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The race for Governor | Fact check

Ad glosses over lottery contract trouble

By Frank Phillips
Globe Staff / September 1, 2010

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The claim
In his latest television ad, state Treasurer Timothy P. Cahill, who is running for governor as an independent, highlights his management of the state lottery, saying he has avoided the kind of controversy that has plagued the agency in the past.

“Tim Cahill runs the lottery with no scandals and record returns,’’ the ad’s narrator says, as Cahill appears with a handful of people who are holding lottery tickets.

The facts
Cahill, in his management of the lottery, has faced serious allegations that he engaged in a so-called pay-to-play scheme.

His decision in 2004 to extend the $21 million contract of Scientific Games International to provide 80 percent of the lottery’s scratch tickets drew criticism that the selection was an insider deal.

One of his closest friends and political associates, Thomas F. Kelly, was secretly on the Scientific Games payroll, drawing in excess of $132,000 in consulting fees over four years, to look after the giant gaming firm’s interest at the lottery. In that time, the lottery gave Scientific Games three one-year extensions worth more than $30 million.

With the 2004 contract decision pending, Kelly, one of Cahill’s chief fund-raisers, was also pushing the company’s executives to donate to the treasurer’s political committee. Top aides in Cahill’s office at the time were urging that Scientific Games’s share of the scratch ticket work be reduced. Cahill rejected the advice.

Cahill has denied that he knew that Kelly, a longtime friend and Quincy neighbor, was on the Scientific Games payroll or that he was seeking campaign donations from the company’s executives.

Three months after Cahill’s decision to extend the contract, the company sponsored a fund-raiser for Cahill in New York that generated nearly $20,000 in donations.

Following the Globe’s reporting on the contract, a Rhode Island gaming company filed a lawsuit that alleges it lost out on Massachusetts business because Cahill and his aides showed favoritism to Scientific Games.

The State Ethics Commission looked into the contracting decisions and concluded in April 2009 “after a comprehensive review’’ that “this matter does not warrant further actions at this time.’’

Cahill said the commission’s finding cleared him of any wrongdoing. “It means I didn’t do anything wrong,’’ he said.

The analysis
Cahill can indeed point to the commission’s decision not to pursue the case. But the ties between Cahill’s political campaign and a major lottery vendor highlight the kind of coziness that sometimes exists between public officials, who rely on campaign contributions to stay in office, and companies that have major business before the state. Cahill’s ad glosses over what critics say is a significant mark on his record leading the lottery.

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