The Connecticut Lottery Corp.'s governing board voted Thursday to hire Gregory Smith, acting director of the Illinois Lottery, as its new CEO — in hopes of stability after nearly two years of turmoil, recriminations and investigations at the quasi-public agency with a $1.2 billion annual budget.
The lottery's top job had been vacant since Sept. 22, 2016, when last CEO, Anne Noble, stepped down amid controversy and entered an unusual and lucrative severance agreement with the agency's board of directors.
Smith, 59, who will start July 20 and be paid $200,000 a year, is the former director of the Vermont Lottery. He ran that lottery from 2012 to 2016 — then left to become acting director for the Illinois lottery agency, which several years earlier had become the first in the country to hand over its day-to-day management to a private firm.
Reached by phone Thursday afternoon in Illinois, Smith said he didn't feel right talking about his new job until he consulted with his current superiors. "I would probably like to delay this conversation until i have another exchange with the Illinois administration," said Smith, an appointee of Republican Illinois Gov. Bruce Rauner.
Before running lotteries, Smith had a varied business career. He worked from 2007 to 2012 for the Vermont Country Store — a catalog retail and e-commerce business — mostly as its as director of operations. From 1995 to 2006, he and his wife owned and ran a country inn in Mendon, Vermont, where from 2006 to 2015 he served as chairman of the town government's Select Board.
From 1993 to 1995 he was a tax analyst/senior accountant in Philadelphia for the international pharmaceutical company SmithKline Beecham Corp. He received his bachelor's degree in 1981 from Purdue University in hotel and restaurant management, and worked from graduation until 1988 for Hyatt Hotels Corp.
For all of the well-publicized issues that Smith will need to grapple with at the lottery, there's one problem he won't have — and that's a Niagara Falls of revenue. The lottery corporation turned over a record $345 million in revenue to the state's general fund in the fiscal year that ended June 30, based on more than $1.2 billion in ticket sales. The old revenue record was $338 million, two years ago.
The newly concluded fiscal year's $785 million in prizes to players, and its $70 million in commissions to retailers, also were records.
Noble, the previous CEO, was making $212,000 in the job, $12,000 more than Smith will be.
Her departure from the top job in September 2016 came during a Department of Consumer Protection investigation of lottery officials' handling of a 2015 fraud scheme, in which employees at lottery retail outlets managed to print out winning tickets for themselves in the 5 Card Cash game. The probe resulted in 15 arrests of employees at retail lottery outlets such as convenience stores.
Since then there's has been a succession of acting leaders, continual controversies — and even a botched Lottery drawing this past New Year's Day that required a do-over drawing weeks later and spawned recriminations, personnel problems and government investigations that still endure now.
Noble stayed on the state payroll until Jan. 31, 2017, when she reached a 10-year employment threshold to qualify for lifetime state retirement benefits, and then she collected $25,000 a month as a consultant until July 31, 2017. Now she has a job in New York State and is eligible for a Connecticut pension.
The lottery has had two interim CEOs since Noble left, the more recent being Chelsea Turner, whose regular job had been as the lottery's chief of strategy and government and operational affairs. Her salary was raised from $165,000 to $190,000 when she moved into the acting role more than a year ago. She was one of the finalists for the top CEO job, but ultimately withdrew from the running.
On Thursday, the lottery decided to make her interim vice president, effective when Smith arrives on July 20. Turner's salary will stay at $190,000 in her new job, lottery board of directors Chairman Donald DeFronzo said. Both Smith's hiring and Turner's promotion were approved unanimously by the lottery board at a special meeting Thursday morning.
Lottery Billed For Cable TV
The first acting lottery CEO, in the months immediately following Noble's decision to step down, was then-lottery board chairman Frank Farricker , an appointee of Gov. Dannel P. Malloy, but that did not end well.
Farricker, an active Greenwich Democrat, assumed the unpaid role of acting CEO while also retaining his chairman's position, which led to problems in the following months: Farricker billed the lottery corporation for expenses including his home cable TV bill, and then, in early 2017, he applied to secure the full-time CEO's position for himself on a paid basis.
Farricker's effort to get the paid job subjected him to pointed questions and criticism during investigative hearings by a legislative committee in May 2017 — and soon afterward Farricker resigned as both chairman and interim CEO. Turner then was elevated to the interim CEO job.
In October 2017, Farricker paid $11,318 — a $5,000 fine and $6,318 in restitution to the state — to settle a complaint by the state Office of State Ethics that he used his position to receive an "improper financial benefit."
Just when things seemed to be calming down at the lottery, New Year's Day 2018 brought a million-dollar-mistake that has haunted the agency ever since.
A five-member team that selected winners in the New Year's Super Draw game mistakenly excluded 100,000 of 214,601 eligible tickets that had been sold to players. The error resulted in a do-over drawing on Jan. 16 and a loss of about $1 million — along with suspensions of employees, and investigations by legislators and government regulators.
The month after that snafu, Turner placed the agency's $139,000-a-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 the flawed Jan. 1 drawing. DuPuis immediately went out on a Family and Medical Leave Act leave, and has not returned to work.
The agency's human resources director, Jane Rooney, also went out on a leave around the same time — even though she has not been targeted for possible discipline — and as of Thursday was still not back in the office, DeFronzo confirmed.
(Click to display full-size in gallery)