News-Record.com

Of all the questions swirling around the lottery - what games will be played, how big will the jackpots be, how much money will it actually raise - the first that needed to be answered was who was run the thing.

We know now that a Greensboro woman will be among the nine member lottery commission, the group that will run the state numbers game.

Gov. Mike Easley has made his five appointments according to the Associated Press. House Speaker Jim Black and Senate Leader Marc Basnight each have two and are expected to make their choices known this afternoon.

Among Easley's appointments is Linda Carlisle, a member of the UNCG Board of Trustees and the former president of Copier Consultants. Carlisle is known locally as a community activist and fundraiser.

I grabbed this blurb on her from a 2001 UNCG press release:

Linda Arnold Carlisle of Greensboro, Class of 1972. Described as "an example of 'service' in action," Carlisle is one of the founders of Friends of Women’s Studies and is a long-time supporter of the UNCG Women’s Studies Program, which created the Linda Carlisle Faculty Research Award in her honor. In addition, she has been both a board of directors member and president of the UNCG Excellence Foundation. She recently completed a term on the Bryan School Advisory Board. At the local level, she serves on the boards of the Community Foundation of Greater Greensboro, the Family Life Council, the Chamber of Commerce, the Greensboro Montessori School and Youth Chorus. She also is on the board of SterlingSouth Bank and Trust. She retired in 1997 from Copier Consultants, a firm she owned and managed with her husband for nearly 20 years.

According to the Associated Press, Easley's other four appointees included: Former Glaxo Inc. chief executive Charles Sanders, who will chair the board, Crime Control and Public Safety Secretary Bryan Beatty, former Easley aide John McArthur, who is a vice president and general counsel for Progress Energy Inc., and Wilson attorney Robert Farris Jr.

You may also know Sanders from his 1996 run for the Democratic nomination for Senate.

Black and Basnight's appointments were expected to come later this afternoon. (So much for announcing them all as a group, I guess.)

Update1: Basnight has appointed Robert W. Appleton of Wilmington and Malachi J. Greene of Charlotte to the North Carolina State Lottery Commission. Click here for more on those two.

Update2: Click here for Easley's news release on his appointments.

Update3: Black has appointed Gordon Myers, of Asheville and Kevin Geddings, of Charlotte. Meyers will serve as the lottery commissioner with retail experience. He recently retired from his job as Vice President of Real Estate for Ingles Markets, Inc., where he oversaw all real estate development and leasing for the chain's approximate 200 stores and shopping centers. Geddings is the owner of Geddings & Phillips Broadcasting, a radio station holding company, and Geddings & Phillips Communications, a Charlotte-based PR-advertising agency.

And yes, we'll probably have something about this in the dead-tree version of the paper tomorrow.

Update4: Our friends from the Associated Press weigh in with an early version of their story after the jump:

Here are the stories I've been working on lottery-wise for the paper:

• This one ran Friday, and is just a quick run down of the new lottery commission
• A profile of new lottery commissioner Kevin Geddings ran Saturday. Of all the lottery commissioners, Geddings has the most experience with lotteries.
• And finally, this profile of Linda Carlisle, who lives in Greensboro, ran today.

President Bush has nominated White House Counsel Harriet Miers to the U.S. Supreme Court. Click here to find out more about her.

Now, regular readers know this blog hasn't been big on federal news here, especially if it doesn't relate to North Carolina in some way.

But one line on Miers resume did catch my eye: chair of the Texas Lottery Commission.

I have no idea if the Senate Judiciary Committee will query her on whether she has a judicial bias for pick-3 over pick-6 games or if she is a strict constructionist who believes the player must pick the numbers rather than letting the computer do it.

But I think Miers illustrates both how high-profile a job lottery commissioner is and how much political connections might matter.

Prior N.C. lottery coverage here and here.

This notice from the governor’s press office:

RALEIGH – The North Carolina Lottery Commission will meet THURSDAY (Oct. 6) from 10 a.m. to 2 p.m. in the ABC Commission Room in the Administration Building (116 West Jones Street) in Raleigh.

The state lottery commission held its first meeting today. Mainly it was an organizational affair. Introductions were made, the lawyers told the commissioners how to stay out of trouble, the next meeting date was set...commission members ate sandwiches at the end (yes, really).

The most substantial pieces of business done today included:

• giving chairman Charles Sanders the authority to draft, circulate among board members and post a job description for the lottery's director. This will actually be the hired staff person whose job it is to run the daily operations.
• Naming the lottery the "North Carolina Education Lottery."

If you are among a very specific population, that news either makes you really happy or is disappointing. The population I'm talking about, of course, include the folks who buy up web domain names hoping they'll become valuable.

Folks have already bought up NCEDUECATIONLOTTERY.COM and NORTHCAROLINAEDUCATIONLOTTERY.COM. For that matter, a lot of the other permutations have also been bought, including the more generic NCLOTTERY.COM .

No word on how much, if any, money the commission might be willing to shell out for its domain.

In the mean time, officials are looking for temporary space in the real world and in cyber space.

Now that our friendly local corporate trainers are done with their two days of teaching me ... something or other, I'm sure it was important ... let's look around at what I've been missing lottery-wise.

First off, the lottery has a new web site: http://lottery.nc.gov. I don't see any reason they couldn't keep that address, so all you folks who rushed out and bought up domain names might be out of luck.

