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Tenn. Lottery Executive Perks Criticized

Jul 5, 2004, 1:47 pm

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Tennessee LotteryTennessee Lottery: Tenn. Lottery Executive Perks Criticized

Tennessee lottery funds were used to pay for six months of temporary housing for lottery CEO Rebecca Paul and three other top executives, a perk one state senator says is too costly.

"I think these moving expenses are just part of a condition that needs to be reined in," said state Sen. Steve Cohen, D-Memphis, the chief sponsor of the lottery and a frequent critic of bonuses paid to lottery staffers.

"All the expenses of the lottery need to be examined closely and re-examined. They've not done a good enough job to keep expenses low," he said.

Cohen says such expenses take dollars away from the college scholarships and prekindergarten programs the lottery was created to fund.

But lottery officials contend that paying the rent for the executives, all of whom earn more than $180,000 a year, helped get the lottery off to a timely start with $800,000 to $1 million of daily revenue at stake.

Nearly $50,000 has been paid in temporary housing costs for the lottery leaders. At the four complexes where the executives rented apartments, the lottery paid $1,500 to $2,650 a month.

Although the lottery is run by a seven-member board appointed by Gov. Phil Bredesen, it has been set up to mirror the private sector in some ways so it can compete in the marketplace.

Paul, the lottery CEO, was not available for comment.

But lottery board member Jim Hill of Chattanooga said the temporary housing expenses were modest compared with what private industry would pay to relocate an executive.

"We wanted to get the lottery started as early as possible. Hundreds of thousands of dollars are at risk every day you don't start up," said Hill, chairman of the board's human resources committee.

The lottery, which started Jan. 20, began 16 days ahead of schedule and kicked off the multistate Powerball game earlier than anyone thought possible, Hill said.

The senior staff also worked without the help of lottery consultants, saving the lottery as much as $1 million, Hill said.

The four executives had board approval to stay in temporary housing beyond the typical 90 days set forth in company policy.

"They spent an extraordinary amount of time working, day and night, 24-7," Hill said.

As a result, he said, the lottery education fund will get $120 million this month, more than the $88 million projected.


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