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MAYBERRY, R.I.P.EX-LOTTERY DIRECTOR MADE THE MISTAKE OF CROSSING GTECH, A POWERFUL CONTRACTOR THAT IS USED TO GETTING WHAT IT WANTS

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Mayberry's unseating began to take form early this year, after he expressed weariness about GTECH's delay in upgrading the lottery computer system. An improved system would allow winners to collect at any ticket retailer, rather than solely the outlet that sold the winning ticket.

Lottery records show the Arizona agency had negotiated with GTECH since August 1991, with little success. GTECH promised to act, but never signed an agreement. Mayberry wrote to GTECH last January, saying the lottery wanted the new system on-line by July 1. GTECH was hesitant to upgrade the system, because it would cost about $450,000, and GTECH wanted the state to foot the bill.

Taking a page from its Maryland strategy, GTECH hired Leckie as a lobbyist last March.

GTECH spokesman Craig Watson says Leckie was hired to monitor the development of Indian gaming in Arizona, and to "provide us information and at times advice" on other issues. Leckie did not return phone calls from New Times.

Before long, the close relationship between Mayberry and Leckie soured. But Mayberry persisted. In a May 6 letter to GTECH, Mayberry reiterated that the upgraded program must be implemented by July 1, and this time he added a powerful threat: "If the system is not functional by July 1, 1993, we will be forced to evaluate all options available to us, including, but not limited to, forfeiture of GTECH's [$1 million] performance bond."

The threat stirred up a hornet's nest. Watson says GTECH felt Mayberry was misinterpreting the contract by assuming GTECH was obligated to install the upgraded system. "He's within his rights to make a threat like that, but he was somewhat overstated," Watson says.

Lottery commissioners say Mayberry was simply conducting solid business negotiations by trying to get as much as possible from state vendors. "This was an opportunity to play the game just like any other business," says Jess Finerman, a lottery commissioner and Phoenix accountant.

But sound business and politics don't always mix. Two weeks after threatening to seize GTECH's $1 million bond, Mayberry was told by the Governor's Office that he would be replaced. The governor wanted him to go quietly and take a job, with a $5,000 raise, at the state Department of Administration.

Mayberry rejected the payoff.
With time running out, Mayberry managed to force GTECH to the table on June 30 to hammer out a formal agreement to install the new computer system by November 30. The agreement also calls for the state to pay GTECH $250,000 to help defray costs of the installation--that's $200,000 less than GTECH had initially demanded. Mayberry's strategy worked. He signed the agreement on July 27.

Two weeks later, he was dismissed. With Mayberry out of the picture, there is no assurance the new lottery director will force GTECH to abide by the agreement.

Mayberry not only took on GTECH and its $6 million per year contract, he also was reading the riot act to Evans Group, which enjoys a $10 million annual lottery contract. Mayberry is said to have been angry about Evans Group's performance; he believed the company was taking orders from Leckie rather than from the lottery staff.

Lottery commissioner Finerman says Evans Group's performance was the topic of several commission meetings. "Some of the commissioners weren't happy with the results we were seeing," he says, adding that the commission instructed Mayberry to improve the company's performance.

Mayberry responded by pressuring Evans to roll back its commission in an effort to save the lottery several hundred thousand dollars per year. Mayberry also reportedly wanted Evans to replace the company's manager handling the lottery contract.

While Mayberry had the support of several lottery commissioners in his assertive stance with Evans Group, Mayberry is out and Evans Group retains its contract, which has not been altered.

There are indications that Mayberry's replacement, former Kansas lottery director Ralph Decker, was selected by Symington to smooth relations with GTECH.

For starters, Symington's stated reasons for the firing of Mayberry and the hiring of Decker don't add up.

Although a key part of the Arizona State Lottery's strategy for dealing with Indian gaming was to have GTECH upgrade the system, Symington said Mayberry was not qualified to deal with competition from reservations. The governor's spokesman, Doug Cole, also told reporters that Decker was hired, in part, because he led a successful sales campaign in the face of Indian-gaming competition in Kansas.

There is one problem with this reasoning. There is no Indian gaming in Kansas. In fact, Kansas lottery officials have stayed out of a debate raging there about whether tribes should be allowed to set up gambling operations.

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John Dougherty
Contact: John Dougherty