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It's a new year, everyone, and it still ain't over. Yes, the curious, disturbing and always surprising, process to name a private management firm to run the Illinois Lottery goes on. And on. And on.

The latest development, and first of the new year, concerns Melissa M. Riahei, who was, until very recently, general counsel for the Illinois Lottery. But no more. Riahei has abruptly left the Lottery to take a job as executive vice-president and general counsel of U.S. Digital Gaming. As recently as today, Riahei's abrupt exit apparently was news to some in the Illinois Department of Revenue, under whose purview the Lottery falls. Riahei had been the Lottery's general counsel since 2007.

Riahei was a key player, of course, in this entire, protracted process to name a private manager for the Illinois Lottery. Gov. Pat Quinn selected Northstar Lottery Group to get the contract on Sept. 15, but no contract has been signed. Northstar is comprised of Gtech, Scientific Games and Energy BBDO/Chicago. Losing contenders Intralot and Camelot Group have filed protests about the bid process and its outcome that are still in process.

Riahei is of interest because, sources say, she was involved in efforts to get Intralot to drop its protest and avoid the release of unflattering details about Sokratis Kokkalis, the head of Intralot's parent company in Greece, Intralot SA. Intralot did not withdraw its protest, and the Lottery and Department of Revenue subsequently made good on its threat (some have called it blackmail) to release an unflattering report about Kokkalis.

Happy holidays! The surprises in the protracted process to name a private manager for the Illinois Lottery just keep on coming. Not the kind of surprises, however, one likes to hear about around the holidays.

The latest bombshell has to do with the probity checks the Illinois Department of Revenue and the Lottery supposedly hired the Kroll firm to conduct. As we all know by now, Kroll went overboard (some might say way overboard) doing an exhaustive probity check on Intralot, the contender that was dumped within days after the cutoff for submitting a bid for the Illinois Lottery private management contract.

Intralot has been in the middle of an aggressive protest of that entire bid process and the outcome for the past three months -- ever since Gov. Pat Quinn named the Northstar Lottery Group the putative winner of the private management contract on Sept. 15. Northstar is comprised of Gtech, Scientific Games and Energy BBDO/Chicago. Camelot Group, the other losing contender for the private management contract, has protested the outcome as well.

But back to the latest bombshell. It came to light late last week that the Illinois Lottery and Kroll apparently never conducted a full-blown probity check of either Northstar or Camelot while the Lottery was going through the protracted process of selecting the winning bidder.

And even though a probity check of the winner was supposed to be conducted before any contract is signed, no such check appears to have been conducted. Not yet at least. And here we are three months after the announcement of Northstar as the presumptive winning bidder.

Needless to say, sources tell us Intralot executives were aghast when this bombshell news got to them via John McCaffrey, the acting freedom of information officer at the Illinois Department of Revenue. It's revelations such as this one, of course, that have skeptics continuing to believe the entire private management bid process was rigged from the get go.

On another front Energy BBDO and it partners Gtech and Scientific Games (that together comprise the Northstar Lottery Group) find themselves with no signed contract to manage the Illinois Lottery a full three months after Gov. Pat Quinn declared Northstar the winning bidder for that contract. And there are signs Northstar could be waiting longer to find out if they ever will have a signed contract to manage the Lottery.

Sources tell us that Lottery acting superintendent Jodie Winnett is not going to carry on as head of the Lottery as Gov. Pat Quinn prepares to be sworn in for his first full term in office. In her capacity as acting superintendent, Winnett had overseen the bid process that has been called into question by some of those who participated in the bidding, including losing contenders Intralot and Camelot Group. A spokeswoman for the Illinois Department of Revenue said Tuesday that she had no knowledge of what Winnett's status at the Lottery would be going forward.

But if Quinn appoints a new Lottery superintendent, as sources have indicated he will do, it could lead to more developments that might significantly affect the whole protracted private management bid process. It might even lead to a decision to start the bid process all over again.

All we can say with absolutely certainty at this point is that the private management bid process ain't over.

It's been too long since we last referenced the protracted effort to seal a deal with a private manager to run the Illinois Lottery. We've said for months it ain't over. And it still ain't. Far from it.