Among the first items posted is a help wanted advertisement for an executive director. In case you're thinking of applying:

The Executive Director must have considerable management and operation experience and knowledge of the state-sponsored lottery industry. Experience with start up of a state lottery is preferred. The successful candidate will have demonstrated commitment to integrity and the promotion of responsible gaming. Candidates should have substantial experience with personnel supervision, contract and financial management, public relations, and strong leadership.

Click here to read the whole thing.

Next up, I have to give props to another paper for doing something I wish I had thought about. The Raleigh News & Observer asked for and got e-mails from Speaker Jim Black's office regarding the lottery.

The e-mails showed that one of the two biggest lottery vendors, Scientific Games, helped write the lottery law. Click here to read the story. (You may have to register as a user.)

There is no question this looks hinky. But it's a good example of something that goes on quite a bit down at the legislature. Lobbyists submit proposed wording and re-wording of legislation all the time. In this case, the lobbyists in question happen to have left a particularly vulnerable trail of bread crumbs, but this isn't a unique circumstance as far as folks with interest in a particular piece of legislation helping to shape that legislation.

It will make the RFP and other contracting maneuvers very interesting to watch though. And if Scientific Games does get a big fat lottery contract, you might expect questions to persist.

By the way, expect a lot of sniping back and forth between Scientific Games and their chief rival, GTECH. These folks go after each other in lots of states. Wars-of-words, lawsuits and political back-door dealings seem to be pretty much par for the course with these two.

Of course, at least one lottery commissioner has talked about having some of the work - computer networking and such - that a vendor usually does undertaken by the state itself. Malachi Greene, of Charlotte, mentioned after the first lottery commission meeting that he was not entirely convinced the state lottery should be contracting all the work out. It will be interesting to see if anyone other commissioners join him in that view.

I don't know that anyone really expected a state sponsored gambling enterprise to be pure as the driven snow. It's just doesn't seem like the nature of this particular beast to be without problems.

But, as this latest story from the Associated Press illustrates, things seem to be "off to a right good mess," as my grandmother would say.

Meanwhile, if you're keen on watching the lottery commission in action, take note of the following (after the jump):

For my lottery commission story from today’s paper click here. It’s merely the report out of one subcommittee, but there it is anyway.

The full lottery commission meets again tomorrow (Wednesday) at 10 a.m. Another subcommittee – this one to deal with rules for merchants who wish to sell lottery tickets – meets before that at 8 a.m.

And finally, if you've been following the Kevin Geddings saga, this from our friends at the AP:

RALEIGH, N.C. (AP) - Despite bipartisan calls for his resignation, a lottery commissioner under scrutiny for his relationship with a lobbyist for a potential gambling vendor said Monday that House

Speaker Jim Black has told him he wants him to stay on the panel.
"I think the speaker was very supportive," commission member Kevin Geddings said in an interview. Geddings said Black, who recommended him to the new nine-member panel, told him to "keep doing a good job, and that's what I intend to do."

Geddings, who operates a public relations firm, disclosed last month that he was friends with Alan Middleton, who is a vice president for government relations at Scientific Games Corp. Geddings also acknowledged he hired Middleton several years ago, before Middleton worked at the company, to work on some public relations projects.

Kevin Geddings, the North Carolina Lottery Commissioner who caused some consternation because of his ties to folks in the lottery industry, has resigned.

Prior coverage here and here.

Yes, this is the same Geddings who was quoted recently as saying: "They'll have to drag my dead body out of there at this point," and "I would then look like I did something wrong, and I haven't."

In a written release, here's what Speaker Jim Black had to say about Geddings resignation this afternoon:

"I felt at the time of Kevin Geddings' appointment to the lottery commission that his past experience with the South Carolina lottery and his knowledge of lotteries in other states would be a benefit to our state's Education Lottery, but regrettably, others saw this experience in a different light. It is unfortunate that his experience and background became more of a liability than an asset, but I hope his resignation will allow the lottery commission to get back to work on the enormous task ahead of selecting a lottery staff, vendor, and retailers and ultimately ensuring we have a lottery that truly benefits our children and their education. I appreciate his initial willingness to serve and now his decision to step aside."

Black now begins a search for Geddings replacement sure to give new meaning to the phrase "no experience required." Really, at this point it's almost a requirement that whoever is picked have no experience with lotteries.

A spokeswoman for Black said he hopes to announce a pick sometime next week.

Howdy folks. I've been laid up - still am - with a bad cold. But, dang the luck, the news doesn't stop for sinus pressure and a lost voice.

Earlier in the week, Speaker Jim Black appointed Dr. James H. Woodward of Charlotte to fill the term of Kevin Geddings, the lottery commissioner who had way too many ties to the lottery industry.

Today, Senate Leader Marc Basnight has appointed a replacement for Malachi Greene, who said that he resigned due to time constraints.

Linda Carlisle is now neither the only woman nor the only person from Greensboro on the panel. From Basnight's office:

Raleigh - Senate President Pro Tempore Marc Basnight has recommended Shirley Frye of Greensboro to the North Carolina State Lottery Commission.

“The lottery commission has a great responsibility to run an ethical and open process, and to ensure that our education lottery truly benefits our schools and our students,” said Senator Basnight. “The people of our state expect the finest leadership from its commission members, and I know Shirley will provide that leadership.”

The nine-member Commission is charged with the oversight, establishment, and operation of the lottery in North Carolina.

