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Tennessee Lottery wastes $1M on needless legal activities

Tennessee LotteryTennessee Lottery: Tennessee Lottery wastes $1M on needless legal activities

The Tennessee Lottery has incurred out-of-control legal expenses that stem from needless and insignficant legal activities, according to recent reports

The state lottery became embroiled in more controversy yesterday with the disclosure that the Tennessee Education Lottery Corp., which oversees all lottery operations, has been billed for more than $1 million in legal fees since it began work last August.

Lottery CEO Rebecca Paul told the legislature's Lottery Oversight Committee that the corporation had paid only about half of what it had been billed and the other half is under review by Gov. Phil Bredesen's office and State Attorney General Paul Summers.

Sen. Steve Cohen, D-Memphis, said he was "appalled" at some of the bills from the consortium led by Waller Lansden Dortch and Davis of Nashville, which he said billed $250 an hour for such things as listening to tapes of board meetings and making telephone calls.

"One of the calls was to people about the legality of video lotteries in other states something which is illegal in our state," Cohen said. "I could have told them that."

Cohen also said he went to one board meeting where four attorneys for Waller Lansden were present.

"That is a thousand dollars an hour for them to sit there. They were there about three hours. They did things a paralegal could have done," Cohen said.

Paul responded that only one of the attorneys at that meeting was being paid.

James Weaver, the partner at Waller Lansden responsible for the lottery account, said he shared Cohen's desire to make sure legal services his firm provided to the lottery are necessary.

Weaver said the fees should be considered in context.

"Basically what you had is a great (lottery) statute and the well-wishes of 58% of the population of Tennessee (who voted for a lottery), and a great board that was appointed and said, 'Do this and do it as fast as humanly possible,' " Weaver said.

The controversy boiled to the surface at the Lottery Oversight Committee's first meeting as committee members began sorting through more than 150 bills dealing with the lottery, which began selling instant game tickets last month and plans to have on-line terminals operating by next month. On-line terminals allow players to pick numbers at a terminal connected to the lottery databank and find out when the winning numbers are drawn if they have won anything.

The committee and the Fiscal Review Committee plan to review the legal services bills and pass them along to the legislature's standing committee.

Earlier, there had been outcries from state lawmakers over the salaries paid to Paul and her executive team. She stands to receive a salary of $752,000 in base and incentive pay if all incentives are met.

There was also controversy when Bredesen initially picked the Nashville firm Bass, Berry & Sims as the board's legal counsel. He backed out of that arrangement the next day, saying he had made a mistake because of his close political ties with the firm. But the prestigious firm subsequently received $85,000 for its services before the other lawyers came on board.

Former state Treasurer Steve Adams, an executive of the lottery corporation, explained to the committee that the law allows the governor and the state attorney general to employ outside legal counsel for the state. The final compensation decision will be made by those two, he said.


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6 comments. Last comment 14 years ago by Lotto Czar.
Page 1 of 1
Saleo Paleo's avatar - Trek DS9worm3.gif
United States
Member #3493
January 25, 2004
6348 Posts
Posted: February 12, 2004, 9:07 am - IP Logged

So glad to see it is going so well with the lottery,We should have done this years ago,It can be a great help to education in our state as it is in Ga.The people who play the lottery like myself have been going to Ga, Ill, Ind.and other states to play now we can put our money back in our own state . Saleo Paleo

    fja's avatar - gnome1

    United States
    Member #91
    January 19, 2002
    12638 Posts
    Posted: February 12, 2004, 10:26 am - IP Logged

    looks like the states are starting to pay closer attention to their lotteries.  Obivously they're probably trying to get more contribution to the educational funds than they have been.

    "Everybody has to believe in something...I believe I'll have another beer!"   = W.C.Fields                      

      konane's avatar - wallace
      Atlanta, GA
      United States
      Member #1265
      March 13, 2003
      3782 Posts
      Posted: February 12, 2004, 2:09 pm - IP Logged

      Yes, GA should have paid much closer attention the years she was here and we might have had a better looking bottom line instead of "declining revenues."  With her finally gone they are saying sales are up, revenues are up.

      Good luck to everyone!

        johnph77's avatar - avatar
        United States
        Member #2987
        December 10, 2003
        832 Posts
        Posted: February 12, 2004, 2:13 pm - IP Logged

        Shakespeare - "Kill the lawyers."

        Blessed Saint Leibowitz, keep 'em dreamin' down there..... 

        Next week's convention for Psychics and Prognosticators has been cancelled due to unforeseen circumstances.


          dvdiva's avatar - 8ball

          United States
          Member #2338
          September 17, 2003
          2063 Posts
          Posted: February 12, 2004, 10:07 pm - IP Logged

          one million is nothing. in seattle the stupid mass transit light rail system wasted over 200 million and have yet to lay track (its 1 billion + now)

            Lotto Czar's avatar - sam
            Harrisburg, Pa.
            United States
            Member #3093
            December 23, 2003
            233 Posts
            Posted: February 13, 2004, 7:06 am - IP Logged

            Just goes to show how State lotteries, or any business gets in to trouble:  HIGH OVERHEAD.  Similair things happen here in Pa.  Too many extaneous perks for outside help.  Wine and dine drawing witnesses, wardrobes, coiffs and make up and bling bling for the employees, commissions for vendors, Yes I now they should look nice on TV, but, ...

            Just sell the tickets, collect the money, disburse what is to be paid to winners and programs. it's that simple.  Does the State run the lottery or is it outsourced to privateers?  The sins of providing public service for profit.  Shouldn't these lawyers, as well as everyone else connected (excepth the clerks at the stores that sell the tickets) be public employees?  That's why we have STATE RUN lotteries.  Legalized games of chance to benefit the public and not Illegal organized crime.

            Shame on the State of Tennessee

            Out here, it's send the big officials to the Management retreat in Hawaii so they can learn how to handle our work.  Yeah, let's keep on having these meetings until we figure out why we can't get our jobs done, and why we don't have any money not to do it with.l