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Monday, September 19, 2011

Arkansas Lottery Ernie Passailaigue resigns as Arkansas lottery director

Posted by Max Brantley on Mon, Sep 19, 2011 at 10:57 AM

ERNIE PASSAILAIGUE
  • ERNIE PASSAILAIGUE
The Passailaigue era is over. The Arkansas Lottery Commission today received the resignation of the founding director of the Arkansas Lottery, Ernie Passailaigue.

Julie Baldridge, who has been chief spokesman for the lottery, will serve as interim director. She said she had no interest in being permanent director. She'll receive no pay increase for the new duties, said Commission Chairman Dianne Lamberth.

Passailague wasn't present when the resignation was announced (my earlier post about Ernie being present with reporters during an executive session was based on what I've since learned was a joking Twitter feed). He turned in his letter of resignation Friday and the commission formally accepted it this morning. Commissioner Steve Faris said it wasn't a surprise. At least one commissioner, Smokey Campbell, said he was surprised. All praised him for getting the lottery off the ground quickly. There were no recriminations and no mention of any buyout (he didn't have a contract) or what would become of other employees he had hired. When asked about the financial details of Passailaigue's departure, Lottery Staff Attorney Bishop Woosley wrote in an email, "He will continue to earn his current salary through his last day at the lottery. Any other leave or other benefits that he may be owed (leave, retirement that is not vested) will be paid out in accordance with standard state policies." His letter was pro forma, thanking commissioners and others for "courtesies" extended over his 2 and a half years in the job.

The resignation was announced after a lengthy executive session, more than 90 minutes. Afterward, it was announced Passailaigue's resignation will be effective Oct. 7. Gerard Matthews will be back with more soon.

One question I'd have for the commissioners is what they discussed in the private session that legally allowed it to be in secret. He wasn't fired or disciplined; promoted or demoted. Perhaps they'll say they talked about the hiring of a new director, though such meetings can't be about process, but only about specific people.

Ernie P. had been credited with a speedy startup of a lottery that met revenue targets for the college scholarship program, but he'd been bedeviled by a variety of operational issues, beginning with his high pay ($324,000) and that paid some others he brought with him from South Carolina, where he'd also been lottery director. David Barden and Ernestine Middleton, vice presidents of the lottery, had worked with him in South Carolina.

Ernie P.'s problems escalated with recent changes on the Lottery Commission. Former legislator Steve Faris and North Little Rock accountant Bruce Engstrom added their voices to some previous commission critics with sharp questions about issues ranging from protection of software to lack of marketing to income streams from various forms of gambling games. A growing issue was the highly favorable deal Passailaigue struck with a major lottery vendor — a percentage take of revenue rather than a fixed price, which produced payments to the vendor much higher than the same vendor gets for a bigger lottery in South Carolina. Over seven years, the advantage will be worth more than $100 million to the vendor, enough to pay for 20,000 $5,000-a-year lottery scholarsnhips. Passailaigue argued that the deal was necessary to insure a speedy startup, though the vendor wasn't being asked to do anything different than what it has done in any number of other states, just do it faster in the first few months.

The lottery began selling tickets in late September 2009. The first college college scholarships went to about 27,000 30,000 students at two- and four-year colleges in the fall of 2010 and a similar number got money this year..

I'd heard word of Passailaigue's impending departure last week and was told it would be done in a way not to create further bad press for the agency. That is, I was led to expect there'd be no buyout or other form payment for the departure. He'd made up for earlier excessive comp time, but Chairman Lamberth said he'd receive no severance or additional pay beyond Oct. 7.

The same people who told me of this coming development suggested I inquire about the possibility that Bill Stovall, former House speaker and top staffer in the House, might be a candidate for the job going forward. I asked him. He said no one had talked to him about it. He did say he'd heard the same rumor. Those who were in the legislature when the lottery was created — Faris and Robbie Wills (now a lottery lobbyist), for example — are not eligible until they've been out of office for two years.

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Perhaps the new director will have a name we can pronounce to make it easier for all the bushwackers to assail.

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Posted by Cato on 09/19/2011 at 11:03 AM

What about his two top lieutenants? Are they staying or going?

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Posted by arkansastraveler on 09/19/2011 at 11:03 AM

I'll...we'll...miss Big Ernie. The job he did birthing the Arkansas lottery from scratch in such a short time was remarkable. As to his compensation, there aren't a handful of people in the country who could have done what he did. He was worth it.

Add to that the fact that he gave everyone his cell phone number. I called him a couple of times and both times he was completely gracious in answering my questions.

So who's next? Shane Broadway?

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Posted by HolyGuano on 09/19/2011 at 11:09 AM

Is there anything in Ernie P's contract that says he can't take a job with the vendor who got the sweethart deal?

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Posted by Pavel Korchagin on 09/19/2011 at 11:10 AM

Will he stil have to pay all of that comp time back?

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Posted by arkansastraveler on 09/19/2011 at 11:32 AM

You're a little light on scholarship totals for 2010: more than 30,000 scholarships awarded in 2010; another 30,000-plus this year, I believe.

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Posted by ND '75 on 09/19/2011 at 11:33 AM

You have to wonder how all of that $$ got past the Arkansas Lottery Commission Legislative Oversight Committee. Wasn't that their job??

