope that this rogue government agency might someday become a sensible servant of the people.

One of the phalanx of associates that Passailaigue brought with him from South Carolina is now the lottery’s “product director,” and Passailaigue said she was absolutely irreplaceable. She helps manage the scratch-off lottery tickets, the lottery’s big seller. So to keep another state lottery from hiring her away, he wanted to give her a big raise, to $89,000. To do that, he created a new job, “director of product development.”

The state personnel director said it was a large raise for a job requiring dubious skills and that it was being given when salaries in the rest of state government were frozen. Steve Faris, a former state senator who was recently appointed to the Lottery Commission, did not think either raise could be justified at the moment, so the raises were sidetracked.

Faris and Bruce Engstrom, a Little Rock accountant, have brought a little vigilance and vigor to the Lottery Commission since they were appointed in the spring. They have had the audacity to question Passailaigue’s decisions and recommendations and the lottery’s manifold shortcomings. Also Thursday, it was announced that the lottery’s controller and chief financial officer had quit. Engstrom had been furious that the controller, who was supposed to be a CPA but wasn’t, had been unable to prepare an audit that met basic accounting standards. They had to hire one to get it done. Passailaigue had been defending his hiring of a chief fiscal officer without accounting skills for a job that clearly required them.

It has been like that from the start, when the newly minted Lottery Commission hired Passailaigue, a politician who started the South Carolina lottery, by offering him a giant boost in salary. Passailaigue makes considerably more than the governor, lieutenant governor, attorney general, secretary of state and state treasurer combined. He brought with him several lottery employees from South Carolina, all at salaries far beyond those of major department heads of government. They supervise the out-of-state gambling vendors that bring in about $95 million a year for college scholarships.

You know some of the lottery’s troubles—the lavish, undocumented expense accounts, the audit failures, the extravagant vendor contracts, the shortfall in scholarship revenue. And Thursday, former state Rep. Robbie Wills revealed that he was a lobbyist for Intralot, the big gambling contractor that does a lot of the lottery business in Arkansas.

Wills, as speaker of the House of Representatives in 2009, sponsored the legislation establishing the lottery and giving it unparalleled fiscal latitude. It is free of many of the restraints under which other state agencies must operate. The legislation and the constitutional amendment that authorized it established the peculiar freewheeling culture at the lottery.

As for Wills, can you spell revolving door and legislative ethics?