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.