The ghost of Ernie Passailaigue 

Deals made by the former lottery chief cost Arkansas millions.

In September 2011, Arkansas Lottery Internal Auditor Michael Hyde told Lottery Commissioner Bruce Engstrom and Lottery Director Bishop Woosley, who at the time served as legal counsel, that he had uncovered some inconsistencies in a deal with the lottery's largest vendor, which could cost the lottery $20 million and possibly much more. According to Engstrom, when Hyde began discussing looking further into how the contract was awarded and if it should have gone to another vendor Woosley said, "If this gets out, we're all going to lose our jobs." (Woosley has said he doesn't remember saying that, but if he did, the context was, if an inaccurate report gets out, people could lose their jobs.)

Shortly thereafter, Hyde and Woosley met with former Lottery Director Ernie Passailaigue to discuss the contract and why a week after it was signed Passailaigue amended it to make the terms more favorable to the vendor. The day after the meeting, Passailaigue tendered his resignation.

For more than a year, whether Passailaigue adhered to the law when he amended the contract was a matter of fierce debate between lottery staff, the state legislative oversight committee of the lottery and the division of legislative audit. Ultimately, the three settled the matter by agreeing that the lottery would operate differently in the future. Hyde's investigation, which became public last month following a Freedom of Information request from the Arkansas Times, rehashed that argument but also considered a more salient question: Why did Passailaigue sign off on a contract that gained the lottery nothing and cost it millions?

It's a question no one has been able to answer satisfactorily, including Passailaigue. Reached at his home in Isle of Palms, S.C., last week, Passailaigue wouldn't discuss why he altered the contract. "If it comes to a court of law, I will set the record straight," he said. Pressed on why it would come to a court, he said, "Contracts are subject to dispute or misinterpretation."

"It doesn't take any legal analysis to see that what he did was wrong," Gov. Mike Beebe said of Passailaigue on the March 30 edition of "Arkansans Ask: Governor Mike Beebe" on AETN. "It was wrong for him to do that. That in and of itself would have amounted to a firing offense. Does that render the contract as changed illegal? I don't know the answer."

Pressed by host Steve Barnes as to his sense of the deal, Beebe said, "My initial sense is that if it was wrong to do it, then it's illegal."

Weeks later, after asking his in-house counsel to review the contract, Beebe said the contract is legal, but "not right." Like the speaker of the House and the Senate pro tempore, Beebe controls three appointments to the commission, but otherwise has no authority over the lottery.

On April 11, Hyde made his official recommendation to the lottery commission: seek outside legal counsel to determine the validity of the contract and, should it be deemed invalid, seek financial redress. Seven commissioners, including two appointed by Beebe — Chair Dianne Lamberth and Secretary Treasurer Ben Pickard — voted to ignore the auditor's advice and reaffirm their commitment to the vendor, Scientific Games International (SGI). Engstrom and George Hammons, another Beebe appointee, voted against reaffirming the deal. After the vote, the commission went into executive session for almost an hour to evaluate Woosley and Hyde. It reconvened without taking any formal action, promising to pick up the evaluation in May. Engstrom said after the meeting he feared the commission might vote to fire Hyde. "I've always thought his job is in jeopardy and there's nothing that happened today that changed that," he said.


Speaking of...

Comments (2)

Showing 1-2 of 2

Add a comment

Subscribe to this thread:
Showing 1-2 of 2

Add a comment

More by Lindsey Millar

Readers also liked…

Most Shared

  • World leaders set to meet in Little Rock on resource access and sustainable development

    Next week a series of meetings on the use of technology to tackle global problems will be held in Little Rock by Club de Madrid — a coalition of more than 100 former democratic former presidents and prime ministers from around the world — and the P80 Group, a coalition of large public pension and sovereign wealth funds founded by Prince Charles to combat climate change. The conference will discuss deploying existing technologies to increase access to food, water, energy, clean environment, and medical care.
  • Rapert compares Bill Clinton to Orval Faubus

    Sen. Jason Rapert (R-Conway)  was on "Capitol View" on KARK, Channel 4, this morning, and among other things that will likely inspire you to yell at your computer screen, he said he expects someone in the legislature to file a bill to do ... something about changing the name of the Bill and Hillary Clinton National Airport.
  • Fake news

    So fed up was young Edgar Welch of Salisbury, N.C., that Hillary Clinton was getting away with running a child-sex ring that he grabbed a couple of guns last Sunday, drove 360 miles to the Comet Ping Pong pizzeria in Washington, D.C., where Clinton was supposed to be holding the kids as sex slaves, and fired his AR-15 into the floor to clear the joint of pizza cravers and conduct his own investigation of the pedophilia syndicate of the former first lady, U.S. senator and secretary of state.
  • Reality TV prez

    There is almost nothing real about "reality TV." All but the dullest viewers understand that the dramatic twists and turns on shows like "The Bachelor" or "Celebrity Apprentice" are scripted in advance. More or less like professional wrestling, Donald Trump's previous claim to fame.

Latest in Cover Stories

Visit Arkansas

View Trumpeter Swans in Heber Springs

View Trumpeter Swans in Heber Springs

Magness Lake, in Heber Springs, is a magnet for swans

Event Calendar

« »


  1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30 31

Most Viewed

  • Arkansas archeologist does his job, is asked to leave

    Amid Department of Arkansas Heritage project.
  • 2017 legislature spreads its wings

    Also, Asa on Trump, schmoozing schedule and more.
  • Tomb to table: A Christmas feast offered by the residents of Mount Holly and other folk.

    A Christmas feast offered by the residents and future residents of Mount Holly and recipes from the Times staff.
  • Dems path forward

    The Arkansas Dems can lead by doing the opposite of what the national Dems did when they reelected the same leadership in charge since the equally embarrassing losses as seen in Arkansas. Electing 75-plus-year-olds is no way to embrace the youth.
  • The sweet hereafter

    This week, the Arkansas Times falls back on that oldest of old chestnuts: a recipe issue. Being who we are, of course, we had to put a twist on that; namely, the fact that most of the recipes you'll find in these pages are courtesy of people who have shuffled off to that great kitchen in the sky, where the Good Lord is always whipping up new things in his toque and apron, running the great mixers of genetics and time, maybe presenting the batter-dipped beaters and bowls to Jesus for a lick down.

Most Recent Comments


© 2016 Arkansas Times | 201 East Markham, Suite 200, Little Rock, AR 72201
Powered by Foundation