While we were away dealing with other matters, a potentially interesting new wrench has been thrown into the proceedings -- namely the matter of whether Jodie Winnett will remain with the Lottery as we move into Pat Quinn's first full term as governor next month.

Even as Winnett was serving as acting superintendent of the Illinois Lottery and overseeing the protracted process to name a private manager for the Lottery, she was holding down a second job as associate director of the Illinois Department of Revenue, under whose purview the Lottery falls.

As it was explained to us by a spokeswoman for the Department of Revenue, Winnett could be asked by Quinn to become the permanent superintendent of the Lottery. Or Quinn could name someone new to head the Lottery when he begins his first full term as governor, in which case Winnett might simply return to doing her second full-time job in the Department of Revenue.

Or yet another scenario might ensue. If, for some reason Quinn decides to put in someone new to replace Brian Hamer as director of the Department of Revenue, that could prompt a number of new faces to appear up and down the chain of command in the Department of Revenue.

While we wait to see how all of that plays out, a separate drama continues to unfold regarding the protests from the losing contenders for the Lottery private management contract. Both Camelot and Intralot, we're told, haven't backed off their protests. Both are said to be responding aggressively to the responses to their protests that both received from the Department of Revenue a couple of weeks ago. The Intralot Group is believed to be zeroing in on Kroll Associates and the crucial role it played in dishing up dirt on Intralot's Greece-based parent operation Intralot S.A. and its leader Sokratis Kokkalis.

Among other things, Intralot is said to be raising questions about the Department of Revenue's choice of Kroll to handle probity checks for the private manager finalists. Intralot has combed through numerous documents to pinpoint what it contends are "improper ties" between Kroll and the Northstar Lottery Group, the winning bidder for the Lottery private management contract that Quinn announced way back on Sept. 15. Northstar is comprised of Gtech, Scientific Games and Energy BBDO/Chicago.

Intralot also has taken major issue with what it claims are "inflammatory allegations" that Kroll included in its probity check of Intralot -- most of which Intralot maintains was done after it was dropped from contention for the private management contract early in the process.

Of course, when all of this is boiled down, there appear to be serious and deepening concerns within both the Camelot and Intralot camps that this entire private management bid process may have been rigged from the get-go, and both organizations look to be intent on proving their concerns are justified. In the meantime, no contract has been signed.

It very well may be that all of this will finally be resolved with a new leader in place at the Illinois Lottery, and possibly at the Department of Revenue. If fresh sets of eyes take a look at all that has unfolded, could that prompt a decision to rebid the private management contract? Time will tell.

We've read through the Illinois Department of Revenue's formal response to Intralot's formal protest to the outcome of the Illinois Lottery private management bid process. And the response, spanning 23 densely-worded pages, certainly makes clear that Sokratis Kokkalis, the chairman of Intralot US's Greece-based parent Intralot SA, was of supreme interest to the folks at the Department of Revenue and at Kroll, the firm hired to do probity checks during the Illinois Lottery private management bid process.

What is almost totally glossed over in the extended portion of the Department's response that deals with Kokkalis and the various criminal indictments against him in years past is the fact that he was, according to the report, acquitted of all those past charges. Which, to us, begs the question: Are the charges really as damning as the Department of Revenue and Kroll would have us believe. In the eyes of the Department of Revenue and Kroll officials, dirt is dirt apparently. And it was enough for them merely to trot out the indictments and suggest Kokkalis and everything he may have touched was therefore tainted.

Intralot, we're told, is preparing a formal response to the Department of Revenue's formal response that should be in the Department's hands by Friday. And the protest goes on. We've heard that the state inspector general may be compelled to take a closer look at a lot of what has happened over the past four months before any contract is signed with the Northstar Lottery Group that Gov. Pat Quinn named the winner of the Lottery management contract on Sept. 15.

Maybe you thought it was over after Gov. Pat Quinn eked out a razor-thin win over Bill Brady? Well it ain't.

We're talking, of course, about the very protracted process to select a private manager for the Illinois Lottery. Gov. Pat Quinn announced on Sept. 15 that he had selected Northstar Lottery Group to manage the Lottery -- basically rubber stamping the recommendation made to him by the Illinois Department of Revenue. Northstar is comprised of Gtech, Scientific Games and Energy BBDO -- all of which currently have contracts with the Lottery.

