Municipal Government

CSEA Slams Lottery Sweetheart Deal and Questionable NYS Contracting Practices

April 17, 2013
By Neal Tepel

ALBANY NY — CSEA today called for a legislative hearing over the appearance of impropriety at the New York State Lottery. The call came following a published report that a top New York State Lottery official who recently negotiated a multi-million dollar contract with a private vendor is now working for the same vendor. CSEA believes the situation should be reviewed immediately by the Office of Inspector General and J-COPE.

The revelation comes as the Cuomo administration continues to promote privatizing public work. Gordon Medenica, the former director of the NYS Lottery, is now a consultant with GTECH, a firm that has nearly a billion dollars worth of business with the state. Last year, while still director, he negotiated a $25 million deal with GTECH that essentially privatizes the jobs long held by marketing representatives at the Lottery.

“This has the appearance of impropriety on the face of it and the governor knows it,” said CSEA President Danny Donohue. “We will only see more of this if the Cuomo administration continues its path of eroding public jobs while playing fast and loose with private contractors at public expense.”

The $25 million GTECH contract created a pilot program that called for the hiring of private sector workers to do identical jobs at the Lottery Division. The state started the program on Sept. 17. CSEA questions whether the deal is truly in the public interest. Before the deal with GTECH, the Cuomo administration had not filled authorized positions even through they are revenue generating jobs.

Donohue also decried Medenica’s hypocrisy and conflict-of-interest-tainted job offer with GTECH since he warned Lottery staff that they were prohibited from applying for the new GTECH positions “due to state revolving door laws.”

According to state laws, any official must wait two years before conducting business with their prior agency when working in the private sector, and they are permanently barred on contracts or transactions they directly worked on.

“Here’s a classic example of ‘do I say, not as I do,’ that we've come to expect from this administration,” said Donohue. “The public needs some honest answers and accountability.”

GTECH, a private company owned by a foreign global conglomerate already has hundreds of millions of dollars worth of contracts with the state. It’s also a company that donated $40,000 to Cuomo’s
campaign.

Indeed, according to a new analysis by the good government organization Common Cause, the gambling industry has poured some $50 million on lobbying and campaign contributions in the state since 2005. In the first half of last year, the industry had already spent nearly $4 million on lobbying alone.

The original $25 million GTECH contract to hire about 20 workers was amended from two years to five years. Hiring just 20 state employees from the active civil service list would cost less than a million over the same period. The Lottery office in New York City currently has roughly equal numbers of GTECH workers and state workers.

In the past two years the agency was cleared to hire at least 100 additional personnel, though only 17 positions were filled. There are currently at least 200 eligible candidates on civil service lists who have passed both written and verbal exams, just waiting to be hired.
 

April 17, 2013

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