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Posted by viper11 on 09/19/2011 at 11:41 AM

Can they please hire someone who is not a former legislator or a government favor. This needs to be taken seriously and not to get buddies a job.

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Posted by Geezyoy on 09/19/2011 at 11:53 AM

I may underestimate his skill set considerably, but I think his greatest asset was his contact book.

We should have made the position of Lottery Director about a $150,000/ year job and pair Ernie a $2,000,000 bonus if he got it up and running in time.

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Posted by olddoc on 09/19/2011 at 12:29 PM

I'm just sure ol Ernie the P. will retire right here in Arkinsaw and keep his $1 million or so bucks of Arkinsaw money right here in the state working hard to provide jobs for Arkinsawyers. He loves him some Arkinsaw and he's a 'job creator'!

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Posted by Sound Policy on 09/19/2011 at 12:37 PM

We have a lottery???

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Posted by BeeDub on 09/19/2011 at 12:58 PM

Any number of loyal former legislators, soon to be former legislators and double dippers must be falling all over themselves to get in line for Ernie's job and all of the perk$ that go with it.

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Posted by MysteryShopper on 09/19/2011 at 1:25 PM

For everything and everyone there is a season. And so it is with Ernie. Ernie, you threw an interception, fumbled a couple of times, and got sacked now and then, but you've been a great quarterback for the past two years and you won far more games for us than you lost. I'm so glad you played on our side of the line, and you have my best wishes for a good life wherever you choose to live it. I can hardly wait to see whom the coaches will send in to replace you.

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Posted by Durango on 09/19/2011 at 2:08 PM

I agree with Durango. I wish Ernie P. the best and God speed.

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Posted by Farkleberry on 09/19/2011 at 2:33 PM

Ernie has been feeling the screen door hitting him in the ass since the first day he got here. I doubt he'll keep many warm memories of Arkansas in his heart as he rolls out of town, but I guess I'd take a beating everyday for the kind of money he was pulling down. Time will tell if he earned every penny or not and if the Lottery Scholarship fund starts shrinking we'll be sorry we were so mean to ole Ernie.

My only concern is that the Arkansas legislature doesn't figure out a way to get their paws on the Lottery money. There are few things more important to my family right now than the Arkansas Lottery Scholarship. I got 5000 good reasons to snarl like a momma cat if someone messes with that fund. Pick Ernie's replacement carefully!

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Posted by DeathbyInches on 09/19/2011 at 3:00 PM

I hear you DBI, but the if the fund only creates more freshmen and not more graduates, then I hope people will be open in the future to using the money for other purposes. I know it's a slippery slope...just saying.

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Posted by scrapper72 on 09/19/2011 at 3:57 PM

Surely Shane is up to the job.

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Posted by eLwood on 09/19/2011 at 4:27 PM

Scrapper72: You'd have to change the constitution to change where the lottery profits go.

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Posted by ND '75 on 09/19/2011 at 4:30 PM

I know ND '75. Just offering it as an idea should the original intent, which is producing more college graduates, only results in more people enjoying the college experience for a year before returning to daddy's insurance business.

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Posted by scrapper72 on 09/19/2011 at 6:14 PM

Arkansas was lucky to have Ernie as its Lottery director! So glad he is coming back to South Carolina, where is he loved and appreciated!

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Posted by Angel Passailaigue Postell on 09/19/2011 at 6:22 PM

Angel, did you see the recent South Carolina poll results re Ernie the P.? The results were:

81.77% said they'd never heard of Ernie the P.
14.43% thought Ernie was the triple axe murderer that was recently executed
12.80% asked how much the pollster would pay them to answer the question
10.41% thought Ernie the P. was the chimp at the South Carolina State Zoo

Oh, and the reason the numbers add up to to way more than 100% is that a Rethuglicant pollster did the polling and they can't do math.

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Posted by Sound Policy on 09/19/2011 at 7:02 PM

Somewhere in South Carolina, there's a used car lot calling Ernie's name.

Thanks, Ernie, for all you've done to help ensure that poor people pay for rich kids' college educations. I'm sure that rich Arkansans would join me in expressing great appreciation for all your hard work.

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Posted by reimaginethis on 09/19/2011 at 8:38 PM

Sound Policy how juvenile. Are you a grown man or a 13 year old boy?

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Posted by Mecca on 09/19/2011 at 9:42 PM

reim, my granddaughter isn't a rich man's kid. Glad you are concerned about all the poor people in Arkansas.

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Posted by Cato on 09/19/2011 at 9:53 PM

Max, beware. Steve Faris sitting on the commission. His symbiotic pal Death Star Bob Johnson no longer at the public trough. Makes me nervous.

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Posted by PVNasby on 09/20/2011 at 9:28 AM

Ah, Cato, using an anecdote as a rebuttal. Fascinatingly weak.

Fact: Poor people play lotteries disproportionate to other economic classes.
Fact: Poor people do not benefit from lottery proceeds proportionate to their contributions to the lottery.
Logical conclusion: Poor people are subsidizing the college educations of people from other economic classes.

You can tell me stories about your daughter, granddaughter, niece, nephew, cat, dog, neighbor's rooster, whatever. None of your anecdotes change the fact that lotteries reinforce class inequalities.

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Posted by reimaginethis on 09/20/2011 at 11:32 AM
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