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McCord Bashes Millions Spent on Lottery Privatization

Rob-McCord-Portrait
Rob McCord

State Treasurer and gubernatorial candidate Rob McCord demanded Monday that Governor Tom Corbett halt spending on lottery privatization.

McCord criticized the administration over payments to attorneys and private consultants. Corbett, McCord announced, used $3.4 million from the state Lottery Fund to pay advisors for the Fund’s privatization efforts.

“If that $3.4 million were a stack of $1 bills, it would be taller than the Comcast Building – the tallest building in Pennsylvania,” McCord quipped.

The funds were spent the following ways.

  • $2.36 million to DLA Piper, a Philadelphia law firm
  • $1 million to Greenhill and Co. LLC, an investment banking firm in New York City
  • $116,000+ to Blank Rome, another Philadelphia law firm

Penn Live reported that the original March 2012 contract, made exclusively with DLA Piper, only set aside $375K for consulting services related to lottery privatization.

Corbett spokesman Jay Pagni reiterated the Governor’s case that the Lottery will be unable to withstand an aging population in Pennsylvania.

“The commonwealth embarked upon a Private Management Agreement (PMA) for the Pennsylvania Lottery out of a need to meet the growing demand for services for older Pennsylvanians and the desire to establish a predictable, reliable revenue stream to fund these programs,” Pagni said.

“Today, Pennsylvania is home to nearly 2.3 million people over the age of 60, more than 300,000 of whom are 85 or older. By 2030, nearly a quarter of the state’s population will be over age 60, and the 85-plus population is expected to grow by 80,000 people. This means funding must be secure and grow to meet higher demand for services.”

The Pennsylvania Lottery began in 1972. According the the Lottery’s website, it is the only statewide lottery in the country that donates all of its proceeds to programs for senior citizens.

In its four decades, the Lottery has raised $22.6 billion.

Back in December, McCord warned the Governor that the Treasury would not be able to disburse Commonwealth funds to Camelot Global Services, Inc., a British company and the sole company that had sought to purchase the Pennsylvania Lottery, if Camelot introduced gaming that would have violated the state’s Lottery law.

Two months later, Attorney General Kathleen Kane nullified the contract, claiming it created an “unlawful extension of executive authority” and that it improperly compensated Camelot for indirect expenses.

McCord, who is one of numerous Democrats running for Governor, said the contract funds could have been better spent on social services. Instead, he said, “It has lined the pockets of consultants who are pursuing an ill-advised plan to privatize our efficient and well-administered Lottery.”

Corbett spokesman Pagni called the $3.4 million an investment that would “provide $3 billion to $4.5 billion in new funding for senior programs over the 20-year contract term.”

On Tuesday morning, Auditor General Eugene DePasquale joined the fray. He announced that his office would “review and scrutinize” the $3.4 million payments.

“I urge Governor Corbett to terminate any further discussions with private vendors that are siphoning funds from senior programs,” the Democrat added.

2014

The lottery flap is an opportunity for McCord to leverage his position as a statewide official to challenge the Governor.

The move helps raise his profile among primary voters, and the issue is one that gives Democrats the higher ground (a PPP poll in March showed voters opposed the plan 67% to 17%).

Pagni knocked McCord over the political optics of the announcement.

“It’s quite unfortunate that Treasurer McCord is putting politics before the needs of older Pennsylvanians,” he said. “It is out of these needs, and the responsibility to ensure programs are available to our older residents, that Governor Corbett has pursued the PMA.”

2 Responses

  1. Wasting millions of dollars to supposedly give senior citizens more money is not a solution “guaranteeing more revenue to seniors.” Rendell and Corbett are both involved in this money-making scheme which benefits only them, not seniors. Taking millions of dollars out of the Lottery fund instead of paying for senior citizens to eat, obtain their medicine, and the other benefits guaranteed them under state law is what we should be focused on, not some conspiracy theory about casinos.

  2. When will the press find out why Mr. McCord and others are objecting to a solution that will guarantee more revenue to seniors? Is it because they are trying to protect the investment made by casino operators that have contributed to their political careers? Is it because they have a better plan to guarantee more revenue to seniors? Is it because they are just nasty political hacks? If only we had a press that engaged in critical thinking instead of repeating accusations we might know the accurate answers to my questions.

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