Lottery firm under suspicion State investigators say Gtech lied during background probe 11:55 AM CDT on Thursday, July 20, 2006 By PETE SLOVER / The Dallas Morning News AUSTIN â State police on Tuesday accused lottery operator Gtech of lying to investigators during a probe of the company, prompting the Texas Lottery Commission to target it for greater scrutiny. Department of Public Safety officials briefed the lottery board on a series of questionable transactions by Gtech Corp. around the world. The inquiry was part of the agency's background check on the sale of the company to Italian firm Lottomatica. "Gtech is a very aggressive business entity that has a past history of protecting its contracts by lawsuit or threat of lawsuit and of pursuing new contracts with sometimes questionable actions," said DPS Lt. Mark Riordan Texas Department of Public Safety Report on Gtech Gtech's 10-year contract to run the Texas Lottery expires in 2011. In an eight-page, single-space document, DPS outlined instances over the last six years in which Gtech has fallen under suspicion of using kickbacks, padded consulting contracts and ill-advised loans to win or keep business in Brazil, Trinidad, Poland and the Czech Republic. A Gtech spokesman said later that the company has instituted rigorous ethics training and controls to prevent any illegal or questionable activity. "We have a very strict ethics policy," said Robert K. Vincent, Gtech vice president for communications. The DPS study was a snapshot that didn't completely reflect the complexities of the cases mentioned, he said. The DPS officers said Gtech officials initially told them that no documents existed from a private law firm's probe of its operations in Brazil. But corporate minutes showed otherwise, they said. The company conceded the existence of the documents when challenged but has failed to produce them despite numerous promises to do so, investigators said. Mr. Vincent, the Gtech spokesman, said the company has cooperated fully, leaving him confused about the DPS accusations of duplicity. Lt. Riordan said the investigation showed questionable payments as recently as February, when Gtech paid $380,000 to a Brazilian company identified as a vehicle for illegal political contributions and run by a known criminal. After hearing the report, Lottery Commission members worried aloud that the culture of Gtech is too tolerant of marginal behavior, especially after DPS officials said the Italian takeover would leave Gtech management in control. Chairman C. Tom Clowe Jr. said, "I thought we had been assured by [Gtech CEO Bruce] Turner in 2002 that things like this [have] not happened on his watch. They've happened." Lawyers advising the commission noted that none of the activities outlined by DPS resulted in criminal charges or convictions. Still, they suggested that Texas authorities require Gtech to outline specific measures designed to eliminate suspect activities. And, they said, the company should be told that the state will not tolerate even the appearance of impropriety. Lottomatica has agreed to purchase Gtech for $4.65 billion in cash, creating one of the world's largest gaming technology operators. Gtech, based in West Greenwich, R.I., provides lottery systems to 25 states in all. E-mail pslover@dallasnews.com http://www.dallasnews.com/sharedcon...lottery_20tex.ART.State.Edition1.226342f.html