Don’t you hate to see an audit of the Arkansas lottery coming? Always more waste, slipshod accounting, illegal compensation, bidless contracts or even contractless contracts.
Ernie Passailaigue, the lottery’s first director, and his top aide, David Barden, resigned last month amid rising rancor from Gov. Beebe and many legislators over all the bumbling in the scholarship program. A second top aide (Ernestine Middleton came with Passailaigue and Barden from South Carolina to get the Arkansas lottery going) was fired a few days later by the acting director, Julie Baldridge. Together, the three were knocking down nearly $800,000 a year plus perks. Their departures were good timing. Last week, the legislative audit division released its audit of the lottery’s operations for 2010.
There were the usual—what shall we call them?—accounting shortcomings. The intriguing part was Passailaigue’s and Barden’s official travels—that is, travel paid by the state. On 27 percent of all the days Barden was being paid to be on the job in 2010 he was traveling directly or indirectly to South Carolina, his home. For Barden, it was 21 percent of his workdays. Neither man moved his family to Arkansas; they shared an apartment in Little Rock.
Now, you would expect a good family man to see the wife and kids as often as he could, but not on state time or state expense. Passailaigue and Barden attended a lot of conferences and other events that could be construed as related to their lottery work and South Carolina always got on the itinerary.
So legislators debated whether all the lottery’s problems were due to too little oversight from the lottery’s board and the legislative oversight committee (both did very little), lax laws governing the lottery, Passailaigue’s South Carolina governing style or maybe just overwork by Passailaigue and Barden. The two men said they often worked on the days they were traveling and that they didn’t get credit for all the time they worked after regular work hours.
We think it is more fundamental than that. The constitutional amendment that authorized the lottery made it an entirely independent agency of government, not subject to the usual fiscal restraints on government operations. The enabling legislation and appropriations gave the lottery a wide berth.
The salaries of top executives were made flexible and far higher than those of any agency of government for no reason whatsoever. The lottery handled a fraction of the money that a number of other agencies handled and the level of expertise demanded was far below that of many agencies. Passailaigue made four times the governor’s pay.
If you are offered an unusually lucrative job and told that you have carte blanche, the freedom to run the agency like a private business with few of the annoying restraints of government bureaucracy, you make decisions based upon convenience, especially your convenience.
Passailaigue was told essentially that his knowledge of lotteries was so vital to the state that he should feel free to do what he needed to do to get the lottery running. In the world of private business you are fine as long as profits climb. No one looks at the details until the house collapses. In government, unfortunately, there is a different level of accountability and pesky things like freedom of information and audits.