But no private management contract with Northstar has been signed, and now we hear that really dark storm clouds are rapidly forming in the wake of the Department of Revenue's official response Friday to a formal protest lodged by Intralot, a contender for the Lottery management contract that was dumped early in the bid process.

It took nearly two months for the Department of Revenue to craft its formal response, and the contents, we're told, have angered the folks at Intralot. As Illinois Department of Revenue execs had threatened to do weeks ago, they made Intralot SA chairman Sokratis Kokkalis, who is based in Greece, a major focus of their response. One source who had read the lengthy response described the attack on Kokkalis as nothing less than "ferocious."

Now Intralot's next move may be to request that the state attorney general and/or inspector general take a look at what has unfolded during this entire process. The Illinois state legislature, which passed the legislation that prompted the selection of a private manager for the Lottery, may get back involved, as well.

It does not appear the Department of Revenue has completed its response to the formal protest also filed nearly two months ago by the Camelot Group, the other finalist for the private management contract.

We will post more on this now quickly-developing story as details become available. But, in the meantime, we can definitely confirm that it ain't over. And there is no indication it will be any time soon.

We were out of the country for a week, and guess what, it still ain't over. We're referring, of course, to the protracted Illinois Lottery private management contract bid process. When we left a week ago, the formal protests lodged by losing finalist Camelot Group and ex-contender Intralot were still in process.

And as of late Monday, according to a spokeswoman for the Illinois Department of Revenue, there was no indication when a formal response to both protests would be issued or when a management contract might be signed. Gov. Pat Quinn awarded the Lottery management contract on Sept. 15 to the Northstar Lottery Group, comprised of Gtech, Scientific Games and Energy BBDO/Chicago, which respectively supply technology, games and advertising to the Lottery

But it's at least clear no response to the protests will be forthcoming -- and no Illinois Lottery private management contract signed -- until after today's vote, which could render Gov. Pat Quinn a lame duck and possibly throw a new wrench in the proceedings.

We also heard that while we were away the Illinois Department of Revenue apparently was busy distancing itself from any allegations of blackmail -- or what could have been interpreted as blackmail by some -- in a meeting between representatives from the department and Intralot on Oct. 19. The Department of Revenue, however, has not denied a meeting took place.

In any event, more to come in the next several days. Just remain mindful of what we've said all along: It ain't over until it's over.

Need we repeat? It ain't over until it's over. And the formal protests related to the Illinois Lottery private management contract bid process aren't over yet.

Now, sources tell us, Intralot's concerns about the manner in which its formal protest has been (mis)handled by executives with the Illinois Department of Revenue and the Lottery have been dropped in the lap of the man who made the final decision on the contract -- none other than Gov. Pat Quinn, who remains in a tight race to save his job as the state's leader.

Quinn awarded the contract to the Northstar Lottery Group on Sept. 15. Northstar is comprised of Gtech, Scientific Games and Energy BBDO, all of which currently have contracts with the Lottery.

Sources say a letter was hand delivered to the governor's office today that talks bluntly about what Intralot considers highly inappropriate actions on the part of Department of Revenue and Lottery officials. Those actions, as referenced in a posting on this blog last week, involve threatening to go public with some of the more salacious details about the background of one Socratis Kokkalis, the head of Intralot Group's parent company, which is based in Greece.

Sources indicated that Department of Revenue and Lottery executives suggested to Intralot reps during a hastily-called meeting on Sept. 12, that it might be in Intralot's best interest to drop its formal protest to avoid disclosure of unflattering information about Kokkalis dredged up by Kroll, the firm hired to do probity checks for the Illinois Lottery private management bid process.

Intralot, however, wasn't interested in dropping its protest.

On the contrary, it has escalated the protest to the governor's office. Of course, Intralot must realize that any move by the governor to investigate the situation as it now stands might be interpreted as an admission on his part that something could be wrong -- an acknowledgement Quinn could be highly reluctant to make at a delicate point in time when his political future is at stake.

But sources say plenty of other state executives and legislators, including attorney general Lisa Madigan and state senate president John Cullerton, have been carbon-copied on the Intralot letter to the governor. So plenty of eyes in positions of power and influence are watching.

