All you need is a dollar, some connections, and a horrible dream.
A federal grand jury is investigating the awarding of the $38 million contract to run the District of Columbia lottery, a process that raises further questions about corruption in a city government already beleaguered by criminal prosecutions.
Regardless of the outcome of the probe, the awarding of the lottery contract — which went to Greek gaming company Intralot in 2009 — illustrates systemic problems that open the door for elected officials to play politics with the contracting process and influence who wins.
Enter local businessman Emmanuel Bailey. A friend of Intralot lobbyist and former councilmember Kevin Chavous — who had introduced him to Gray during the first round of bidding — Bailey was brought on as a subcontractor with a 51 percent stake. Because he entered the contract after the procurement process, he didn’t get the same level of scrutiny from the CFO’s office before the council voted to approve the contract.
Bailey’s company operated out of his mother’s home. When city inspectors visited it, they found two desks, two computers and a printer in a family room. They found no company letterhead or business cards. Inspectors wrote in their report that the company should find a suitable office space before being considered for certification as a legitimate local business.
Two days later, Bailey’s company was certified, an action the city’s inspector general later found was improper. A local firm involved in a competing bid was denied certification _ and the inspector general said that move was improper as well. The inspector general’s report gave ammunition to critics of the lottery deal, but the office has no enforcement authority.
The contract awarded to Intralot and Bailey included a potentially lucrative option to operate an online gambling system if online gambling were legalized in the district. Councilmember Michael A. Brown worked to make that happen — but not by introducing a standalone bill. Instead, he inserted language into a budget bill that was initially circulated at 2:17 a.m.
Yes, we should absolutely make D.C. a state. As long we first merge it with Puerto Rico, Louisana, Rhode Island, and New Jersey.
We can call it, Corruptania.
Its state flag will be a hundred dollar bill. Its state bird will be whichever bird pays the most. Its state flower will be… you get the drift. Now pay up.
That was back in 2012. Fast forward to 2019 and Washington D.C. is still a tepid swamp where rivulets of corruption feed into a morass.
The Greek company Intralot, which last month received a $215 million contract to bring sports gambling to the nation’s capital and to continue running its lottery, says more than half the work will go to a small D.C. firm — a condition that helped the gaming giant win the no-bid contract.
The firm, Veterans Services Corp., will “perform the ENTIRE subcontract with its own organization and resources,” according to a document signed this summer by a top Intralot executive.
VSC is Emmanuel Bailey.
However, Veterans Services appears to have no employees, according to interviews and District records. Until recently, the company’s website touted executives who didn’t work there. The man who leads it, Emmanuel Bailey, is a Maryland resident who is employed by an Intralot subsidiary, public records and company financial statements show.
Intralot said it formed DC09 with Veterans Services to meet the city’s goals of supporting small, local minority businesses.
“Mindful of the District’s support for minority vendors and Intralot’s commitment to diversity, Intralot searched for [an approved] minority firm as a subcontractor,” said an Intralot statement provided by its Ohio-based communications consultant, Sandy Theis.
Veterans Services said it is a D.C. business because Bailey’s 75-year-old mother, Barbara, holds a majority stake and lives in the city. The business also lists DC09’s Southeast Washington office as its headquarters.
Bailey received $618,562 last year as DC09’s chief executive, according to Intralot’s financial statements, which include revenue and expenses of DC09. He received similar compensation in each of the previous four years, the statements show.
Indeed, as city officials recently approved the plan delegating up to $109.7 million in work to Veterans Services, they repeated Intralot’s boasts of local business involvement.
Yes. That’s $109.7 million. With an ‘m’.
“The District’s sports wagering contract is the only one in the U.S. to date that mandates 35% local and minority business participation (let alone delivers 55.58% participation),” David Umansky, a spokesman for the District’s chief financial officer, Jeffrey DeWitt, wrote in an email to The Washington Post.
I’m not sure how many black people there are in Greece. But I suspect any black businesses in Greece have more black employees than VSC.
When Veterans Services sought recertification as a local business in 2013, District officials noted it “has had no (0) employees over the past three (3) years, of which none (0) or zero (0%) percent was a DC Resident,” according to a report by the city’s Department of Small and Local Business Development.
What’s are Bailey’s qualifications? Come on, you know the answer.
A onetime bank branch manager and a former chief diversity officer at Fannie Mae, Bailey has also played roles in several small businesses.
He’s a chief diversity officer.
In 2008, Bailey and another officer of one of these companies, Wilson Technologies, settled a lawsuit brought against them by a subcontractor, Fresh Air Duct Cleaning, that accused the company of improperly holding a federal contract to provide janitorial services to Walter Reed National Military Medical Center, court records show.
The plaintiff accused Wilson Technologies of having “no experience with providing cleaning services much less cleaning services in a hospital.” So, it subcontracted all the work to Fresh Air, despite federal regulations requiring the prime contractor to perform at least 51 percent of the work, according to the complaint.
It’s not like a clean medical center for veterans is so important that the contract can’t be given to this guy.
The initial majority owner of Veterans Services Corp. was Bailey’s stepbrother, Vernon Wayne Bailey, according to records the company submitted to the District.
At the time, Vernon Bailey was a full-time maintenance worker for Campbell County, Va., a four-hour drive from the District. He had worked there since 1990 and would continue in that job until 2017, officials there said.
Within three months, the Baileys transferred much of Vernon Bailey’s share of the company to Barbara Bailey, making her the 51-percent owner, according to the company’s submissions to the District.
“Ms. Bailey has over 40 years experience in senior government roles, both within the District of Columbia Government and for Fortune 500 companies,” materials the company submitted to the District said. Her résumé, however, included elsewhere in the materials, mentioned no private-sector work.She had been laid off as an employee relations administrator for the District after working there for 25 years, the records said.
Yes. D.C. must become a state. The only question is how do we convince