IGT and more lottery intimidation

igt-logoI noted previously that IGT (formerly known as GTECH) has engaged in an intimidation campaign against Maryland Lottery officials in recent weeks since they lost out on a contract to another company.

Two letters of protest were filed, including one specifically targeting lottery director Gordon Medenica, who previously worked for IGT. The targeting of the director flies in the face of 2009 statements about the company changing its way.

As recently as a month ago (on September 29), the Securities and Exchange Commission – for the first time in its history – issued a standalone fine on whistleblower retaliation and announced that IGT “agreed to pay a half-million dollar penalty for firing an employee with several years of positive performance reviews because he reported to senior management and the SEC that the company’s financial statements might be distorted.”

Additionally, I have confirmed that lobbyists from Alexander & Cleaver P.A., including Hannah Powers Garagiola, representing IGT in the state have been lobbying members of the General Assembly and the media over the past few weeks.

As I noted previously, the U.S. Attorney for Maryland conducted a year-long investigation of the company – then known as GTECH – in the 90s after they hired associates of the governor to take the lottery contract from the incumbent provider in a questionably conducted procurement. A lobbyist for the company was convicted of unrelated mail fraud charges because of that investigation.

I also discussed intimidation and influence-purchasing by IGT in Texas, Arizona, and Rhode Island. Since then, I’ve read more on the company’s history in Maryland.

In 2009, GTECH applied for a contract running the computer system for the state’s nascent slot machine system. Slots were just approved the year before in a statewide referendum.

The state of Maryland’s 2009 background investigation of the company revealed legal problems in other states and countries as well.

The company admitted there were investigations into “possible contract and regulatory issues” and, according to The Baltimore Sun, the “company or its employees have faced allegations of bribery and taking kickbacks” going back to the 90s.

News reports from 2009 in Maryland discuss the fact that the national sales director of the company went to prison after a conviction in New Jersey on charges related to a kickback scheme. Also, mentioned in the 2009 story: a lawsuit in Brazil by the government against GTECH over contract money received by the company that was allegedly illegal because of bribery of government officials.

In the 2009 investigation and application for contracts, it was noted that the company “steadfastly maintains that it has embarked on a course of conduct that is entirely different than its past one, and that it is now in strict compliance with all regulatory requirements.”

More on IGT

In 2006, the Texas Department of Safety investigated of GTECH for a Texas Lottery Commission meeting. GTECH officials claimed back in 2006 that the company had changed its way of doing business as well.

The Texas report discussed the activities and lawsuit in Brazil at great length. A similar issue took place in Trinidad that was also looked into by the Texas DPS and an independent auditor. Other countries where concerns were raised included both Poland and the Czech Republic.

In these countries, the report noted that entities or people hired as consultants in each country appeared to be making a large amount of money while doing “relatively little work.”

As in Maryland this year. a lottery Director in Arizona awaiting confirmation was attacked in the media after IGT was not awarded a contract. That director resigned for having used a state car to drop off his children at school, after “an anonymous complaint letter — supposedly by a current Lottery employee …. was sent to the governor, attorney general, various state senators, and the Arizona Republic.”

If you look at the recent attempt to make trouble for Maryland Lottery director Medenica, whether it was the protest letter targeting him or the veiled threats about him still facing confirmation, then it doesn’t appear IGT has really changed its ways.

Jeff Quinton

Jeff Quinton

Jeff Quinton is an award-winning blogger who has been aggregating and blogging since 1998. He has worked as a reporter, in government, and as a communications professional in Columbia, SC and Washington, DC.

Quinton is a native South Carolinian who has lived in Baltimore since 2006. He is a recent convert to the Catholic Church and is active in the Knights of Columbus. He has been involved in the pro-life movement nationally and locally since 2010.

Quinton is a veteran who served as an intelligence analyst in the Army National Guard. He is also an Eagle Scout.
Jeff Quinton

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