U.S. Investigation of Lottery Bidding Urged

Dist. Atty. Arlo Smith said Saturday that he has asked U.S. Atty. Gen. Janet Reno to conduct a grand jury investigation into what he called the growing scandal involving bidding for state lottery contracts.

Smith sent a letter to Reno on Nov. 15, saying that a federal inquiry was needed to investigate allegations of bid-rigging, antitrust violations and questionable ethics involving the awarding of contracts to GTECH Corp.

“A large body of evidence has recently appeared in the press which calls the integrity of state lottery procurement practices into question,” he wrote.

He cited one Los Angeles Times story that reported that GTECH had received $500 million in lottery contracts in the last three years, all allegedly without competitive bids.

Smith said California officials, including Atty. Gen. Dan Lungren, have approached the case haphazardly. Lungren, a Republican who defeated the Democrat Smith in 1990 for the office of attorney general, could not be reached for comment Saturday.

In his letter, Smith also chided a commission formed by Gov. Pete Wilson to investigate the lottery’s bidding process. The commission “was motivated more by politics than a legitimate desire to correct potentially illegal and unethical activity,” he said.

Smith’s letter came less than a week after Sharon Sharp resigned as the state’s lottery director.

Sharp, a former Illinois lottery director who had been running California’s games for two years, was accused of favoring GTECH after the company was awarded a $400-million contract last year with no other bidders involved.

She resigned Nov. 9, saying she had grown tired of the allegations, which she said were untrue. Officials with GTECH, based in Rhode Island, were unavailable for comment Saturday, but have said the allegations are without merit.