Winners and Losers

Lottery operator Gtech was especially kind to the political friends of Texas Comptroller John Sharp. But when supervision of the company was moved from Sharp's office, the party was over.

The "war room" that had been set up in an upper floor suite of Austin's Doubletree Hotel was abuzz when Tom Logans arrived there in the spring of 1992. A pencil-thin black man who had moved to Houston from San Diego in the boom years of the early '80s, Logans was in Austin for an orientation session for a new job he'd recently taken.

All of the frenetic activity at the Doubletree was in the service of getting the recently authorized Texas lottery under way. Gtech, a Rhode Island-based corporation that a few months earlier had won the contract with the state to run the new games of chance, had hired Logans as its sales manager for its Houston district. He was one of the 500 new employees that Gtech would bring aboard as it rushed to build a massive operation that could begin selling lottery tickets to Texans within 60 days. After he arrived for his Gtech orientation, Logans, who had no experience in either lottery management or politics, observed that many of the job slots were being filled by people with skills in one of those particular areas.

"As you walked in there were white sheets [on the walls] all around the room labeled Abilene, Houston, Lubbock, whatever," recalls Logans, now 51. "On those lists everybody who was hired for a district was named. The ones that were written in green were the political hires. That's how we came up with the term 'greenies.' There were plenty of greenies there, I'll tell you."

Most of those Democratic activists and operatives hired by Gtech, say Logans and other former Gtech employees, were people recommended or pushed by state Comptroller John Sharp, the official initially responsible for supervising Gtech's conformance with the state contract. According to Logans, who was later fired by Gtech and is now suing the corporation, it was clear from the beginning that Gtech thought that hiring the comptroller's political friends was part of the price of doing business in Texas.

Ex-employees place the number of Gtech personnel who were hired solely because of their political connections from "dozens" upward to 100 -- and that's aside from the 100 or so hires made by the Texas Lottery Commission, the state's end of lottery operations headed by Nora Linares, a former legislative aide to Sharp.

Recommending friends for jobs has surely been a perquisite of politicians ever since humans invented government, but in this case the hires were made by a company subject to regulation by the office of the elected official doing the recommending. And some former Gtech employees are now claiming that at least a few of the political operatives hired by Gtech did nothing for their paychecks, and that the larding of the company's Texas payroll with political operatives cost both Gtech and the state in lost revenue.

During several of Gtech's early orientation sessions, Logans encountered Bill Glen, the corporation's human resources chief out of Rhode Island. Glen, according to Logans, fumed about having to hire so many people because they had been recommended by Texas politicians. He made no effort to hide his disgust.

"He said that Texas was the worst he had ever been in," recounts Logans. "That in other states they'd had to do this kind of thing but never had it been like this. That the numbers were outrageous. That Texas had more political hires than any other state they'd ever had to deal with." In addition to Sharp's, the other name Logans recalls hearing most frequently in connection with the political hires was that of Ben Barnes.

Barnes is the former Texas lieutenant governor and heavyweight Capitol lobbyist whose political career evaporated when he became entangled in the Sharpstown scandal 25 years ago. Gtech hired Barnes and his partner Ricky Knox to help it win one of the largest contracts the state of Texas ever signed with a private company. In return, their contracts entitled them to 4 percent of the company's Texas revenues, minus some expenses, as long as Gtech holds the contract.

Both Barnes' daughter Amy and his former executive secretary were enlisted in the new Gtech brigade. With the help of Barnes (who did not respond to a request for an interview for this story) and the approval of a Sharp-supervised evaluation team, Gtech beat out a single rival, Minneapolis-based Control Data. The pact guaranteed the company nearly a quarter of a billion dollars by 1997 for launching and running the biggest lottery operation it had yet attempted.

And by almost any accounting, the Texas lottery has been a smashing success. From day one, in late May 1992, when the lottery sold 23 million tickets, to last year, when it grossed more than $2 billion and generated nearly $900 million in state revenue, what was a hot political potato in the abstract has become a real live golden goose that few lawmakers want to tinker with. Because Texans bit so greedily into the lottery apple so quickly, and the revenues exceeded expectations, few have questioned the management of the lottery or the hiring methods of those who operate and supervise it. Only now, as some of the political hires made in the spring of 1992 have been either fired or laid off, have critics begun to emerge.

Next Page »
My Voice Nation Help
Houston Concert Tickets