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Council approves Intralot lottery contract

The D.C. Council voted 9 to 1 to approve a $38 million, five-year contract to Greek international lottery giant Intralot to run the District gaming system despite questions about the procurement process.

The vote ends a year and a half of controversy over the lottery that began when Intralot and international rival GTech went head-to-head for a $120 million, 10-year contract.

Intralot won, and the administration of Mayor Adrian M. Fenty (D) submitted the agreement to the council for approval. But council members questioned the ties Intralot had to Fenty. The company was partnered with W2I, a fledgling firm headed by Warren Williams and his wife. Williams was once part of Banneker Ventures, the company headed by Fenty friend and fraternity brother Omar Karim.

GTech's longtime local partner Leonard Manning had ties to several council members. The council sat on Fenty's request, and the procurement process began again.

This time, Intralot bid without a minority partner. GTech created a local partnership with Darryl Wiggins, a Fenty campaign booster; Lorraine Green, who headed Council Chairman Vincent C. Gray's transition team; and Rod Woodson, a longtime player in D.C. government and politics.

But Intralot won again. And the company added a minority partner: Veterans Service Corp., headed by Emmanuel Bailey.

The GTech team cried foul when Lee Smith III, director of the Department of Small and Local Business Development, would not approve the new partnership's joint venture certification. The approval could have given the GTech group enough points to win the contract over Intralot.

The mayor's fraternity ties are once again in the mix. Smith and Bailey are the mayor's fraternity brothers.

Council member Phil Mendelson (D-At Large), the lone dissenter, said he could not vote in favor or the contract when the process appeared to be manipulated. "With the points that were awarded, I can't help but think that the fix was on," he said. "Everybody agrees that it was messy."

Council member Tommy Wells (D-Ward 6) said the process was bungled but not corrupted. He said he could not see any "wrongdoing" or "contract steering."

Council member Marion Barry (D-Ward 8) said the council would have to leave the issue to the courts.

Bailey, along with former Council member Kevin P. Chavous who was lobbying council members behalf of Intralot, apparently convinced council members with promises of local jobs and a headquarters in a less affluent part of the city.

Barry said the headquarters would be in Ward 8. Bailey said in an interview that he has not found space yet and that he could place his office in Ward 5. Bailey also said he could have 51 percent controlling interest in the deal with Intralot if that part of the agreement is approved by Chief Financial Officer Natwar M. Gandhi.

-- Nikita Stewart

By Anne Bartlett  |  December 1, 2009; 2:54 PM ET
Categories:  D.C. Council , Mayor Fenty , Nikita Stewart  
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Why is it that a lot of city contracts go to people who have some sort of relationship with Fenty? Is there any organization during business with or hoping to do business with the District who doesn't have some ties with the mayor or council?

Posted by: Jimof1913 | December 1, 2009 5:19 PM | Report abuse

Ah, good, the lottery. A tax on greed and stupidity. "It's for the schools," right? Schools are so important that we'll tax poor, illiterate people to pay for them. Now that's a great lesson for the kids.

Posted by: SydneyP | December 1, 2009 6:43 PM | Report abuse

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