Metro-East News

Emails suggest state Lottery scrambled to stay in multistate games before budget impasse

In this file photo, a clerk hands over a Powerball ticket for cash.
In this file photo, a clerk hands over a Powerball ticket for cash. AP

Two days before the state budget impasse began, the Virginia Lottery was worried Illinois wasn’t going to make some important, upcoming payments to participate in Powerball and Mega Millions games.

“There are several ‘fixed prize’ transfers pending for the next couple of weeks, as well as the Powerball jackpot transfer scheduled for Thursday this week,” Virginia Lottery finance director Deborah Courtney wrote in an email to Chris Froelich, the chief financial officer of the Illinois Lottery, on June 29, 2015.

“I understand your state budget is up in the air ... feel free to call me on my cell today or this evening, and/or in the office tomorrow and we can talk through some contingency plans,” Courtney wrote in the email, which carried the subject line “Budget impasse.”

The message is among emails obtained by the News-Democrat through a Freedom of Information Act records request.

Froelich forwarded the email to B.R. Lane, the Illinois Lottery director.

“Received this out of the blue,” Froelich wrote to Lane. “How, if at all, would you like me to respond?”

Illinois was already on top of the issue, as a call log shows. Earlier that day, a handful of people discussed how the Illinois Lottery would handle the transfers, but the department isn’t saying who participated, as records requests to the Illinois Lottery to learn more about how it violated the state finance law in 2015 have turned up almost dry.

The Illinois Lottery “inappropriately” submitted two $10 million prepayments to the Virginia Lottery in order to participate in future multistate lottery games, the state auditor found in May. The prepayments — made just prior to the start of the state budget stalemate — were designed to get around the impasse, according to the audit.

The News-Democrat sent four requests for a variety of documents, including communication and legal memoranda, in order to determine who was in charge of the decision — or offered advice — to make the two prepayments. Without the money advances, the Illinois Lottery might not have been able to participate in future multistate games. Powerball and Mega Millions have so far generated $290 million in sales for Illinois for the current fiscal year, which ends next week.

Records were also requested to discover who in the Illinois Lottery accepted the audit’s initial findings. Although the Lottery initially agreed with the audit results, the department has since changed its position and now is disputing the findings.

Written communications about the issue between the department, the auditor general’s office and the Virginia Lottery were apparently scant, according to records provided by the Lottery.

Many documents are protected from disclosure, including communication that expresses opinion before a final decision is made. This protection allows people to speak freely, which leads to better decisions. However, even communication after the prepayments were made were apparently slim.

Although the substance of most emails were redacted, who sent and received the emails were not. They show a conversation among Lottery staff about the prepayments that included:

▪  Christian Froelich, the chief financial officer

▪  Jayme Odom, the Lottery chief of staff

▪  B.R. Lane, the Lottery director

▪  Nellie Viner, the Lottery’s legal counsel

▪  Steve Rossi, the Lottery spokesman

▪  Brett Finley, the Lottery’s finance manager

▪  Mehpara Suleman, senior counsel and the records custodian

▪  Druanne Allen, a public service administrator

The second request to see who discussed the prepayment decision after it was made turned up nothing, implying that it was never discussed in email.

The third request, for emails between the auditing firm and the Illinois Lottery, turned up a few, but they were redacted.

The fourth request was for emails between the Illinois and Virginia lotteries, which produced the email that Froelich forwarded to Lane. The Lottery’s response to the records request did not show that Lane responded, however, implying that the conversation was taken offline.

Deborah Courtney of the Virginia Lottery did not respond to a request for comment.

“It’s not appropriate for us in Virginia to speak to it,” spokesman John Hagerty wrote in an email.

Casey Bischel: 618-239-2655, @CaseyBischel

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