Share This Page

Corbett administration delays deadline for lottery bid

| Monday, Dec. 31, 2012, 1:50 p.m.

HARRISBURG — The Corbett administration on Monday said it would extend the time period to consider a bid from a multinational company to privatize management of the $3.5 billion-a-year Pennsylvania Lottery.

The bid from Camelot Global Services, set to expire at midnight Monday, now would expire Jan. 10, the Department of Revenue said. Camelot, which runs the United Kingdom's National Lottery, submitted a bid saying the state would reap $34 billion in profit over 20 years.

If the company fails to meet projections, the state could draw from a $200 million pool of money Camelot must front — a $50 million “bid security” fund, from which consulting fees would be paid, and $150 million up-front cash collateral, Revenue spokeswoman Elizabeth Brassell said.

A top political adviser to Republican Gov. Tom Corbett, meanwhile, said he mistakenly remains listed as a lobbyist for a consulting company involved in the lottery deal because he did not update his listing with the Department of State.

Brian Nutt, who was Corbett's chief of staff in the Attorney General's Office, said it is his mistake that the department's website lists him as a lobbyist for Greenhill and Co. of New York City. Former Democratic Gov. Ed Rendell works for Greenhill but has said he was not involved in lottery discussions.

Nutt said he registered as a lobbyist as a precaution. He said he provided advice to the consulting firm on a privatization innovation task force Corbett set up in 2011. Corbett had asked Greenhill to help identify opportunities for privatizing state assets.

“I have not done any of the work for them (on the lottery) or lobbying,” Nutt said. “There was nothing specific as relates to the lottery.”

Corbett spokesman Kevin Harley said he had no comment and was not aware of Nutt's work for Greenhill.

The administration hired Greenhill in December to work on the lottery deal. The company and a law firm stand to make millions if the deal goes through, Brassell said. She said fees for consultants are capped at $30 million.

“Greenhill is the financial adviser for the project, and DLA Piper is the legal adviser,” Brassell said. “Those are the only two contracted advisers the commonwealth has, but each of those advisers may have subcontractors that will be paid out of the bid security.”

Camelot is represented by lobbyists from the prominent firm of Greenlee Partners, which has offices in Harrisburg, Philadelphia and Pittsburgh, and State Street Strategies in Harrisburg. It hired David La Torre as a Pennsylvania-based spokesman.

The bid extension provides time for a counterproposal to lottery privatization by AFSCME Council 13, which represents state workers, and time for a final report on the suitability of Camelot as a potential private manager, the Revenue Department said. Three companies initially bid for the contract, but two dropped out. The administration won't identify the other companies.

The union must submit its plan by Jan. 8.

David Fillman, Council 13's executive director, said he's baffled by the choice of Jan. 10 as the new deadline, because it falls before a scheduled Jan. 14 Senate hearing at which the administration promised to answer questions about the proposal.

“It's just kind of a slap in the face to the Senate hearing,” he said.

Fillman said he was unaware of Nutt's prior involvement with Greenhill. “Unfortunately, it doesn't surprise me,” he said.

AFSCME has filed suit to block the lottery privatization. The union will make a counterproposal, Fillman said.

The lottery is the only one of its type in the nation that sends all proceeds to senior citizen programs such as low-cost prescription drugs, free transit and rebates on real estate taxes and rent. Corbett has said the growth of Pennsylvania's elderly population will strain those programs without new revenue.

The lottery plan caused friction between Corbett and even some GOP legislators because Camelot's proposed profits would include new revenue from keno games, which people could play at terminals in restaurants and bars.

Some lawmakers view that as an extension of legalized gambling. Revenue Secretary Dan Meuser has said the department's legal advisers believe the agency has clear authority to begin keno games.

Brad Bumsted is state Capitol reporter for Trib Total Media. Reach him at 717-787-1405 or bbumsted@tribweb.com.

TribLIVE commenting policy

You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.