Frye is a retired educator who has devoted over 40 years to Greensboro Public Schools and higher education. She began her career teaching 2nd grade and exceptional students before becoming a professor of special education and program coordinator at Bennett College. After a short stint with the Department of Public Instruction, Frye returned to her alma mater North Carolina A&T State University, where she was the Assistant Vice Chancellor for Development and University Relations.

Frye also worked as the Special Assistant to the President and Director of Planned Giving for Bennett College. She most recently served as the Vice President of Community Relations for WFMY News 2 in Greensboro. She received a BS in English and Education from NC A&T and her MS in Special Education and Psychology from Syracuse University.

Much of Frye’s time is dedicated to service on many boards, including the Joseph McKinley Bryan Foundation; the Glaxo SmithKline Foundation; Z Smith Reynolds Foundation and the Boards of Visitors for Guilford and Greensboro Colleges and Wake Forest University. She is also a member of the Greater Greensboro United Way, of which she chaired the Board of Directors in 2003.

Frye and her husband, former Chief Justice Henry Frye, live in Greensboro and attend Providence Baptist Church. They have two adult children.

“Frye will bring great education experience to this board and help it focus on addressing our schools’ needs,” said Basnight. “She has committed herself to public service and enhancing the lives of others in her community and is an addition to the commission we will be proud of.”

This just in from Senate Leader Marc Basnight's office:

Raleigh – Shirley Frye, who was recommended Friday by Senate leader Marc Basnight to serve on the NC State Lottery Commission, has declined to take the appointment.

Frye told Basnight earlier Friday that she would accept the nomination. However, after learning that the Greensboro law firm at which her husband is a partner represents a number of media and retail clients in the firm’s legal practice, she was concerned about the perception of conflicts of interest between the firm’s work and the commission’s.

“By declining her nomination, Shirley Frye displayed exactly the kind of strong character and moral fiber we need in those who serve our state in any capacity, particularly on our lottery commission,” Basnight said. “I appreciate her sensitivity that even the appearance of a conflict of interest could jeopardize the commission’s work.”

Frye’s husband, former Chief Justice Henry Frye, is a partner with Brooks, Pierce, McClendon, Humphrey & Leonard, which represents a number of media organizations and retail clients. Upon learning of the firm’s clients, Shirley Frye became concerned about the potential for interaction between the firm, its clients, and the lottery commission – for example, if a media organization represented by the firm made a public records request of the lottery commission, and the commission determined the information was not subject to public records law, Frye could find herself in the midst of a legal dispute between her husband’s law firm and the commission on which she served.

Shirley and Henry Frye discussed the potential for perceived conflicts late Friday before Shirley declined the nomination. Mrs. Frye felt that the lottery was far too important to risk such a perception. Because of the attorney-client privilege, Mrs. Frye was not in a position to fully know the scope of the firm’s clientele when she initially accepted the nomination.

“The Fryes’ long record of public service to our state is truly outstanding,” Basnight said, “and I especially appreciate their commitment to education and to North Carolina. Their display of integrity today comes as no surprise to anyone who knows the Fryes – in fact it reinforces for me how exceptional Shirley would have been as a lottery commission member.”

Basnight said he would continue to search for a commission appointment with the credentials and character needed to ensure that North Carolina’s education lottery is beyond reproach, and remains committed to nominating a minority to ensure diversity on the commission.

Because I was out of town last week when the lottery commission last got together, I'm going to refer you to a couple other folks for this version of lottery update:

• The Charlotte Observer reports the lottery commission may name a director on Thursday. (Registration required for that one.) It looks like the most likely candidates are folks who work at the South Carolina, Tennessee and New Mexico lotteries.

  Thursday, by the way, is the lottery commission's next scheduled meeting.

• I commend this lottery-related column by the AP's Steve Hartsoe to you, which gives you a sense of the director search and the frustration from the NC game's rough going.

If you're interested in knowing more about what the lottery commission is looking for in their new director, you might want to check out the job description.

For anyone keeping track, it seems as if we've lost our third of the original nine lottery members. From Speaker Jim Black's office:

N.C. House Speaker Jim Black (D-Mecklenburg) today made the following statement in response to the resignation by Lottery Commissioner Gordon Myers. Myers was appointed to the lottery commission by Black to fill the position that required retail experience. Black hopes to announce a new commission appointee in the near future.

"I am saddened to learn that Gordon Myers has decided to resign from the lottery commission," Speaker Black said. "Gordon is a well respected business leader, who brought a wealth of retail and business experience to the lottery commission, which was not only required by law, but much-needed as the commission works to set-up the new Education Lottery in North Carolina."

Meyers was a former executive with Ingles Market and still has a financial stake in the company. The chain may decide it wants to sell lottery tickets, thus presenting a potential conflict for Meyers.

From the Associated Press story issued this afternoon:

Ingles said it became apparent to him at last week's commission meeting that "approving retail locations for lottery ticket sales will be controversial." Each lottery ticket outlet will receive 7 percent of the revenues from each ticket the outlet sells.

Yes, this means that both of Black's original appointments are now off the commission. Sen. leader Marc Basnight is still trying to fill one of his appointments.

The only guy who has - so far - managed to keep all of his original appointments on board: Gov. Mike Easley.

The NC Lottery Commission named Tom Shaheen, currently New Mexico's lottery boss, to start up the Tar Heel game.

Shaheen is 52, married, with two children in their 20s. A Detroit native, he has worked for lotteries in Florida, Georgia and Texas. Shaheen also said he is an Atlanta Braves fan.

