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State Treasurer McCord wants to review Lottery contract

| Wednesday, Dec. 12, 2012, 4:20 p.m.

HARRISBURG — A private contractor that the Corbett administration is considering to run the state lottery might not get paid if the governor expands the games without legislative approval, state Treasurer Rob McCord said.

Gov. Tom Corbett is negotiating with a firm that runs the United Kingdom's National Lottery. Lawmakers from both parties have complained that Corbett, a Republican, is putting the contract in place while the Legislature is out of session.

McCord, a Democrat and potential challenger to Corbett in 2014, said expansion of gambling through keno and other games without legislative approval could set up the possibility that he won't pay under any agreement the Corbett administration negotiates.

Pennsylvania law and regulations grant the state Department of Revenue broad authority over operating, controlling and administering the lottery, said Elizabeth Brassell, a department spokeswoman.

“Exploring and executing a (management agreement) for the lottery are well within that authority, as are introducing new lottery games like keno (simply Super 7 drawn more frequently than once or twice a day) and strictly luck-based Internet offerings,” Brassell said.

A lone bid by Camelot Global Services PA to run the lottery for 20 years expires Dec. 31. The General Assembly technically has been out of session since Nov. 30.

“My concern is that the Revenue Department might be using the contracting process to permit gaming expansion in a manner that is rightfully the prerogative of the state Legislature,” McCord said. “If that is the case, then my office could encounter legal obstacles in disbursing public funds to the contractor.”

Whether McCord runs for governor or not has no bearing on the treasurer's decision — it's whether the treasurer believes the contract is legal, said spokesman Gary Tuma.

“The state Fiscal Code, as part of a system of financial checks and balances, gives the state treasurer the responsibility to make sure that all disbursements of public funds are ‘lawful and correct,'” McCord said.

“Accordingly,” McCord wrote in his letter to Revenue Secretary Dan Meuser, “please be advised that I will not authorize the expenditure of public funds for lottery expansion unless I am satisfied such an expenditure is legally permitted under existing law.”

Officials are considering keno as a way to increase lottery revenue, Brassell said. She said 14 lotteries offer such monitor-based games.

McCord's entry into the lottery controversy occurred at the request of Senate Democrats.

“Republicans and Democrats alike have been shut out of the process,” said Senate Minority Leader Jay Costa, D-Forest Hills.

The Corbett administration has not answered a request for detailed information on the proposed agreement with Camelot, Costa said. He asked McCord, who makes payments on all contracts, to provide an opinion on the legality of the process, which Costa claims has been “secretive.”

“We will continue to be as transparent as possible in this process,” Brassell said, “and our commitment to transparency has been demonstrated through public testimony at legislative hearings.”

She cited more than 80 meetings with individual legislators and staff; updates through news releases and online resources; and regular updates to lottery employees, union officials and aging stakeholder groups.

Brad Bumsted is the state Capitol reporter for Trib Total Media. He can be reached at 717-787-1405 or bbumsted@tribweb.com.

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