The Texas Lottery Commission fired lottery Executive Director Larry Littwin on Oct. 29, 1997, to end an investigation he had launched to uncover a criminal pattern of political influence buying that involved GTECH, the Rhode Island company operating the lottery, prominent Texas lobbyists on GTECH’s payroll, and a laundry list of Texas politicians, including both Democrats and Republicans. When Gov. George Bush wanted Littwin’s investigation stopped, Commissioners Harriet Miers and John Hill complied.

That is what Larry Littwin will tell the Senate Judiciary Committee once the staff attorneys receive the letter GTECH promised to deliver. In negotiations with Senate Judiciary Committee attorneys, GTECH agreed to release Mr. Littwin from the gag order imposed on him in 1998 by the $300,000 “negotiated settlement” reached then to end Mr. Littwin’s wrongful termination federal lawsuit against GTECH.

WND has learned that Littwin’s testimony will disclose bipartisan corruption – where money changed hands in a political influence-buying scheme that spread Texas Lottery money around widely to Democrats and Republicans alike. Sources say that Mr. Littwin’s testimony will put new light on the over $160,000 in payments the Bush gubernatorial campaigns made to Harriet Miers’ Locke Liddell law firm, including the $19,000 she was paid in 1995 to act as Bush’s personal emissary in a mission to make sure Ben Barnes kept the lid on George Bush’s less than candid explanation of the preferential treatment he received to get into the Texas Air National Guard ahead of a long list of other applicants.

New York resident Larry Littwin’s story begins on June 9, 1997, when he was hired by the Texas Lottery Commission, largely because of his extensive career with Control Data and their then-subsidiary Automated Wagering International. The honeymoon was short-lived. Littwin’s problems with the Lottery Commission began in earnest three months later when, in September 1997, he wrote three memos ordering a thorough search of political campaign contributions that may have been made by GTECH to a comprehensive list of Texas legislators and state officials, stretching back to 1989, two years before the Texas Legislature voted in the lottery.

Littwin had reason to be suspicious. In January 1997, federal prosecutors in New Jersey had released a pre-sentencing report in the criminal conviction of J. David Smith, GTECH’s national sales manager, which mentioned former Texas Lt. Gov. and GTECH lobbyist Ben Barnes as having been involved in a criminal kickback scheme that involved paying over $500,000 to a Kentucky company owned by Smith’s wife. In September 1997, Littwin wanted to investigate those charges and determine how deeply the corruption reached into Texas politics. Prior to his indictment in New Jersey, J. David Smith had bragged that he bribed some 10 Texas legislators to secure their votes when the lottery bill was before the Legislature. Lottery Chairperson Miers assured the Austin American-Statesman that the charges against Barnes would be investigated. WND can find no record of any investigation actually undertaken.

On June 18, 1997, just days after Littwin was hired, Texas Attorney General Dan Morales ruled that the Texas Lottery Commission could no longer keep secret the details of Mr. Barnes’ $23 million severance agreement with GTECH. Barnes’ contract was terminated by GTECH in the embarrassment resulting from the release of the federal prosecutor’s pre-sentencing report that indicated that Barnes had participated in Smith’s criminal schemes.

The amount of the Barnes’ payout rocked Texas. The newest member of the Lottery Commission, former Texas Supreme Court Justice John Hill told the Austin American-Statesman that he was jolted by the amount of the payment to Barnes:

When I was first given an approximate calculation of the amounts being paid to buy up this contract, I was shocked. And I’m still shocked. If they can afford to pay out millions of dollars for services they are not going to receive, it raises the question of whether they have other situations where they are not being prudent with their money.

Again, Harriet Miers promised an investigation, telling the newspaper, “We found the amount a highly significant number, and it’s one of the matters that continues to be under inquiry by the commission. Again, WND can find no record of any such investigation being undertaken by the Texas Lottery Commission, or by any Texas law enforcement unit.

This was not the first time Hill and Miers spoke with one voice. In 1999, Miers’ Dallas law firm – Locke, Purnell, Rain & Harrell – merged with Judge John Hill’s Houston firm – Liddell, Sapp, Zivley, Hill & LaBoon – to form Locke, Liddell & Sapp. Judge Hill appeared in Washington last week as one of the former Texas Supreme Court justices brought to the capital to buttress Harriet Miers’ troubled nomination. Commissioners Hill and Miers were desperate to calm the public uproar.

Littwin had applied for the Texas Lottery job on a whim. He and his wife were on vacation in California when they saw the Texas Lottery Commission’s quarter-page job notice in USA Today. On his wife’s encouragement, Littwin applied, deciding he would rethink his decision to retire. The Lottery Commission contacted him immediately, arranging to fly him to Texas as soon as possible. After meeting with him at a hotel, the three Texas Lottery Commissions voted on the spot, hiring him the same day they first met him, even though there were nearly 700 applicants to the job.

Littwin had made clear that he worked for a GTECH competitor and the first thing he planned to do was open the GTECH contract to competitive bid. Having competed against GTECH, Littwin knew they threw money around to buy political influence with little regard for the niceties of adhering to the proscriptions of criminal law. Littwin was offered an annual salary of $100,000. Asked to start immediately, he moved his residence into a hotel. As it turned out, his 5-month stay as Texas Lottery executive director was so short that he never had the time to buy a permanent home and move his wife to Texas to join him.

