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by Mike Krone lobby partner Ricky Knox were earning a reported $3 million a year, which was 4 percent of GTECH’s annual revenues on their Texas contract, according to press accounts at the time. Neither man would comment for this story. Amid public pressure and criticism from Miers, GTECH cut Barnes loose, buying out his contract in February 1997 for a cool $23 million. But his role in the Harriet Miers and George W. Bush story was far from over. In February 1997, Miers and the Lottery Commission began to discuss replacing GTECH as the lottery operator. It was an issue fraught with power politics given the billions at play in the lottery: the Texas Lottery contract accounted for about 15 per cent of GTECH’s total revenues at the tim e. Adding to the intrigue, Miers’ Dallas law firm had, until 1996, represented EDS, a company openly interested in taking GTECH’s place. “Certainly I will tell you that we had issues with GTECH,” says Anthony Sadberry, a Houston attorney who served on the Lottery Commission at the time with Miers. “But I don’t believe it was anyone saying, `because of these things we’re hearing, we should rebid the contract.’ My sense is that all three commissioners wanted to know if we had the best deal we could get and was there something better out there.” The commission hired Lawrence Littwin, a New Yorker and veteran lottery operator, as executive director in June 1997. It would be his responsibility to seek proposals to replace GTECH. Miers and the Lottery Commission had gone through two interim directors since Linares’ firing five months earlier. Littwin’s presence caused more controversy, though, not less. He had once worked as an executive for GTECH’s main rival, AWI, a company that craved the Texas contract. Littwin also launched an investigation of GTECH campaign contributions to state legislators. When it became public that Littwin had sent lottery investigators to sift through state campaign records, several prominent state officials, including Miers, attacked Littwin in the media. Commissioners voted to fire their relatively new hirethe fourth director in less than a yearin October 1997. In the meantime, the State Auditor’s Office had released a scathing report on the Texas Lottery in August 1997more than two years 97,er after Miers’ arrival. The auditor’s report brimmed with accusations of conflicts of interest and poor management. It cited the lottery for maintaining too little oversight of GTECH and accused the company of a “less than arms length relationship” with elected state offi cials and the Lottery Commission. And yet, despite all the criticism of GTECH and the lottery, Miers and the commission decided to keep the company as their contractor. In February 1998, after a year of taking proposals from other potential contrac tors at a cost of more than $300,000 to the state, the three commissioners voted to close down the bidding process. ThenExecutive Director Linda Cloud had decided to end the bidding, saying that GTECH’s deal was the best the state could get. Miers and the commission ratified the decision. The troubles didn’t end. Littwin filed a lawsuit against GTECH in federal district court in Dallas in December 1998, claiming that the company had orchestrated his firing. Littwin’s attor neys set about trying to take depositions from the lottery’s major figures, including Miers, Cloud, and, most intriguingly, Barnes. Included in the Littwin case file is an anonymous letter addressed to U.S. Attorney Dan Mills. The letter alleges that the GTECH contract was extended in 1996 because Barnes held information that could have jeop ardized George W. Bush’s gubernato rial re-election campaign in 1998. While serving as speaker of the Texas House in 1968, Barnes had been instrumental in helping Bush win a coveted slot in the Air National Guard and thus avoid service in Vietnam. According to the unsigned letter, Reggie Bashur, who served as deputy chief of staff for Governor Bush, approached Barnes with a deal: keep quiet about the National Guard and the $3 million a year from GTECH continues to flow. Sometime after Barnes lost his lobby contract in February of 1997, Bashur took over as GTECH’s lobbyist. continued on page 20 OCTOBER 21, 2005 THE TEXAS OBSERVER 7