By Corte H.C.R. No. 153 76R9480 MDR-F HOUSE CONCURRENT RESOLUTION 1-1 WHEREAS, Lawrence Littwin alleges that: 1-2 (1) the Texas Lottery Commission hired Lawrence 1-3 Littwin in June 1997 to fill the position of executive director, 1-4 with an annual salary of $100,000; 1-5 (2) Mr. Littwin served as executive director until 1-6 October 1997 when he was wrongfully terminated; 1-7 (3) the Texas Legislature enacted the state lottery 1-8 act in 1992, which established the state lottery system in Texas; 1-9 (4) the operation of the lottery was privatized and 1-10 the Texas Lottery Commission was created to oversee the private 1-11 vendors that operate the state's lottery, and various safeguards 1-12 were provided to ensure that privatization would not lead to 1-13 corruption; 1-14 (5) the Texas Lottery Commission contracted with GTech 1-15 Corporation and GTech Corporation has operated the state's lottery 1-16 since 1992; 1-17 (6) Lora Linares, the first executive director of the 1-18 Texas Lottery Commission, was responsible for the oversight of the 1-19 operation of the lottery; 1-20 (7) under Ms. Linares's administration, GTech 1-21 Corporation engaged in questionable business practices that 1-22 included putting Ms. Linares's boyfriend on GTech Corporation's 1-23 payroll, making gifts and other contributions to Ms. Linares, 1-24 hiring former state officials as lobbyists with excessive control, 2-1 repeatedly violating the contract with the state, and failing to 2-2 provide the state with sufficient data to oversee GTech 2-3 Corporation's operations; 2-4 (8) the Texas Lottery Commission fired Ms. Linares and 2-5 voted to put the lottery operator contract up for rebid in March 2-6 1997; 2-7 (9) GTech Corporation's contract allowed the Texas 2-8 Lottery Commission to terminate the contract with 30 days' notice 2-9 for any reason and if GTech Corporation was not awarded the 2-10 contract under the new request for proposal, GTech Corporation's 2-11 contract could be terminated; 2-12 (10) the request for proposal was designed so that it 2-13 would be considered "above reproach" and the bid would be given 2-14 objectively to the lowest qualified bidder; 2-15 (11) GTech Corporation was not the successful bidder 2-16 under the request for proposal; 2-17 (12) in June 1997, Mr. Littwin was hired from 2-18 approximately 700 applicants to replace Ms. Linares as executive 2-19 director; 2-20 (13) Harriet Miers, chair of the Texas Lottery 2-21 Commission, said of Mr. Littwin, "his extensive business, 2-22 technical and lottery experience, his knowledge of lottery products 2-23 offered by vendors, and his knowledge of the procurement process 2-24 will be of great benefit . . . . He is a man of integrity who will 2-25 further develop and maintain strict controls at the commission and 2-26 insure operations that are above reproach"; 2-27 (14) Mr. Littwin's duties included oversight of the 3-1 rebidding of the multimillion dollar lottery operator contract, 3-2 oversight of the issuance of the request for proposal in an effort 3-3 to solicit bids for the lottery operator contract, and the exercise 3-4 of strict control and close supervision over GTech Corporation to 3-5 ensure integrity, security, honesty, and fairness in the operation 3-6 and administration of the lottery; 3-7 (15) when Mr. Littwin first began his new position, 3-8 the state auditor provided Mr. Littwin with a highly critical 3-9 review of the Texas Lottery Commission, GTech Corporation, and the 3-10 relationship between the two; 3-11 (16) the state auditor warned Mr. Littwin that GTech 3-12 Corporation had not provided complete and timely responses to the 3-13 state auditor's request for information and denied the state 3-14 auditor access to information concerning its contracting practices; 3-15 (17) based upon the state auditor's report and 3-16 Mr. Littwin's review of the current state of affairs, Mr. Littwin 3-17 realized that the Texas Lottery Commission had not conducted 3-18 necessary audits of GTech Corporation as required by law and Mr. 3-19 Littwin entered into a contract with Deloitte and Touche to perform 3-20 the necessary audits; 3-21 (18) Mr. Littwin also instructed staff members to 3-22 review the GTech Corporation contract to determine whether GTech 3-23 Corporation had complied with all of the contract obligations; 3-24 (19) from the staff members' preliminary 3-25 investigation, it appeared that GTech Corporation had seriously 3-26 violated the contract and that the violations gave rise to millions 3-27 of dollars in liquidated damages; 4-1 (20) Mr. Littwin made the Texas Lottery Commission 4-2 aware of these issues; 4-3 (21) Mr. Littwin continued a previously initiated 4-4 investigation into, among other things, alleged unlawful campaign 4-5 contributions made by GTech Corporation, through various 4-6 subterfuges, in violation of the contract; 4-7 (22) ultimately, Mr. Littwin was instructed by Harriet 4-8 Miers, John Hill, and Anthony Sadberry, members of the Texas 4-9 Lottery Commission, to stop the investigation; 4-10 (23) the investigation was never completed; 4-11 (24) the Texas Lottery Commission did not take any 4-12 action and to the best of Mr. Littwin's information and belief, 4-13 GTech Corporation has never been forced to cure these breaches or 4-14 pay these penalties; 4-15 (25) Mr. Littwin was terminated on October 29, 1997, 4-16 only five months after Mr. Littwin had been hired; 4-17 (26) the commission members did not provide a reason 4-18 for his dismissal other than to say they had "lost confidence" in 4-19 him; 4-20 (27) Mr. Littwin's personnel files list the reason for 4-21 his termination as "reasons unknown" and none of the commission 4-22 members would explain what that actually meant; 4-23 (28) following Mr. Littwin's dismissal, Linda Cloud 4-24 was named executive director of the commission; 4-25 (29) Ms. Cloud quietly canceled the request for 4-26 proposal, leaving the contract with GTech Corporation despite the 4-27 fact that GTech Corporation was not the successful bidder; 5-1 (30) the audit of GTech Corporation that Mr. Littwin 5-2 contracted for was never performed; 5-3 (31) the Texas Lottery Commission never forced GTech 5-4 Corporation to pay the liquidated damages under the contract; 5-5 (32) the investigation of illegal contributions to 5-6 state officials has never been completed; 5-7 (33) a report prepared and completed by Mr. Littwin 5-8 discussing material problems with the Texas Lottery Commission was 5-9 never disclosed to the public; and 5-10 (34) Mr. Littwin's termination did not come as a 5-11 result of poor job performance, but rather, his attempts to uphold 5-12 the laws of the state and eradicate inappropriate activities by the 5-13 Texas Lottery Commission and GTech Corporation; now, therefore, be 5-14 it 5-15 RESOLVED by the Legislature of the State of Texas, That 5-16 Lawrence Littwin is granted permission to sue the State of Texas 5-17 and Texas Lottery Commission subject to Chapter 107, Civil Practice 5-18 and Remedies Code; and, be it further 5-19 RESOLVED, That the executive director of the Texas Lottery 5-20 Commission be served process as provided by Section 107.002(a)(3), 5-21 Civil Practice and Remedies Code.