More to come in tomorrow's paper.

From our friends at the Associated Press:

RALEIGH, N.C. (AP) — North Carolina's first lottery director says he will start at his new job during the first week of December, when the clock will begin to meet a four-month deadline to get the games started.

Let's hope this one sticks.

From Sen. Marc Basnight’s office:

Senate President Pro Tempore Marc Basnight has recommended Bridget-Anne Hampden of Charlotte to the North Carolina State Lottery Commission.

“The importance of the lottery commission in ensuring that our education lottery truly benefits our schools and our students is evident,” said Senator Basnight. “Bridget-Anne will contribute strong leadership to the recognition of that goal.”

I'll post the rest of the release after the jump. But for those of you keeping score at home, this brings the commission up to eight members. House Speaker Jim Black still needs to appoint a replacement for Gordon Meyers, who resigned earlier this month.

Update:Click here for the story from today’s paper.

This post has to do with the Lottery Commission and obedience – some my scornfully say obeisance – to the letter of the law; specifically the North Carolina Open Meetings statute.

I've been told today that I’m making much ado about nothing, so if you read on after the jump I'd love some feed back.

Good Sunday morning. Here are a few updates from the world of state government. First from me:

• There is this story on local Democratic House members saying they still support Speaker Jim Black, despite his recent publicity problems. And let’s be real: as the story details, there’s so much of a paper trail between Black and local Democratic pols that they couldn’t really hide their ties even if they wanted.
• And the folks at ALE, the agency responsible for enforcing the lottery laws on retailers, say they can't hire all the folks they think they'll need to do the job by April 5, when the game is supposed to get going.

But wait there's more from our friends at the state's other newspapers:

• Raleigh's N+O had this story about retired pols using their left over campaign accounts for, um, non-political expenses.(Registration required if you haven't already.) It leads with former Guilford County legislator Joanne Bowie who bought herself a new car and new computer with the proceeds. Find the actual campaign finance report by clicking here.(PDF) (She also paid some taxes and invested some in a retirement account.)
• Okay, it's not from this weekend, but this Charlotte Observer story about a planned protest against Black in Ashville by former Democrats is interesting anyway.(Yeah, registration required there too.)

And finally, if you're a fan of our Inside Scoop column that runs in the newspaper, you'll want to know it's moving.

See you back here on Monday.

A few points of update on the NC Lottery:

• The Lottery Commission met this morning (12/15). The only substantail action it took was to give Director Tom Shaheen permission to publish RFPs for its online gaming and instant ticket sales systems on Monday. Online gaming is the term of art for the system that lets you go into convenience store and pick numbers on a ticket, rather than just going and buying a scratch-off card.
• The NC Institute for Constitutional Law is expected to announce it has sued the state over the lottery law this afternoon. They will complain that the process by which the law came to pass circumvented constitutional safeguards. When asked if the lawsuit would affect the start up of the game, Lottery Commission Chairman Charles Sanders said, "That's not our department." Sanders said the lottery would plow ahead toward its April 5 start-date unless it has some reason (like an injunction) to stop.
• And in case you didn't see it, the lottery has hired a security director.

This e-mail just went out from the NC Institute for Constitutional Law:

Robert F.Orr, Executive Director of the North Carolina Institute for Constitutional Law (NCICL), announced today that NCICL, representing four individuals and two organizations, has filed a legal challenge to the Lottery Act.

If I'm not mistaken, an appointment made today by Speaker Jim Black means the Lottery Commission is up to its full strength of nine members. From the Speaker's office:

RALEIGH -- N.C. House Speaker Jim Black (D-Mecklenburg) today appointed Max O. Cogburn, Jr. of Asheville to the North Carolina Lottery Commission. Cogburn is an owner of the Pisgah View Ranch in Candler and is a former United States Magistrate Judge for the Western District of North Carolina.

North Carolina's lottery is slated to join the collective that runs PowerBall, a big multi-state lottery game. Lottery officials voted to join the game this afternoon. Powerball sales in North Carolina could begin the first week in July.

That and other news from Monday's lottery commission meetings in tomorrow's paper.

Update: In case you're interested, Lottery Director Tom Shaheen has picked up some more elves for his workshop, including an HR director and lobbyist. Click here for a list of his latest hires.(MS Word)

A few updates on lottery-related items:

• There is my story from today's paper that talks about confusion over who will enforce lottery rules, at least to begin with. The lottery law seems straight forward to some, but the folks on the lottery commission seem to think there is some wiggle room in the law.
• If you're aiming to land a lottery contract, or are just curious about them, you can check out the RFPs for instant tickets and for online games. Both of those are PDF files. At least one vendor is complaining about the RFP structure, according to our friends at the N+O.
• And finally, folks, I'm not hiring and I'm not issuing contracts. If you're trying to land a job or want to sell something to the lottery click here or call here: (919) 715-6886.

For those of you who missed it, I had a story in Sunday's paper about the the state auditor's office and the governor's folks having a discussion over how to track lottery proceeds.

Basically, Auditor Les Merritt, a Republican, was asking Easley's folks to agree on a method for determining how much - if at all - lottery proceeds benefited education.

Easley, a Democrat, wrote back to Merritt and said, in essence, don't worry yourself about this. It'll be real obvious whether lottery money is boosting our education spending or not.

Merritt wrote back to say that he thought it was just dandy that Easley planned to put all the money in education but that he was still worried that in a year or two it may be real difficult to tell one way or the other.

