Share This Page

Kathleen Kane's conundrum

| Saturday, Jan. 26, 2013, 9:01 p.m.

HARRISBURG

Reviews of pending state contracts by the attorney general are usually pro forma. But one of new Attorney General Kathleen Kane's first major decisions is reviewing the mega-contract to farm out the management of the state lottery to a British company with $34 billion at stake.

Normally the reviews are for “form and legality.” In the vast universe of state contracts awarded, major legal issues are few and far between.

Kane, a Democrat, gets to decide whether a carefully developed contract by the GOP Corbett administration awarding the lottery privatization contract will stand. Regardless of what she decides — fairly or not — it will look political.

Corbett downplayed it when asked about Kane's review, suggesting the review is routine.

In this case, there are outstanding legal issues, according to Senate Republicans, Senate and House Democrats, state Treasurer Rob McCord and the union representing state lottery workers.

Democrats in the Legislature contend the contract is illegal because it's an end-around of the Legislature to allow keno games in taverns and clubs.

McCord has said he might not pay the contractor, Camelot Global Services PA, if he determines keno needs legislative approval.

In a recent letter to Corbett, Senate Republicans didn't question the governor's ability to approve keno in the contract but took it a step further, saying spinoff games simulating casino action would affect the state's casino industry. They asked that the contract be rewritten.

The arguments from any of the above parties would provide Kane with a plausible reason to reject the contract.

If she rejects it, it will seem like one of her first major decisions was to tank a GOP governor's initial step into privatization. That won't hurt her in the Legislature, where it is generally unpopular.

Corbett argues he is pursuing the privatization to boost lottery revenues for senior programs, which will be stretched thin as more baby boomers move into senior status. He'll be able to maintain, at least, that Kane is standing in the way of that protection for the elderly.

Yet the lottery without Camelot provided $1 billion to senior programs last year.

If a delay persists, Camelot could walk.

There are some who think approving the contract would show Kane to be nonpartisan — important when you know she will be taking a major whack at Corbett later this year after concluding an investigation of how Corbett, as former attorney general, handled the 33-month Jerry Sandusky investigation.

An approval would make a lot of Democrats in the Legislature unhappy right off the bat.

One factor that might come into play: Greenhill & Co., the investment banking firm that brought Camelot into the project, might not have its multimillion-dollar pay day if the contract is rejected.

Former Democrat Gov. Ed Rendell, still a potent fundraiser and player in Philadelphia, works for Greenhill. He and the company say he is removed from this project. Still, he would undoubtedly like to see Greenhill continue to prosper.

There are pros and cons both ways for Kane.

Brad Bumsted is the state Capitol reporter for Trib Total Media (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.