The company that makes scratch-game tickets for the Colorado Lottery defended Friday its purchase of trips and entertainment for Lottery employees.
In fact, Scientific Games is required to pay for those items under the terms of its contract with the Colorado Lottery, said company spokesman Martin Schloss.
The Colorado Lottery has been under a cloud since the Dec. 1 release of a state audit that found the agency had excessive expenses and questionable accounting practices. Questions also have been raised about the propriety of trips and gifts from vendors.
This week, state officials seized computers at three Colorado Lottery offices around the state.
The probe was triggered by an anonymous letter signed by "concerned employees" to Department of Revenue chief Michael Cooke, whose office oversees the lottery.
"There were a number of issues in that letter that certainly got my attention, and I began to look at some of the allegations," she said.
The employees didn't cite specific wrongdoing in their letter, just that some conduct in the office was inappropriate, Cooke said.
Because Schloss' faxed statement to the News didn't arrive until late Friday afternoon, Cooke could not be reached to respond to his comments.
In the statement, Schloss said the company pays for trips for Lottery workers to check tickets when new games are launched and for training. He said Scientific Games also pays for meals, golf games and tails for Lottery personnel, all legal under Colorado law.
"We believe that it is important to spend time with our customers to better understand the Lottery's needs; that such outings are in the normal course of doing business throughout the industry; and follow not only the letter but the spirit of the law," Schloss said.
The investigation comes on the heels of former Lottery Director Mark Zamarripa's resignation on Nov. 12, the day he was to meet with Cooke to answer questions.
Now, the investigation team "is looking at expenditures by employees and items of value received by employees from people who did business with the Lottery," she said.
Cooke initiated the probe and asked for assistance from the Colorado Bureau of Investigation and the Arapahoe County District Attorney's Office.
The three agencies seized computers and disks earlier this week from Lottery offices in Denver, Pueblo and Lakewood, Cooke said.
She wouldn't characterize the investigation as criminal in nature, but rather as a search for information.
"The fact that some person had a computer taken does not mean that person is suspected of any wrongdoing. But there might be some information that has traveled through that computer that could be helpful," Cooke said.
Drew Grant, spokesman for the Arapahoe County District Attorney's Office, confirmed that his office was contacted by the state in the past week.
"Because it does fall within our jurisdiction, we'd be determining if there is any evidence of criminal conduct," Grant said.
News of CBI's involvement in the lottery investigation and the seizure of computers surprised many at the statehouse Friday.
Although the Joint Budget Committee had been informed of the audit's findings, the problems didn't seem serious enough that the CBI's assistance would be needed, said Rep. Brad Young, a Lamar Republican and JBC chairman.
"It looks like there's more to this than meets the eye," he said.
Zamarripa worked for the Colorado Lottery since its inception in 1983 and served as director for the past nine years.
He said his resignation was for personal reasons and not related to the audit. He could not be reached for comment on Friday.
Zamarripa's replacement could be named as soon as Monday or Tuesday, Cooke said.
On Thursday, the JBC was told that the Colorado Lottery spent 7.8 percent of its revenue on overhead last year, compared with the national average of 5.5 percent.
It also spends 27 percent of its resources on its beneficiaries, such as open space and wildlife preservation, compared with a national average of 32 percent.
Young said legislation will be introduced this session, which begins Jan. 7, to tighten the Lottery's record management controls and annual reporting.
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