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D.C. Council Chairman Phil Mendelson warned his fellow councilmembers.
If they didn’t pass emergency legislation, sidestepping the competitive bid process for the District’s lucrative new sports gambling contract, they should prepare for the “onslaught of lobbying” that would surely follow.
“There’s enough money involved, profit involved that they are just throwing all kinds of mud at each other, and they say horrible things,” Mendelson said during the Council’s breakfast on Jan. 8.
For the last few months of 2018, lobbyists with insider connections to councilmembers roamed the Wilson Building while the Council debated how to establish a sports gambling program in the District. A May 2018 U.S. Supreme Court decision legalized the practice throughout the country, and by December, the D.C. Council voted to allow sports wagering. (Notably, councilmembers largely rejected lobbyists’ influence in December by giving the D.C. Lottery sole operating authority, rather than dividing it among licensed sportsbetting operators.)
Now, D.C. Lottery Executive Director Beth Bresnahan is advocating for the ability to award the contract to operate the District’s sports betting program to Intralot, the city’s current lottery operator, on a no-bid basis. D.C. Chief Financial Officer Jeff DeWitt has argued that the city will make more money getting to market first than it will save by possibly finding a cheaper operator.
Although Mendelson buys DeWitt’s argument, he ended up pulling the emergency bill and replaced it with one that will go through the normal legislative process. A hearing in the Committee on Finance and Revenue is scheduled for Jan. 28.
Ward 5 Councilmember Kenyan McDuffie, who sits on the Committee on Finance and Revenue, says the contract should be put up for bid.
“I think it should be a competitive procurement,” McDuffie says. “And I’ve listened to and heard from the CFO and others who hold a different view, but I think given the history of the lottery and the controversy surrounding previous procurements, it would be wise for the CFO to bid this out competitively.”
That controversy popped up when the last lottery contract was up for bid in 2008. Then-Council Chairman Vince Gray and then-Ward 1 Councilmember Jim Graham were accused of contract steering. Both denied wrongdoing, but the scandal cost the city big. D.C. paid $3.5 million to settle a whistleblower lawsuit brought byEric Payne, a District contracting officer who refused to give into political pressure.
As for the lobbying effort, Mendelson, in a recent conversation with LL, describes what he thought was a New Year’s greeting from alobbyist, though he declines to say who. The note started out wishing him well, and with each succeeding paragraph, lambasted the chairman for even considering a sole source contract.
“I found out later this person was looking to partner with Scientific Games,” one of the few companies that can operate a lottery, Mendelson says.
Other councilmembers, the CFO, and even LL have received dossiers likely assembled by lottery operators that spew negative information about their competition.
For At-Large Councilmember Elissa Silverman, the whole process is rather comical.
Although some lottery revenue will fund violence prevention programs under the Neighborhood Engagement Achieves Results (NEAR) Act, as well as early-childhood care, she doesn’t see the lottery itself as a public good.
“It’s almost a public harm they’re providing that ends up making money for these connected insiders,” Silverman says. “It’s like, ‘Who’s best at taking money from our residents so we can fund these programs and make a ton of money off of it?’”
Given the amount of lobbyist attention, the amount of money at stake (the CFO projects the sports betting program will bring in about $92 million in the first four years), and the scandal surrounding the previous lottery contract, it’s time to meet the cast of characters and see how they’re connected to elected officials.
Warren Williams
Two councilmembers tell LL that they’ve talked with Williams about sports gambling, though he notes that he was not paid as a lobbyist and was educating the councilmembers as a local business owner. The last time the lottery contract was up for bid, Williams initially partnered with Intralot but was removed, even though his bid was superior, as part of the alleged contract steering scandal.
CONNECTIONS: Basically everyone. “I’m not sure who I don’t consider a friend on the Council,” Williams says via text. “Some I know more than others.”
Has donated to Brandon Todd, David Grosso, Robert White, Kenyan McDuffie, and Mary Cheh, for a grand total of $4,000 dating back to 2015.
Bill Jarvis
Lobbied for DC09. Jarvis says he doesn’t have a role for the contract, but “in my capacity as a lobbyist, when there are government issues related to the lottery, they ask me to get involved.”
Jarvis’ involvement raises ethics concerns due to his business relationship with Councilmember Jack Evans, first reported in the District Dig.
CONNECTIONS: Registered agent and “organizer” for Evans’ consulting firm.
There is a discrepancy between the Office of Campaign Finance and the Board of Ethics and Government Accountability’s records of Jarvis’ political donations for 2018: OCF says he donated to Kenyan McDuffie and Phil Mendelson; BEGA says he also donated to Anita Bonds and to constituent funds for Brandon Todd and Jack Evans.
Jon Mandel
Lobbied for MLB, NBA, PGA Tour, DraftKings, and FanDuel
CONNECTIONS: Former communications director for Kenyan McDuffie; friend of Elissa Silverman.
Has donated to Brandon Todd, David Grosso, Kenyan McDuffie, and Elissa Silverman, for a grand total of $651 dating back to 2015.
Corey Arnez Griffin
Lobbied for DC09, the joint venture that’s running the DC Lottery with Intralot, and tells LL that his contract runs through Feb. 1.
CONNECTIONS: Former chief of staff for Kenyan McDuffie; member of Vince Gray’s 2010 transition team.
Has donated to Brandon Todd, Robert White, Vince Gray, Brianne Nadeau, Charles Allen, Phil Mendelson, Mary Cheh, Kenyan McDuffie, and Anita Bonds, for a grand total of $5,500 dating back to 2015.
Janene Jackson
Lobbied for MGM
CONNECTIONS: Worked for Vince Gray when he was mayor; former committee director for the Committee on the Judiciary and Public Safety under Mendelson.
Has donated to Vince Gray, Robert White, David Grosso, Brianne Nadeau, Kenyan McDuffie, Phil Mendelson, Charles Allen, Anita Bonds, and Mary Cheh, for a grand total of $4,115.74 dating back to 2015.
Claude Bailey
Lobbied for MLB, NBA, and PGA Tour on retainer
CONNECTIONS: Has donated to Brandon Todd, Jack Evans, Robert White, David Grosso, Vince Gray, Brianne Nadeau, Mary Cheh, Kenyan McDuffie, Phil Mendelson, and Anita Bonds, for a grand total of $5,425 dating back to 2015.
John Bouker
Lobbied for FanDuel and DraftKings
CONNECTIONS: Bouker is good buds with David Grosso, who has repeatedly stated his moral opposition to gambling and voted against the legislation this past December.
Has donated to David Grosso, Brianne Nadeau, Mary Cheh, Charles Allen, and Phil Mendelson for a grand total of $2,450 dating back to 2015.
Kevin Stogner
Lobbied for MLB, NBA, and PGA Tour
CONNECTIONS: Stogner used to work on the Committee on Finance and Revenue under Jack Evans and donated $37 to Charles Allen in 2014.
Lloyd Moore
Lobbied for FanDuel and DraftKings
CONNECTIONS: Has donated to Brandon Todd, Jack Evans, Robert White, Trayon White, Vince Gray, Brianne Nadeau, Phil Mendelson, Kenyan McDuffie, and Anita Bonds, for a grand total of $8,000 dating back to 2015.
Correction: A previous version incorrectly stated that Councilmember Charles Allen received donations from Bill Jarvis and Lloyd Moore. The post has also been updated to reflect Warren Williams’ position as a local business man, not a registered lobbyist.