As Littwin took over as executive director, Lottery Chairperson Harriet Miers was at first publicly supportive of his efforts, including his decision to conduct a broad investigation to see how many more Texas politicians had been swayed by GTECH money. Even on Sept. 18, 1997, the Dallas Morning News reported that Miers believed “he [Littwin] is doing the right thing for the right reason.” She confirmed to the newspaper that Lottery security officials had been dispatched to investigate some 30 current and former state officials, including former Democratic Gov. Ann Richards and Comptroller John Sharp, who was planning to run in the next gubernatorial election.

The next day, on Sept. 19, 1997, everything changed. The Dallas Morning News reported that the political landscape had was in turmoil over Littwin’s investigations. Even Gov. Bush had decided to weigh in with vociferous objections, calling Littwin’s investigation “overzealous.” Karen Hughes, the governor’s spokesperson, argued that the New Yorker just did not understand how things were done in Texas. “He [Governor Bush] hopes that this was a situation of someone who was new to Texas being overzealous in trying to inform himself about the history of the Lottery,” Ms. Hughes told the newspaper. “If it was an attempt in any way to embarrass or intimidate key members of the Legislature or the executive branch, then Gov. Bush strongly objects.”

Commissioners Hill and Miers soon got on the same page with Gov. Bush, determined to stop Littwin. The Dallas Morning News reported that Hill had only learned about Littwin’s investigation in an executive session where the three commissioners ordered Littwin to stop. “The truth is none of us knew anything about this until it was reported to us in executive session,” Judge Hill told the newspaper. “We made our position clear. I’m sure it won’t be reported.”

Two days later, on Sept. 21, 1997, the Dallas Morning News pursued the story, quoting an increasingly agitated Gov. Bush. “I don’t think any of us understand what he [Littwin] was doing,” Bush told the paper. “If in fact he was gathering data to try to embarrass a member of the House or Senate or the executive branch, it’s inappropriate behavior. I just don’t understand what was going on there, and I don’t think anybody does yet. I think that will be clarified by the commission.”

On Oct. 2, 1997, Lottery Commissioners Miers and Hill told the Dallas Morning News that they had not approved the records search Mr. Littwin had undertaken. In the same article, Littwin defended himself:

Specifically, in the exercise of due diligence with provisions of our vendor contracts, I felt this research and review was important in order to determine if any financial contributions had been made by GTECH.

On Wednesday, Oct. 29, 1997, the Lottery Commission met and ended the controversy, voting to fire Executive Larry Littwin, less than five months after he had been so suddenly hired. On Feb. 20, 1998, the Dallas Morning News reported that Linda Cloud, Littwin’s replacement as lottery executive director, had decided to end competitive bidding for the GTECH contract, even though there were lower-priced bids then on the table.

A WND search of Texas Lottery Commission documents failed to find the internal memos Mr. Littwin wrote in September 1997 to launch his investigation of political influence buying. The Senate Judiciary Committee armed with subpoena powers may have better success surfacing those documents, as well as any additional internal records which surround the controversy.

Federal Election Committee records show that Ben Barnes is a generous contributor to many Democratic Party campaigns, with recent campaign contributions made to Judiciary Committee members Sens. Kennedy, Leahy and Schumer, as well as to Democratic presidential hopefuls, Sens. Kerry and Clinton. A full investigation into Ms. Miers’ record as Lottery commissioner will most likely require the Senate Judiciary Committee to issue a subpoena to Mr. Barnes, as well as to Mr. Littwin.

WND has been told Senate Judiciary Committee attorneys have held discussions with Mr. Littwin as well as with GTECH, and are making plans for Mr. Littwin to appear before the staff, in preparation for public testimony. A subpoena for Mr. Littwin to appear before the Senate Judiciary Committee staff could be issued as soon as Thursday this week. WND has also been told Littwin’s testimony offers the possibility of opening new investigations and generating new indictments.

An examination of the record gives lie to the statement that Miers “cleaned up the Texas lottery scandals.” In 1995, when Gov. Bush first appointed Miers as chairperson of the Lottery Commission, J. David Smith and Ben Barnes were busy buying influence in Texas for GTECH below the radar screen. The scandal blew up when the federal prosecutors in New Jersey decided to publish their pre-sentencing recommendations in J. David Smith’s criminal conviction, a report that openly pointed an accusing finger on Ben Barnes.

When Harriet Miers left the commission in 2000, anticipating that she would be awarded a position in the White House should George Bush win the presidential election, GTECH still had the Texas contract and all investigations of political influencing buying in GTECH’s Texas Lottery contract had been effectively squashed. That may all change once Larry Littwin begins testifying. We have cautioned before that Larry Littwin may turn out to be George Bush’s John Dean.

To continue that analogy, it took one “third-rate burglary” to open an investigation that brought down the Nixon administration as Nixon’s second term was beginning and Vietnam was playing to defeat. George W. Bush’s second term is still in its first year and we are yet struggling in Iraq. The comparison is painful. By nominating Harriet Miers, President Bush has managed to re-open on a national stage the Texas Lottery scandals and the National Guard controversy. Before we are finished, we may be examining how lotteries buy political influence in America today, as well as replaying the debate over Vietnam that characterized much of the 2004 presidential campaign.

We repeat once again our request to the president to withdraw this dreadful nomination. If politics dictate an alternative solution, we ask Harriet Miers to withdraw from the nomination, so we might avoid another long, painful and needless examination of old matters that probably would be better off never exhumed.

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