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Friday, June 29, 2012

Attorney general declines opinion on lottery contract

Posted By on Fri, Jun 29, 2012 at 2:38 PM

GONE BUT NOT FORGOTTEN: Ernie Passailaigue
  • GONE BUT NOT FORGOTTEN: Ernie Passailaigue
State Rep. Kim Hammer raised some interesting questions for Attorney General Dustin McDaniel in the form of an official opinion request.

In short, was it legal for former Lottery Director Ernie Passailiague's to unilaterally rewrite a contract with a lottery vendor, Scientific Gaming? Was it legal for the Lottery Commission to renegotiate that contract?

Is a civil lawsuit possible to recoup any of the money lost in lottery profits from the higher payments made to the vendor?

McDaniel said a review of state contracts is outside the power of his office's review function. Here's the full opinion.

Yes, but doesn't the attorney general sue private parties all the time for taking advantage of the state, such as drug companies?

What's the diff?

Others, I know, are looking into the question of whether legal action is worth pursuing here. Could Ernie P. write his own contracts? Does a cleanup of the contract months later really validate any illegal payments made in the interim? They sould like good questions to me.

Opinion Number: 2012-059 Date Sent: 06/29/2012
Requestor: Hammer, Kim
State Representative

Opinion: Did former Lottery Commissioner Ernie Passailaigue exceed his authority in negotiating and
renegotiating any terms of the original contract with Scientific Gaming Corporation? Q2) If it is deemed that former Director Passailaigue did exceed his authority, what civil action may be taken by the state to recoup any lost funds? Q3) Did the Arkansas Lottery Commission exceed its authority in renegotiating a contract with Scientific Gaming Corporation? Q4) If it is determined that former Director Passailaigue and/or the Lottery Commission exceeded their
authority in the contract negotiation process, does this void the existing contract without penalty to the state? Q5) Did Scientific Gaming Corporation violate any laws or contract agreements by signing the revised contract? Q6) Has Scientific Gaming Corporation, in the modifications of the original contract, created an option for the state to void the current contract in its entirety without cost to the state? Q7) Did changes in the original contract give an unfair advantage to Scientific Gaming Corporation in future renegotiations, including three (3) one-year options? Q8) Were "Tel-Sell" Operations part of the original contract? Q9) Do changes noted on page six (6) of twenty (20) of the State Auditor's report violate the terms of the original contract?

RESPONSE: These questions are outside the scope of my review in the context of an official
opinion. See A.C.A. § 25-16-706. The opinion writing function of this office generally does
not extend to such factual matters as the review of the terms of specific contracts or the
circumstances attending a contract's execution.

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