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Lottery official's suite deal alleged

Fired Big Spin manager is the focus of a probe after reportedly earning `Hilton Honors' points through a state contract.

June 13, 2007|Nancy Vogel | Times Staff Writer

SACRAMENTO — The manager of "The Big Spin" television lottery show is under investigation for allegedly signing an unauthorized contract with the Hilton hotel in Glendale, accruing tens of thousands of frequent-user points redeemable for free rooms or airline flights.

Officials at the California Lottery, who fired broadcasting director Richard Leeson on Tuesday, are investigating whether he violated laws against bribery, conflicts of interest or other issues. A state Senate committee with jurisdiction over gambling issues held an inquiry into the matter Tuesday.

Leeson signed a contract in August 2006 with the Hilton Los Angeles North/Glendale to provide roughly 80 rooms a month for contestants on "The Big Spin," lottery officials told state senators Tuesday. The rooms cost $110 each per night, and the "Hilton Honors" points were accrued at point per dollar.

Through the contract, lottery officials said, Leeson garnered more than 97,000 points. He also collected points from the hotel in years predating the contract, they said, although they could not specify how many.

The law prohibits a state employee from benefiting personally from arrangements made on the state's behalf, said Donald J. Currier, lottery chief counsel.

"Whenever any employee of the state signs a contract obligating the state to do anything," he said, "they're just strictly prohibited from receiving any kind of financial gain for that, having any kind of financial interest in the outcome or receiving any kind of gratuity or reward for any kind of official action."

Currier said that a criminal investigation by the lottery's security team should be finished in weeks and the results would be referred to the local district attorney's office.

Lottery Director Joan Borucki said in a Senate hearing Tuesday that Leeson "had no authority" to sign the contract. She said booking hotel rooms was the responsibility of Jonathan Goodson Productions of Los Angeles, which has a five-year, $12.5-million contract with the lottery to write and produce the weekly "Big Spin" shows as well as provide contestant lodging.

"This was an instance where [Leeson] signed something he knew he wasn't supposed to sign and then never shared it," Borucki said. "This contract never went to legal, it never went to the contracts office, it never went to accounting."

Leeson did not return phone calls to his Sacramento-area home.

Borucki said her office was investigating why Goodson Productions did not handle contestant lodging itself. The firm's employees signed off on the Leeson-Hilton contract last August, even though the company's own contract with the lottery was in effect. It began in 2003 and expires in December.

Lottery officials said they did not learn about Leeson's contract with Hilton until February of this year, when UNITE HERE, a union seeking to represent Glendale Hilton employees, made an official request for copies of the lottery's contracts with the hotel.

"It was a little disturbing" that the contract came to light "only through a public records request," said state Sen. Dean Florez (D-Shafter). He is chairman of the Senate Governmental Organization Committee, which oversees the lottery.

The lottery is reevaluating "The Big Spin," in which contestants spin a wheel to win up to $3 million, as part of a wider review to correct a midyear slump in the sale of lottery tickets. The half-hour Saturday show was launched when the California Lottery started in 1985. Lottery officials told lawmakers Tuesday that Leeson's actions were an aberration. But Florez said the Hilton contract should serve as a "wake-up call," and the lottery should do a better job of overseeing its operations.

By law, a third of lottery revenue goes to schools. Last year, the agency contributed $1.29 billion to education.

Expectations for this year were lowered by $160 million in March because of diminished sales.

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