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Texas Lottery Director Resigns Over Jackpot Scandal

Jul 9, 2005, 10:41 am

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Texas Lottery

The executive director of the Texas Lottery Commission resigned Friday, two weeks after admitting he had approved advertising Lotto Texas jackpots that were higher than ticket sales could support.

Reagan Greer had overseen the nation's third-largest lottery since February 2003.

"In recent days, it has become clear that intense, ongoing efforts to restore Texans' confidence in the lottery can best be advanced through a change of leadership," Greer wrote in letter of resignation.

Greer said he had signed off on a staff report proposing an $8 million advertised jackpot for June 8 even though the report said estimated sales could cover only $6.5 million.

He said he approved that and two earlier inflated estimates without studying them because he trusted their accuracy.

The lottery commission meets Monday, and its agenda suggests Greer could have been fired had he not stepped down. It also indicates five top staff members could be reassigned, including the deputy director who now assumes Greer's duties.

Lottery commission chairman Tom Clowe did not immediately return a call seeking comment Friday.

The inflated jackpots came to light after a lottery watchdog filed a complaint with the state attorney general.

Afterward, the commission for the first time held the Lotto Texas jackpot at $8 million for the June 11 drawing because that was all estimated sales could support.

The Lotto Texas jackpot starts at $4 million and typically grows by at least $1 million each time no tickets match all five numbers and a bonus ball. During the first four drawings, the commission can use reserves for payouts if not enough tickets have been sold. But ticket sales usually are slow until the jackpot reaches $9 million.

Lee Deviney, one of two managers who proposed the inflated jackpots, told The Associated Press the agency did not have a clear policy on what should happen in such a situation, even though top management knew as early as March 2004 that it was likely to occur. He was fired after the inflated jackpots became public.

Initial focus was integrity of games

When Reagan Greer became executive director of the Texas Lottery Commission, he said he focused on the importance of integrity in overseeing games of chance.

As he stepped down Friday in the wake of a scandal over inflated lottery jackpots, the former Bexar County district clerk said that focus hadn't changed in more than two years on the job.

"It still is key, and people have to know that when they're playing the games, they get a fair shake," Greer, 47, said in an interview shortly after his resignation became effective at 5:30 p.m. Friday. "The integrity of the process has not been compromised."

Steps have been taken to avoid a repeat of the situation in which several advertised Lotto jackpots were bigger than could be supported by ticket sales, he said. As it happened, no one won.

But it did face public questions and lawmakers' demands for answers when the scandal came to light last month after a complaint was filed with the Texas attorney general by Dawn Nettles, who runs a Garland-based Web site devoted to lottery-related news.

Greer said the inflated estimates weren't intentional, and that he signed off on them because he took staff members' jackpot recommendations without giving them close scrutiny.

"I should have asked harder questions and paid closer attention to the scenario that was before me," he said.

Greer submitted his resignation before a Monday meeting at which commissioners who oversee the agency said they might deliberate Greer's future.

Greer said he remains proud of his overall record but that the looming meeting would have given him the options of being "fired, resign or stay" and that he still would confront the question of whether he could be effective.

There also were considerations of his family.

"This has not been easy on me or my family, and it was time for me to move on," said Greer, who has commuted from San Antonio during his tenure.

Greer's resignation isn't a panacea for the commission's woes, Nettles said Friday.

"Reagan Greer was set up," Nettles said in a statement. "The problems at the lottery existed long before Greer came on board."

Bexar County Commissioner Lyle Larson said Greer, beleaguered by the politics of appointed office and "the world of the commission" had expressed frustration about his position long before the jackpot scandal.

"He was looking for an exit strategy in January," Larson said.

Part of that strategy was to become one of the political dominoes in local Republican politics and run for Larson's seat.

Back then, Larson had designs on running for U.S. Rep. Henry Bonilla's job — a spot that would have opened if Bonilla ran for U.S. Senate. Bonilla was poised to do so if Sen. Kay Bailey Hutchison ran for governor.

But none of those runs came to pass.

Greer in 2002 lost his re-election bid for district clerk in a tight election with Margaret Montemayor.

The irony was that Greer headed up the GOP Victory 2002 campaign in Bexar County, charged with helping mobilize Republican voters.

Greer got particular credit for helping Bonilla stave off a serious challenge from Laredoan Henry Cuellar, who eventually set his sights on U.S. Rep. Ciro Rodriguez. But in the process Greer lost his own race by 206 votes.

"He sacrificed his own campaign to dedicate all of his energy to the campaign county-wide," Republican consultant Frank Guerra said.

A year after his loss, he was appointed Lottery Commission executive director amid cries from Democrats that job requirements were watered down to allow management experience as a substitute for a four-year college degree.

Greer has a two-year degree from San Antonio College and completed 50 hours of credit at Texas A&M, according to his original employment application.

Greer said he "absolutely" was qualified.  As for what he'll do next, he said: "I'll let you know."

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