Washington, D.C. Mayor Adrian M. Fenty is withdrawing a controversial proposal to award a $120 million lottery contract to a start-up firm in a maneuver designed to prevent the agreement from dying in the D.C. Council.
Fenty (D) will resubmit the proposal in September, when the council returns from a summer recess, interim Attorney General Peter J. Nickles said.
That would be the third time Fenty asks the council to give the contract to W2I Ventures instead of extending the agreement with Lottery Technology Enterprises, which has operated the D.C. Lottery for 25 years.
Fenty and D.C. Chief Financial Officer Natwar M. Gandhi have sought to give control of the lottery operations to W2I, which is less than a year old. City officials have criticized LTE for antiquated equipment, glitches and a 2006 security breach that led to $70,000 in fake tickets.
Fenty first submitted his proposal for a change in April, but the council blocked it with an 11 to 1 vote in May after some members raised concerns about W2I's credentials. He resubmitted the proposal the next day, but the council has yet to put the measure on the agenda, even as a 45-day deadline approaches.
"I'm troubled by the fact that the council has not held a vote on this," Nickles said yesterday. "If the winner of [a request for proposals] in an open and transparent process is not able to get the contract, the next time around, no one will bid."
Inaction by this weekend would knock out W2I, a partnership between local firm W2Tech and gaming powerhouse Intralot, even though it won the contract in a bidding process conducted by Gandhi's office.
Without a vendor in place, the city would have no choice but to rebid the contract or extend its agreement with LTE, a partnership between local firm New Tech Games and international company GTech, a rival to Intralot.
"I advised [Fenty] that we needed to do something to prevent that from happening, given the fact that... we have some outstanding claims with the current vendor," Nickles said.
The city is preparing a letter outlining fines and damages owed by LTE, he said: "It's to the extent of a million dollars."
Ann Walker Marchant, a spokeswoman for LTE, said the company is not aware of the pending $1 million assessment. She called the timing of the assessment "extremely surprising and curious" because the company has filed a complaint with the city's Contract Appeals Board.
Marchant said the company received estimates of much lower fines but did not receive a response to its offer to pay $350,000.
D.C. officials have argued that W2I could save the city $5 million annually in costs and would improve the city's gaming system with updated equipment.
W2Tech is owned by Alaka Williams and her husband, Warren C. Williams Jr., a real estate developer accused of neglecting his property. He also owned a nightspot that the city closed after a patron was fatally stabbed.
Those factors and associations with a fraternity brother of Fenty's gave some council members pause. LTE has political ties as well, leading council member Marion Barry (D-Ward 8) to abstain from voting in May. He said he had friends on both sides.
Alaka Williams said she and representatives of her company have met with council members to talk about the merits of the contract. "We won fair and square," she said.
Council Chairman Vincent C. Gray (D) said the council had already voted on the matter and had rejected W2I by tabling the mayor's proposal.
"I put it on the agenda on May 13," Gray said. "The vote was 11 to 1."