Let's acknowledge up front that because Merritt is a Republican and Easley is a Democrat there some ready-made political tension here. (Privately, at least one of Easley's folks suggested to me that this must just be some sort of political grandstanding by the auditor. The auditors folks say no, that Merritt is genuine in his interest here.) And not being an accountant, I don't know if the level of detail Merritt's folks are after is really necessary or the answer is really as simple as Easley claims.

Merritt is asking for details of specific education programs that will get lottery funding. His stated worry is that programs that receive both lottery and tax dollars could confuse the issue down the line.

Easley's camp argues that you simply need to look at the over-all level of state spending going into education programs. That, plus that fact that the lottery proceeds will be going to new or relatively new programs should make the lottery dollars' easy to track, the governor argues.

Here's the rub: As I reported back last month, one of the biggest gripes about lottery is that years down the road is that lottery money really doesn't end up boosting education in the long run.

So here's Merritt realizing that this will be a question he'll be asked next year or the year after or maybe the year after that and essentially saying, "hey guys, let's come up with an agreed upon way to calculate the answer."

Even if the way he wants to go about it is backwards and too much on a micro-level - as Easley's folks contend - maybe that's not a horrible suggestion. Maybe the answer can be as simple as Easley's folks say, but if everyone agrees up front how to do the calculation than no one can complain down the line that one side or the other is doing some "new math" to get the answer they want.

Of course, my inner-skeptic says it’s more useful politically for Democrats and Republicans alike, lottery supporters and opponents of all different political stripes, to have the issue a bit clouded. All sides then can down the line say "See. See! See!! We were right," using whatever evidence they want to make whatever case they want.

Yesterday (Thursday), charter school advocates held a bunch of news conferences throughout the state to lobby for a share of lottery proceeds. There wasn't one in Greensboro, but I managed a fairly local story out of this anyway.

Read that here.

The one thing that rang in my head as I listened to the charter school folks was they kept saying it must have been an oversight for them to be left out of the lottery bill.

I don't think so.

I talked to about five or six legislators yesterday, none of who could remember charter schools coming up very much.

And Sen. Tony Rand, one of the bill's architects, said pretty emphatically that charters weren't envisioned as direct beneficiaries of the lottery.

The political context here is that charters are a favorite topic for Republicans and it was Democrats who passed the lottery bill. (For those of you not from NC, Dems control both chambers of the General Assembly and a Dem is in the governor's office.) It isn't surprising, therefore, that charters weren't part of the lottery equation.

The silver lining for charters is this: if lottery dollars do drive up per-pupil spending in local school districts, charters will benefit anyway. That's because charter school funding is based on the amount per pupil their surrounding district spends.

The glass half-empty crowd will point out that there's bound to be some unusual shuffling of money surrounding the lottery. If that shuffling ends up decreasing the per-pupil calculation even while school funding goes up -- it sounds wacky but I don't doubt it's possible -- then charters would suffer.

For more on charter schools:

• Click here for the state DPI charter school page. (It's the right address but is behaving oddly this morning if you have problems.)
  
• The League of Charter Schools can be found here. They seem to be the parent group of the campaign for more lottery dollars.
  
• Mentioned in my story was the Guilford Preparatory Academy. It's one of four charters in Guilford County, three of which are in Greensboro. The other is in High Point.

So the NC Lottery Commission has selected GTECH to run the state games. (The AP's early take on this here. More in tomorrow's paper.)

Left out was Scientific Games, the company that helped spark Jim Black's troubles.

Among other goodies, released to us scrubby media types today was a cardboard-box chock full of bid documents from both GTECH and Scientific Games. (I should mention here that OGT, which will work as a sub-contractor to GTECH.)

My favorite bit so far is a statement form Scientific Games saying they didn't know anything squirrelly was going on.
Highlights include:

• Several emphatic uses of the phrase "now-former" to describe Alan Middleton, the company's former Vice President for Government Affairs. As in "There, too, our now-former employee told us that he was not aware of Mr. Geddings failure to provide written disclosure of his engagement by us."
• Regrets? They've had a few. "We regret the controversy caused by the efforts of three individuals formerly associated with the company."
• But hey, they're just looking out for us: "During 2005, like many other businesses and individuals interested in the outcome, we worked with legislators to encourage the passage of North Carolina’s lottery enabling legislation. We specifically suggested that the legislature strengthen sections concerning vendors compliance activities and to encourage the Commission to consider the ability of its vendors to increase funding for education as an important element while reviewing bids."

I'm sitting at my desk scratching my head right now. There's an AP story moving apparently based on an N+O story that itself looks to be inspired by an Independent Weekly story about how there’s some concern that it will difficult or impossible to show that lottery proceeds are being used for education as promised.

Readers here got a jump start on the big news last month.

I wrote a story and blogged about this very debate between the state auditor’s office and Easley’s office. (I guess its, um, more newsy now or something.)

The point of contention is this: some of the lottery proceeds will go to pay for programs that are already up and running, like pre-K. This smacks of the dreaded “supplanting” (read more on that here and here) where lottery proceeds don’t bolster education as promised, but simply become part of the mélange that is the state’s general budget.

Here’s the shade of grey introduced by the governor’s folks though: The money that is freed up by the lottery funds will go toward paying for other education needs, such as boosting teacher salaries.

Skeptics (like State Auditor Les Merritt) say that kind of shifting around is hard to track and it will be virtually impossible to tell where the money has gone.

