Risky business at the lottery

AN UNDERCURRENT of cash is eroding confidence in state government. The latest episode involves the Massachusetts State Lottery. In a convoluted arrangement set up by public relations consultant George Regan, the firm Scientific Games paid some $200,000 in undisclosed fees to Thomas F. Kelly - a close friend and fund-raiser to Treasurer Timothy Cahill - as the lottery was directing millions in ticket-printing business to the company.

During that period, Kelly also signed on with Bingo Innovative Software, which ended up competing with Scientific Games for a contract to develop a televised bingo game for the lottery. According to his contract, Kelly stood to pocket as much as $2.4 million if Bingo was chosen.

Kelly no longer works for either company. The lottery did not go forward with the bingo game. Still, big questions remain. What was Kelly's true role? Although he eventually registered as a lobbyist for Scientific Games, Kelly claims he was merely providing "business development services" to Bingo. The company, however, says Kelly was hired specifically to use his influence with Cahill to help it get the contract - and that Kelly related conversations the two had on that subject. That would make Kelly a lobbyist for Bingo, too, though he didn't register as such. If so, his payment arrangement would be illegal, since his compensation was contingent on Bingo winning the business.

Cahill, who notes that Bingo did not get the contract, says Kelly merely set up a meeting or two and introduced Bingo officials. He claims he didn't know Kelly was working for either company.

"I have never asked Tom who he represents or what business or companies he is involved with," Cahill says.

Well, then, wasn't he curious why Kelly was there during meetings with Bingo Innovative?

"I am not stupid," Cahill replies. "If someone makes an introduction, there is probably a relationship."

But it makes no difference, the treasurer insists, because he decides everything strictly on the merits.

This tangled affair demonstrates the need to strengthen the state's lobbying laws so they leave no ambiguous areas for door-openers or influence-peddlers to exploit. Further, as Secretary of State William F. Galvin suggests, executive branch officials should be required to notify his office when approached by intermediaries for interests trying to win state business.

Galvin is investigating this situation. But if his office's limited powers constrain his efforts, Attorney General Martha Coakley may need to step in. The public needs to know whether games are being played with the state lobbying laws.