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Colorado Lottery violations detailed in report

Mar 10, 2004, 4:16 am

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Colorado LotteryColorado Lottery: Colorado Lottery violations detailed in report

Report cites gift-taking, coziness with vendors for 4 years

The Colorado Bureau of Investigation has sent the Arapahoe County district attorney a report that details widespread gift-taking and policy violations in the offices of the Colorado Lottery.

The report focuses largely on the last four years of the tenure of former Lottery head Mark Zamarripa, alleging that he presided over a culture of coziness with vendors, according to sources familiar with the report.

Department of Revenue chief M. Michael Cooke and the new head of the Lottery, Margaret M. "Peggy" Gordon, have already implemented reforms; since the investigation was launched, four lottery officials have been placed on administrative leave, have resigned or been fired.

The report mirrors a similar investigation into the Lottery conducted in 1989 by then-state Attorney General Duane Woodard that found Sheryl Harrington, Lottery director at the time, accepted no fewer than 50 meals from Lottery contractors. She then sought and received state reimbursement for those meals, pocketing the cash.

Woodard, in that report, described Harrington's actions as "offensive," saying they were unlawful and that they appear to have constituted embezzlement. No legal action was ever taken against Harrington.

"It's like a repeat of '89," Cooke said. "It's the same issues surfacing again, but with greater magnitude. Some of the same names are popping up again. That is certainly very troubling."

Zamarripa was named as accepting gifts from vendors in that 1989 report. He resigned in November on the day he was to meet with Cooke to discuss expenses he incurred during a recent trip to New Orleans. The criminal investigation into the Lottery was launched soon after his departure.

Zamarripa did not return a call seeking comment Tuesday.

George Turner, a top state Revenue Department official, for years had Lottery oversight. He retired in January just before he was to meet with Cooke about questions she had about Turner's "improper communication with a vendor" while vendors were bidding on a state contract, records show.

Dan Noreen was placed on paid administrative leave two weeks ago. He is to meet with Cooke today to answer questions that have surfaced as a result of the investigation.

Cooke said she could not describe the report in detail until Arapahoe County District Attorney Jim Peters decides whether criminal charges should be filed.

CBI Agent in Charge Bob Brown, the report's chief author, declined comment.

Michael Knight, spokesman for the Arapahoe County district attorney, described the report as "long and complex" but would not give a timeline on when a decision might be made.

The CBI report, though, does provide details of the inner workings of the Colorado Lottery, and the close-knit relationship between vendors and Lottery officials.

For example, investigators found that employees within the Lottery complained to higher- ups about the rising culture of gift-giving, leading to conflict- of-interest reforms in 2002 that set a $50 limit for the value of gifts to employees.

Investigators found, though, that those revamped rules were riddled with loopholes, and failed to stop gift-giving largess.

The investigation also uncovered abuses that violated state policies, but were not necessarily criminal.

For example, the Lottery's former director of tech services was fired after the probe allegedly uncovered pornography on his computer.

Cooke has implemented one of the toughest conflict-of-interest rules in the nation for the Lottery, barring employees from accepting even a cup of coffee from those who want Lottery business.

Prior to that, though, an examination by The Denver Post in December showed how key Lottery leaders, including Zamarripa, regularly accepted gifts and free meals from vendors doing business with the Lottery.

For example, in 2002, Zamarripa began his year with two tickets to a Jan. 1 football game, courtesy of KOA Radio.

Two weeks later, he had dinner with nine other people, courtesy of the Lottery's advertising agency.

In February, it was lunch and dinner with the ticket vendors.

He had another dinner with ticket vendors in March, followed by two rounds of golf courtesy of the advertising agency in April and May.

Many more abuses were detailed in the report, officials said.

"We learned quite a bit," Cooke said. "... It's in the hands of the DA. We're all anxious for this to come to some conclusion."

Denver Post

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