That argument is fair enough. The counterpoint offered by the governor’s folks is you just have to watch over-all education spending rise to tell if the lottery dollars are doing their job. Frankly, I’m not sure either one is completely right. I don’t know if Merritt needs ALL the detail he’s seeking, but I’m not sure that we can skip happily along just looking at the 10,000-foot view of the budget secure in thinking that no one is playing Three Card Monte with the lottery dollars.

I do think it’s too early to use the headline that I’ve seen a lot this morning, “Lottery not just for schools.” If the lottery proceeds are being used to boost over-all education spending over and above what it would have been, well that seems to me to meet the intent of the lottery law.

The big question is this: how can we be sure that’s happening? More to come on this from the folks up here in Raleigh, but as always you can have your say right now in the comments section below.

Two more lottery-related stories:

• Charlotte’s Sharif Durhams reports on how officials want to promote the lottery, but not too much.
  
• The bottom line from the Associated Press on a hearing Monday concerning a lawsuit to stop the lottery:

A Wake County judge says he will decide by the end of the week whether to dismiss a lawsuit to block the new North Carolina lottery from moving forward. He could also grant a temporary ban on its work.

My story today dips into the renewed buzz surrounding the supplanting debate over the lottery.

The bullet is this: Easley's folks want to pull some tax money out of a couple education programs and use it elsewhere in next year's education budget. They will replace the money they move out of pre-K and class size reduction efforts with lottery proceeds.

They argue: that as long as the education budget increases over all, the lottery funds are not supplanting.

Supplanting is a term lottery opponents have used to describe what happens when additional money generated by the lottery displaces tax dollars rather than boost spending for education.

Critics argue: that what Easley is doing is the very definition of supplanting.

Some remainders that didn't make the story:

From Paul Luebke, a Durham Democrat and UNCG prof.: Luebke voted against the lottery but is now in the curious position of being a finance chairman in the House where he'll have a say on how the lottery money is processed through the budget.

Luebke takes the strictest possible view on supplanting, saying that lottery dollars should not push tax dollars out of any program they're going to now.

He predicts that more folks in the House might share this view, where the lottery passed by just one vote. The folks in the other chamber, he speculated, might be more flexible.

"My impression is that the Senate is more comfortable with supplanting," Luebke said.

If the House and Senate can't agree on what exactly constitutes supplanting or whether they'll do it or not, it could make for a long short session beginning in May.

Speaking of the Senate...

Sen. Kay Hagan, a Greensboro Democrat, was getting ready to throw a big dinner party when I talked to her yesterday. Her quotes on the topic:

"It is my strong feeling that any lottery money should be new, additional money for education," Hagan said. "I think it needs to be new money, laid out in accordance with the language that's in the lottery bill."

So how does she feel about the supplanting issue? Yeah, I'm not sure either. Looking at my notes, she's left herself a lot of wiggle room.

My sense is she'll make sure the lottery money stays in education but may be more flexible than Luebke.

Fellow Senator Phil Berger...

...expects there to be supplanting. He's a lottery opponent who is a glass-half-empty kind of guy on all things lottery, including how the money will be spent.

"I think this is what folks were saying all along would be the net result," Berger said. "It's just additional money for the government that will free up money that's currently going to education for other things."

Berger points out that the original version of the Senate budget would have used lottery money to replace construction money that already goes to school districts. Currently, part of the money raised by the corporate income tax goes to counties.

The lottery law creates a new program that provides construction aid to counties.

However, Berger believes that what Easley is proposing is only step one down the supplanting path. He expects step two to be a merging of the two school construction programs.

It'll be interesting to see if that plays out. Cutting the corporate income tax has been a big priority for the governor and the Senate, not so much for the House. In fact, the House pretty much nixed a cut to the corporate rate last year because the budget did nothing to reduce the taxes they saw as a priority: sales tax and personal income.

Using lottery dollars to replace -- yes, supplant -- money from that tax would allow budget writers to cut (slightly) the corporate rate without imposing more sales or income taxes or cutting programs.

Berger may just be on to something.

And just to round things out, the full statement Gov. Mike Easley issued yesterday reads:

Education lottery money will supplement, not supplant existing spending for education and I will not recommend nor sign legislation that reduces the state’s spending for education.

Since 2001, when we began pre-k and class size reduction efforts, I have consistently said that once an education lottery was enacted, we would use the proceeds to fund these priorities permanently. The lottery will always be the source of funding for these programs in good and tough economic times. In addition, the education lottery funds college scholarships and school construction as provided by law.

Okay...discuss among yourselves.

I'm just back from the Superior Court hearing on whether the lottery was passed in a constitutional manner.

Basically, the oral arguments were a good summary of the case.

Former Supreme Court Judge Robert Orr, arguing for the NC Institute for Constitutional Law, told the court:

• The lottery is a tax, a revenue raising bill, as defined by the state constitution.
• Such bills need to be heard, voted upon, and have their votes recorded on three separate days.
• Neither the reading on three separate days nor the recording of votes happened.
• The court should declare the law unconstitutional.

Best quotes:

• "If this is an education lottery, I would submit to you this 35-cents is the education tax," referring to the 35-cents on the dollar from lottery tickets that supposed to go towards education.
  
• "A ruling that the lottery act is not constitutional does not mean North Carolina will never have a lottery," suggesting that the General Assembly could hold a special session and pass it again.

