The Connecticut Lottery Corp. has placed its $139,000-a-year year security director, Alfred DuPuis, on a paid leave pending possible disciplinary action after an internal investigation concluded that he "acted with gross neglect... of his duties" leading up to a million-dollar blunder in a Jan. 1 drawing.

(See Connecticut Lottery forced to redraw special New Year's raffle after 'human error', Lottery Post, Jan. 2, 2018.)

Interim lottery CEO Chelsea Turner imposed the leave Thursday. That was same day she and the lottery's board of directors sent the governor and other state officials a 138-page investigative report detailing how 100,000 of 214,601 eligible tickets were excluded from the selection of in the New Year's Super Draw game. The mistake resulted in a do-over drawing on Jan. 16 and a loss of about $1 million.

DuPuis, a 21-year lottery veteran, couldn't be reached for comment on the report — which Government Watch obtained Friday via a Freedom of Information request.

The report's strongly worded allegation could jeopardize DuPuis' position as one of the lottery's highest-ranking managers — and it was only one of several new developments sure to prolong more than year's turmoil at the quasi-public agency that raises $330 million in annual state revenue from $1.2 billion in ticket sales.

Here's what else is happening:

• Disciplinary action is being considered against two DuPuis subordinates, drawing supervisor Valerie Guglielmo and investigator Robert Balicki, both of whom served on a five-member team that botched the Jan. 1 drawing. They've been on paid leaves since Jan. 2. Thursday's report said that Guglielmo, who is paid $89,000, entered the wrong ticket numbers into a random number-generating computer and "acted with reckless disregard for the integrity of the game." Balicki, paid $77,000 a year, "acted with serious neglect in the execution of his duties," the report said.
• The president of the union representing Guglielmo and Balicki, John DiSette of the Administrative and Residual Employees Union (A&R), said Saturday that "the adverse outcome was the result of systemic deficiencies, not misconduct or negligence. The employees involved are all highly respected, experienced, and dedicated employees who performed within the guidelines approved for them." He said the report shows that there are "some simple steps that could be taken to resolve the systemic problems."
• State Rep. Joe Verrengia, co-chairman of a legislative committee that oversees legalized gambling, said Thursday that he doesn't think Turner, a lottery manager who has been interim CEO since mid-2017, should be hired as permanent CEO. She's a finalist for that job, along with out-of-state applicants, and the lottery's board reportedly was leaning toward offering her the permanent job days before the Jan. 1 drawing disaster. But, Verrengia said:"The only way to remove the cloud" over the agency "is to hire an outside, experienced CEO [with] credentials to run a billion-dollar organization." Turner declined comment other than saying she respects Verrengia's opinion.
• Turner and other top lottery staff are recommending the firing of Marcum LLP, a national accounting firm that has about 12 months left on a three-year contract as the lottery's outside auditor. The lottery's board is scheduled to decide Thursday whether to terminate the contract that paid Marcum $60,800 in 2017. One of Marcum's accountants, Keith Lewis, served as an observer on the five-member Jan. 1 drawing team to ensure that "Official Drawing Procedures... are followed" — and they clearly weren't.
• Lottery officials asked repeatedly to talk to Lewis in their investigation of the Jan. 1 drawing snafu, but "Marcum never made Mr. Lewis available... for an in-person interview," the report said. Instead, Lewis' responses were relayed to the lottery in writing by Marcum's general counsel, Leslie Adler. The lottery "is pursuing its legal options regarding [Marcum]," the report said.
• Twelve days after the Jan. 1 disaster, Marcum billed the lottery for Lewis' participation on the drawing team. "On January 13, 2018, despite not yet having responded to the [lottery's] multiple requests to speak with or receive answers from Mr. Lewis, Marcum emailed... an invoice for $3,000" — adding that the lottery "disputes the... invoice." Lewis' participation was a side job in addition to Marcum's auditing contract that was extendable up to three years.

While Thursday's report said the lottery is "considering whether disciplinary... action is warranted" for DuPuis, Guglielmo and Balicki, it also said they weren't the only ones with responsibility for the error. It said Guglielmo and Balicki were joined on the five-member drawing team by Lewis and by two employees of the Department of Consumer Protection, Christine Komorowski and Atanu Ahmed.

"[T]he entire Drawing Team should have caught the error," the report said.

A Group Screw-Up

The DCP, which serves as the state government's regulator of the lottery corporation, admitted in an investigative report of its own — released a day before the lottery's report — that it shares in the blame.

"The investigation concluded that the error occurred as a result of the Drawing Team [that DCP was part of] deviating from approved official drawing procedures," the DCP report said.

Komorowski and Ahmed are still on the job but have been removed by DCP from participation in lottery drawings. "There's been no final decision about disciplinary action at this time," DCP's communications director, Lora Rae Anderson, said Saturday.

State employee unions represent the DCP's Komorowski and Ahmed and the lottery's Guglielmo and Balicki. But DuPuis, as a top-ranking manager, isn't represented by a union.

