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Were winners cheated on Miers' watch?

Harriet Miers unexpectedly resigned as Texas Lottery Commissioner on March 21, 2000, ten months before her term expired. Her resignation preceded only by days a controversy that broke out inside the Texas Lottery Commission and another that hit the newspaper regarding Locke Liddell, the Texas law firm where she was co-managing partner at the time.

WND has obtained a Texas Lottery Commission interoffice memo written by the finance director that was presented to the executive director March 30, 2000, arguing that changes in determining lottery payouts needed to be made to stop short-changing winners. This memo, which was not made available to the public, gives strong support to critics who had argued that lottery winners were cheated by not getting the full payout specified by Texas law. The accuracy of lottery payouts was disputed internally while Harriet Miers was chair of the Texas Lottery Commission. The memo could well advance the argument of aggrieved Texas Lottery winners who even today are considering litigation to recover sums they believe they are still owed.

The Lottery Commission was also under pressure from the Texas Legislature to address a problem of sagging sales and diminishing revenue. On March 14, 2000, the commission had voted to submit for public comment a plan to move to a 54-ball game, from the current 50-ball lottery. The idea was to increase jackpots so as to attract more lottery players. The problem was the additional four balls made the game harder to win, lowering the chances of winning the top price from 1-in-15.9 million to 1-in-25.8 million. That was the whole point. The Commission was calculating on the greed factor of a higher anticipated payout, while cynically expecting that the major result would be to increase the state’s revenue by increasing the odds in favor of the state.

Two weeks later, on April 15, 2000, the Austin American-Statesman announced that Locke Liddell had agreed to pay $22 million to settle the investor class-action lawsuit that charged the law firm had played a central role in the international currency scam perpetrated by Austin con artist Russell Erxleben and Austin Forex Investments, the company Erxleben created to advance the Ponzi scheme.

As WND previously reported, the investor lawsuit had charged Locke Liddell with knowingly participating in the fraud, approving AFI marketing material and allowing the firm’s legal opinion to be printed on Locke Liddell stationary for distribution to potential investors. Michael Shaunessy, one of the attorneys who filed the class-action suit, told WND that Erxleben had defrauded over 600 clients who had opened some 800 accounts with AFI, only to lose $33 million. Most were unsophisticated investors, including many senior retirees who had lost everything.

Was the timing of Ms. Miers’ departure from the Texas Lottery Commission just coincidental? Not according to Texas lottery expert Dawn Nettles.

“Miers was counting on George Bush to win the 2000 presidential election,” Nettles told WND. “So, in March 2000, she wanted to get out of the Texas Lottery Commission before any public scandals could harm her chances of going to Washington to get a White House job with Bush.” Nettles runs a popular Texas Lottery website that posts lottery results and provides analysis for picking lottery numbers. She has been highly critical of the Texas Lottery and what she considers their schemes to rig the lottery in favor of the state.

“The people deserve fair games of chance, fair payouts and fair advertising,” insists Nettles. Even when Miers was chief commissioner, critics charge that the Texas public was getting the short end of the lottery stick.

WND asked Nettles if she believe Miers was aware that lottery winners were receiving less than the full payouts deserved by law.

“No,” she told WND, “the staff knew, but I believe Miers was in the dark.”

This is almost identical to the answer the White House is currently giving when pressed about Miers’ role as co-manager of Locke Liddell while the firm was involved in several major investment scams, including writing advice letters for high net-worth investors placing large amounts in Ernst & Young tax shelters that are now under investigation by a federal grand jury. The White House has maintained that Locke Liddell is a large law firm, with several hundred lawyers, and Harriet Miers was not personally involved in the investment scams. Countering this claim, the petition filed by the defrauded investors in the Erxleben scam had directly charged Locke Liddell with a pattern of professional negligence. Rather than beating the claims of the fleeced investors in court, Locke Liddell chose to settle the suit.

What exactly was Harriet Miers’ responsibility as chair of the Texas Lottery Commission and as co-managing partner of Locke Liddell? Somehow, Miers’ position regarding her personal responsibility in these two roles is reminiscent of the “Schultz Defense,” made popular by actor John Banner in the 1965-1971 popular TV show, “Hogan’s Heroes.” Playing a Nazi guard of a POW camp in World War II Germany, Sgt. Schultz always maintained a position that “I see nothing,” adding humor to the obvious exploits repeatedly pulled of by U.S. POW Col. Robert Hogan, played by Bob Crane.

Related columns:

Harriet Miers enabled abusive tax shelters?

Harriet Miers contributed to Hillary’s election in 2000

Was Harriet Miers asleep at the helm?

How Miers’ law firm helped defraud investors

Federal crimes, GTECH and influence peddling

Harriet Miers at center of investment fraud

Cover-up deep in the heart of Texas

Is Harriet Miers ‘Unfit for Judging’?