Norma Harrell, a Special Deputy Attorney General for the state, said:

• The lottery is not a tax. Playing is voluntary.
  
• Since it's not a tax, the three day provision doesn't apply.
  
• And, oh yeah, Orr and company waited too long to bring the suit.

Best quotes:

• "A tax is a forced contribution to government. No one is force to contribute here...you don't have to buy a lottery ticket."
  
• "There's no tax here, it's just a charge for purchasing a ticket."

Judge Henry Hight said that he would decide the case by the end of the week.

Meanwhile, Lottery Director Tom Shaheen, who watched the festivities in court, said after the hearing that his crew would continue pushing forward with work to get things up and running by March 30.

Stay tuned.

In case you haven’t heard, the judge in the case seeking to stop the lottery has chucked out the lawsuit.

I heard that news as I say in the State Board of Election hearings regarding House Speaker Jim Black and possible violations of campaign finance laws.

The thrust of this morning’s case revolved around folks from Rockingham County (the city not the county) involved in the video poker business. Specifically, the board appeared to be trying to determine if people were recruited to allow their names to be used on campaign donation forms and checks even if they weren’t actually the ones making those donations.

In a few instances, it was apparent that board members thought they were being lied to.

“I’m going to ask you not to let that table become the liar’s table. Coincidences don’t just keep happening,” elections board chairman Larry Leak said to one witness who was frustrating him.

No sign of Steve Wood yet, but it’s early in the afternoon.

At 2:12 p.m., the hearings have picked back up, and I’m tuning back in.

Update: The days hearings ended without any current or former legislators being called to testify. I'm writing a story for tomorrow's paper with at least some of the details from today.

I've fielded several requests for a listing of who is selling lottery tickets. Here are couple different lists that may help:

• Click here for a partial list of lottery retailers, including those in Alamance, Davidson, Forsyth, Guilford, Randolph and Rockingham Counties. (This is a Microsoft Excel file.) This list includes only those counties and only those retailers who were approved for sales as of the date I got this data. A few more may have been added since, but this is probably the best I can do for a listing of who will be selling on opening day.
• If you can't read the Excel table, here's the same file in MS Word, with a few bits of data scrubbed out to make if format nice.
• If you really want to dive into all this, click here for a list of all retailers that have applied. (Microsoft Excel file) This is the whole state and the listing includes both people who have been authorized to sell and those who have not.

WARNING:These aren't huge files in the grand scheme of things, but if you're running dial-up, they'll take you a while to download.

By the way, if you're looking for the lottery's own home page, you can find that by clicking here.

Remember the lottery lawsuit? You know, the one a superior court judge chucked not too long ago?

Well, that decision is being appealed. From my e-mail to your eyeballs:

NOTICE OF APPEAL IN LOTTERY CASE FILED

RALEIGH - The N.C. Institute for Constitutional Law, at the request of the Plaintiffs and with approval of its Board of Directors, has today filed a Notice of Appeal to the N.C. Court of Appeals from the Orders entered by Judge Henry Hight in the Lottery Act litigation. We anticipate that the N.C. Justice Center on behalf of the Plaintiffs/Intervenors may file a separate Notice of Appeal later this week. As soon as the Record on Appeal is filed, it is anticipated that a Petition for Discretionary Review will be filed on behalf of the Plaintiffs and Plaintiffs/Intervenors with the N.C. Supreme Court requesting the Court to take the case and bypass the Court of Appeals as well as to expedite the briefing and argument schedule.

“As we have indicated from the beginning of this litigation, we feel that there are vitally important constitutional questions relating to the passage of the N.C. Lottery Act that need to be resolved with finality by our state’s highest court.” said NCICL’s Executive Director Robert Orr. “With the lottery beginning in N.C. this week, the need for the quickest possible resolution of these issues is imperative. Millions of dollars will have been taken in by the state and debts incurred by the state to pay winners, while the appeal process moves forward. The constitutional issues involved not only affect the Lottery Act but potentially impact legislative enactments in the future.” he added.

“While disappointed in the Trial Court’s decision, we still feel strongly about the merits of our constitutional arguments and look forward to presenting them at the appellate level.” Orr said.

So it turns out there's a game or gambling thingy starting tomorrow (Thursday) here in North Carolina.

In case you didn't see prior posts on the topic, here are links to Excel files listing where people will be selling lottery tickets in:

(For those who can't get at an Excel file, click here for an MS Word file of retailers in Guilford County.)

• Alamance County.
• Forsyth County.
• Guilford County.
• Randolph County.
• Rockingham County.
• the whole state.

Please note, thoses lists are subject to change, but they're about as current as they get as of this afternoon.

If you spot something interesting going on with the lottery as it starts up, drop me a line: mbinker@news-record.com

So the lottery started and North Carolina hasn’t slid into the ocean yet or anything.

Here’s a link to our early morning coverage of the lottery opening. (Link subject to expiring due to the ongoing server transition.)

Meanwhile, Sen. Phil Berger of Eden says:

For some time now the Education Union (North Carolina Association of Educators), Governor Easley, and the Democratic Legislative Leadership have sold the idea of a Lottery to North Carolinians as a panacea that will cure all of the problems facing our public education system. March 30th is the first day of what represents the fruits of their labor, and time will tell whether the lottery will live up to the expectations which have been created.

North Carolina's public education system has high dropout rates, poor test scores, low teacher pay, and all too often inadequately prepares students for the 21st century economy.