Lottery board chairman Donald DeFronzo said Friday that lottery officials will carefully consider explanations for what happened before deciding bout discipline, adding that DuPuis has had "a very good work record over the years."

The DCP's Anderson said the Jan. 1 drawing blunder happened this way:

• The five members of the drawing team had the benefit of illustrated instructions — in the form of printed "Official Drawing Procedures" — for how to enter the correct high and low ticket numbers into the electronic number-generating machine that randomly selects the winners.
• Those printed procedures emphasized that ticket numbers went upward from a low of 100001 — so the second ticket would be 100002, the third 100003, and so on. With, 214,601 tickets sold, the range of eligible tickets should have been 100001 at the low end, and 314601 at the top.
• But the lottery employee who led the team instead entered 214601 as the top number, omitting the 100,000 tickets numbered from 214602 through 314601. And the DCP and Marcum representatives didn't catch the error.

That explanation, first given in January, still stands — but the new investigative reports by the lottery and DCP have added another wrinkle: They say that the lottery's Guglielmo, who entered the numbers into the machine, had created an unofficial "checklist," which, although intended to avoid mistakes, contributed to the error.

As told in the lottery's report, Guglielmo, who was formally designated as "primary drawing performer," asked and received DuPuis' permission to create the concise, two-page "checklist" derived from the lengthy "Official Drawing Procedures." DCP officials were even consulted about what should be on the checklist.

But the final version of her checklist, which she used at the drawing, didn't include the same kind of explicit, illustrated emphasis on a step in the procedure in which the total of tickets sold should be adjusted upward by 100,000.

"The primary factor that led to the drawing team missing this critical step is that instead of using the Drawing Procedures, the drawing team used an unofficial and unapproved checklist," the lottery's report said. "The checklist omitted the adjustment of the ticket number range entry. The Drawing Procedures, in stark contrast, clearly describe the necessary adjustment, and even include screenshots of what the adjustment looks like on the RNG [Random Number Generator] screen. If the drawing team had been following the Drawing Procedures, as required, then the probability of this particular error occurring is practically zero."

The DCP report, for its part, said that even though the drawing team "was permitted to use a checklist to assist with the Drawing, it was not an official, approved document and did not replace the Official Drawing Procedures."

One of the lottery report's recommendations is that, in the future, ticket numbers should start with 000001 — eliminating the need to adjust upward by 100,000.

Accountants Deny Blame

The checklist looms large in Marcum's defense of Lewis' actions at the Jan. 1 drawing. Adler, the general counsel for Marcum, said in a Jan. 29 letter to the lottery that Lewis was handed the checklist and was advised by a DCP representative "to follow the checklist" — even though Lewis had in his possession a copy of the full set of illustrated procedures and had said he intended to use them.

"THE DCP'S INSISTENCE ON THE USE OF THE CHECKLIST CAUSED THE ISSUE WITH THE... DRAWING," Adler said in a bold heading above the concluding paragraphs of her letter. "Put simply, Marcum had no responsibility for the error," she wrote.

But the DCP's Anderson said Adler's letter is wrong on two counts. First, she said, it was not a DCP representative who gave Lewis the checklist, but a lottery representative. Second, Anderson said, an official video of the drawing shows that nobody in the room — no one from either the lottery or the DCP — told Marcum's representative "to use a checklist as a replacement for the official game procedures."

Even though DuPuis permitted Guglielmo to create the checklist, he told her not to show it to the Marcum accountant, Lewis, because "the accountant was supposed to use only the Drawing Procedures," the report said. But the report said Guglielmo gave Lewis the checklist anyway — although she said in an affidavit that she told him to "only use the Drawing Procedures."

The lottery report says that the drawing video shows "a sidebar conversation" involving Guglielmo and Lewis that appeared to be "about the Checklist. Ms.Guglielmo says something about 'Fred' but adds 'I can give it to you anyway.'" Then "Ms. Guglielmo hands Mr. Lewis the Checklist as she says 'Here, just follow along for now.'"

The lottery's report said that DuPuis gave contradictory information about whether such checklists had ever been used in previous Connecticut Super Draw games — which are special games offered at relatively infrequent intervals; just 14 of them, including the Jan. 1 flawed drawing, have been conducted since 2010.

It turned out that no checklists had ever been used in Connecticut Super Draw games, the report said. But, it added: "Mr. DuPuis contradicts his original signed Affidavit when he provided... a handwritten note, dated 01/25/2018, which reads in pertinent part: 'We used a checklist from the start of CSD's (attached).' Mr. DuPuis attached an undated, incomplete, single page" of an old checklist — which had been rejected and never used.

Meanwhile, Verrengia said he plans to hold an investigative hearing into the drawing snafu this coming Thursday in his role as co-chairman of the General Assembly's public safety committee. The committee held two hearings last May into problems that plagued the lottery after former CEO Anne Noble stepped down during a DCP investigation into a fraud scandal involving lottery retailers who compromised the 5 Card Cash game three years ago. Thursday's committee hearing will be at 11 a.m. in the Legislative Office Building in Hartford.