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As some councilmembers prepared to hear testimony on the proposed $215 million, sole-source contract to run D.C.’s new sports wagering program and its lottery, Ward 2 Councilmember Jack Evans had to scoot down a seat.
Evans, who for now still chairs the Committee on Finance and Revenue, was leading a separate hearing in the same room immediately before testimony on the lottery. Evans was supposed to chair the lottery hearing as well until the public release last week of a 20-page memo outlining his violation of ethical rules while serving as chairman of the Metro board. Evans is also under federal investigation, and agents raided his Georgetown home on the morning of June 21.
Given the new revelations into Evans’ ethically questionable conduct, Chairman Phil Mendelson bumped Evans as chair of the lottery hearing, and took over himself. Mendelson also said he plans to hire an outside law firm to investigate Evans in light of the Metro report. The Council will vote whether to remove Evans as chair of the finance and revenue committee on July 9.
Critics have questioned Evans’ role in establishing sports gambling in the District, especially given his relationship with N. William Jarvis, who lobbied the Council on behalf of DC09, the local company that runs D.C.’s lottery along with Greece-based Intralot.
Sitting a few chairs down from Evans during the meeting, At-Large Councilmember David Grosso, lamented the “false sense of urgency” that he said Evans, Chief Financial Officer Jeffrey DeWitt, and the D.C. Lottery gave as justification for bypassing the competitive bidding process. Evans’ involvement “calls into question not just this contract, but also the underlying legalization of sports wagering,” Grosso said, adding that Evans should have recused himself.
In response to questions during the hearing, D.C. Lottery Executive Director Beth Bresnahan said neither Evans nor Jarvis played a role in negotiating the lottery contract with Intralot. She also said federal law enforcement has not contacted the lottery.
Bresnahan defended the lottery’s justification for awarding a sole-source contract, which was to enter the market before Maryland or Virginia in order to maximize revenue.
At-Large Councilmember Robert White cast doubts on that justification, saying it’s unclear when, or whether, those neighboring states will set up sports betting programs.
Asked for justification for a sole-source contract, Bresnahan said: “We’ve negotiated a contract we believe is a good value for the District and will return many millions of dollars for the District in a rapid amount of time.”
She explained that her office conducted a market analysis, comparing rates and capabilities of other vendors and the services they provided. Although the specifics of that analysis have been shared with the Council, they will not be publicly available until the Council approves the contract.
Following the meeting, Mendelson said he disagreed with Grosso’s call for Evans’ recusal.
“If we find something that says he directed predictable benefit, then that would be very different,” Mendelson said, adding that “it’s easy to say people should recuse themselves, but we get elected to vote on issues that we care about.”
Metro’s investigation identified multiple instances where Evans “knowingly” violated ethical rules, in part by soliciting and accepting money to serve the interests of his clients and friends—putting their interests above those of WMATA,” according to the memo from the law firm Schulte Roth & Zabel.
Evans initially denied committing ethical violations before acknowledging the WMATA ethics committee dinged him for a single violation.
The Council cannot take action on Evans’ removal as chair of the finance and revenue committee until its July 9 meeting, its final meeting before breaking for summer recess, when they’re also likely to vote on the lottery contract. If the Council doesn’t vote on the contract at that meeting, it will automatically be disapproved, Council staff told LL.
The Council voted 8-4 to excuse the competitive bidding process for the lottery contract in February. However, Ward 5 Councilmember Kenyan McDuffie was absent for the final vote and voted against the bill on first reading. And now, Ward 7 Councilmember Vince Gray, who previously voted “yes,” wrote in a letter to constituents that he will not approve of the lottery contract unless confusion over sports gambling revenue is resolved.
The Council’s investigation into Evans is expected to last throughout the summer, and this week, Evans pleaded for a chance to defend himself. He will do so July 2. “I believe that if my colleagues hear my side of the story, and I respond to all your questions, you will not take any action at this time,” Evans said.