It is my great hope that the start of the lottery will finally force the Governor and the Democrat controlled General Assembly to shift their focus from gimmicks and inflated promises to real solutions to the substantial problems facing North Carolina's public education system.

As always, the comment link is open.

Update: Your odds of winning? Well, I'm told by weather folks that your chance of getting hit by lightening is 1 in 3 million on average, so you're still doing better than that if you're aiming for the $100,000.

You may have read how the state lottery made $24 million during its first five days of sales.

Bully for the lottery.

So late today, I get news alert from the lottery folks that reads in part:

"...sales of the tickets are going very well with the $5 ticket, "$100,000 Carolina Cash," a top seller."

Really?

Well, it depends on how you look at it. The lottery put out these (approximate) figures:

Game/sales
$100,000 Carolina Cash ($5 ticket)/$7,486,961
Blackjack ($2 ticket)/$5,758,655
Tic Tac Toe ($1 ticket)/$5,137,201
NC Education Lottery ($1 ticket)/$5,647,481

So yes, the most cash was generated by the Carolina Cash game. But what game sold the most number of tickets?

That would be the "NC Education Lottery" game which lottery officials said sold 5.6 million tickets at $1 a pop. The Carolina Cash game sold something like 1.49 million tickets at $5 a pop.

I say "something like," because there's another math problem with the amounts handed out by the lottery.

If you sell tickets with a face value of $5 a ticket, your sales totals should all end in "5" or "0," numbers that are multiples of 5. There's no way to multiply 5 by a whole number and get "$7,486,961." So unless there's some sort of discount program, some way to buy a fractional ticket, or something else we don't know about...something is amiss.

Also, the sales figures for the $2 "Blackjack" tickets should all be even numbers. If you multiply "$2" by any number - odd or even - you get an even number. There's not way, without fractions, to sell "$5,758,655" worth of $2 tickets.

Yes, I have an e-mail requesting clarification into the lottery. And yes, I realize that these figures are supposed to be estimates, but they should at least be plausible.

In the mean time, I'm taking all the sales figures given out by the lottery with a big ol' grain of salt.

Update: Here's the response I got from Pam Walker, the spokeswoman for the lottery:

The only way we can extract the data is to take a snapshot at time requested. I asked for the info today, but got response in percentages for each game. I divided the number for sales as of the end of the day yesterday and got the APPROXIMATE numbers.

In case you missed it, this is my story detailing how Scientific Games, the company that helped cause some of Jim Black’s problems, will probably get a cut of North Carolina’s lottery business despite not actually being awarded a contract or anything.

From our friends at the Associated Press:

RALEIGH, N.C. (AP) — A federal grand jury indicted former lottery commissioner Kevin Geddings on fraud charges Thursday, saying he tried to deceive the state of North Carolina by failing to disclose that he had worked for a leading supplier of scratch-off lottery tickets.

The U.S. Attorney's in Raleigh said Geddings, a former chief of staff to South Carolina Gov. Jim Hodges, faces five counts of mail fraud and four counts of wire fraud.

Prosecutors said Scientific Games Corp. paid Geddings nearly $230,000 from 2001 to 2005, but that Geddings never disclosed his financial ties to the company as required when he filled out a state financial disclosure form.

Geddings resigned from the newly formed commission Nov. 1, just before his relationship to the company was revealed.

The 42-page indictment alleges that Geddings concealed his work for the company because he knew it would disqualify him for a seat on the lottery commission.

For more on Geddings click here.

Not to put too fine a point on it, but I don't think many folks around Raleigh are going to be shocked or saddened if this guy eventually has to head off to the pokey. In addition to helping spark House Speaker Jim Black's troubles, the guy seems to have flat out lied to a lot of folks - including me - and according to the indictment his financial disclosure form was a work of fiction.

Speaking of Black, here’s a statement from his office regarding the indictment:

"Speaker Black, just like everyone else, was surprised to learn about the depth of Kevin Geddings' on-going business relationship with Scientific Games," said Julie Robinson, spokesperson for House Speaker Jim Black (D-Mecklenburg). "Had the Speaker known the details and exact timing of his relationship with the lottery company, he would never have appointed him to the new lottery commission."

As always, the comment lines are open.

From our friends at AP:

RALEIGH (AP) — A former political director for House Speaker Jim Black is one of three former lottery company workers who have been charged with violating state lobbying laws, according to court documents released Monday.

Meredith Norris worked on staff in Black's office from 1999-2002, but quit to work as a lobbyist while staying with his campaign as a volunteer until late last summer. After a seven-month investigation, Wake County prosecutors have also charged former lottery commissioner Kevin Geddings, along with former Scientific Games International vice president Edward Alan Middleton, for failing to register as lobbyists last year with the Secretary of State's office.

Click here for the full story.

In case you didn’t see this story, more lottery games are on the way. The state will start it’s own Pick-3 and Pick-5 games in October.

From Gov. Mike Easley's office:

RALEIGH – Gov. Mike Easley today appointed John McArthur of Cary as chair and Bryan Beatty of Raleigh to the N.C. Lottery Commission.

McArthur takes the place of Charles Sanders, who has stepped down after heading up the lottery commission for its inaugural year. More from the release, after the jump:

Political hacks of all stripes are buzzing about the big Kevin Geddings trial today.

AP: The grand jury indictment charges Geddings with misleading the state, fellow lottery commission members and others about his financial relationship with Scientific Games Corp. and his lottery work in other states.