Meanwhile, Camelot Group, a finalist for the Lottery private management contract, also remains very much in formal protest mode. As of late last week, Camelot had heard nothing definitive from the Department of Revenue or the Lottery regarding its protest.

A spokeswoman for the Department of Revenue said she was hopeful some response could come on at least the Intralot Group protest by week's end. But that's not definite. "It's complicated," she said. No kidding.

But whatever does happen, rest assured, it won't be over until it's over.

It's been a while. But the fact remains: It ain't over until it's over. And things are getting real interesting on the protest front in the protracted effort to name a private manager to run the Illinois Lottery. As you may recall, Gov. Pat Quinn (who could become a lame duck governor shortly) selected the Northstar Lottery Group to manage the lottery back on Sept. 15. Northstar is comprised of Gtech, Scientific Games and Energy BBDO/Chicago, all of which currently have contracts with the Illinois Lottery.

The other finalist for the private management contract, Camelot Group, and Intralot, which was dropped from contention early in the selection process, both subsequently filed formal protests with the Illinois Department of Revenue over various aspects of the way in which the bid process played out. Since then, there's been no clear indication of how Lottery executives and the Department of Revenue would deal with the protests. But out of the blue, it apparently became much clearer two days ago, at least for the Intralot Group.

Sources report there was a hastily-called private meeting between representatives from the Lottery/Department of Revenue and Intralot. To the apparent amazement of the folks at Intralot, sources say, the state executives suggested it might be in the best interests of Intralot to drop its protest by Friday, Oct. 15, or the Lottery would move forward with a plan to release more detailed information about the so-called probity checks that doomed the Intralot bid. A firm called Kroll has been handling all the probity checks for the entire private management bid process.

What Kroll determined to be a problem during the Intralot probity check, sources say, is the background of the Greece-based head of Intralot, a gentleman named Sokratis Kokkalis. A brief review of Kokkalis' background does suggest the man has had some questionable associations, including a stint as an agent with the East German secret police. He has also been indicted in several foreign countries, but cleared of all charges in every instance, sources tell us. What's more, Kokkalis never became a huge sticking point in 12 other United States lottery-related bids and 40 foreign bids in which Intralot has participated in recent years.

But now it appears Kokkalis has become the rod the Illinois Lottery and the Department of Revenue want to use to browbeat Intralot into withdrawing its protest. But we're told Intralot will have none of such tactics. If the state follows through with a plan to release the Kokkalis information Friday and use it to justify rejecting Intralot's protest, don't be surprised if the word "blackmail" is heard above the fray. It's unclear at this point just how Camelot's protest is faring. We will update that when we have more info to report.

Time, of course, is of the essence now, in terms of getting the private management contract signed. The November elections are just a little more than two weeks away, and if Quinn loses, it's going to make a lot of people in state government very nervous. And it just might have an adverse impact on the private management deal if it isn't signed and sealed by then.

On a separate matter, we heard from a Northstar representative regarding a previous posting suggesting Intralot had not filed any formal lottery-related protests elsewhere. The Northstar rep claimed that was not true and referred to three states in which Northstar alleged Intralot had filed protests over bids. We did some additional checking and found that two of the situations Northstar referenced weren't in fact formal protests of the sort that are underway in Illinois now. The third in Wisconsin in 2004, was indeed a formal protest, but Intralot withdrew it before any action was taken on it.

More on the "it ain't over til it's over" front. Despite a long list of legitimate concerns expressed by both Intralot and Camelot Group in their respective protest letters regarding the Illinois Lottery private management bid process, it appears Gov. Pat Quinn and Illinois Lottery officials are hell bent on getting this private management contract signed pronto.

That rush to seal the deal suggests to some observers in the Intralot and Camelot camps that the Lottery has no intention of digging deeply into -- or perhaps even seriously considering -- the issues raised in the protest letters sent to the Illinois Department of Revenue last week. Indeed one source is reporting the Illinois Lottery hopes to sign the contract with the Northstar Lottery Group -- Quinn's choice to manage the Lottery -- on or around Oct. 13, just two weeks from now. No doubt Lottery officials want that contract signed before the Nov. 2 elections, lest the results somehow cause what Quinn has decreed to be put on hold or otherwise affected.

Meanwhile, the winning Northstar consortium -- comprised of Gtech, Scientific Games and Energy BBDO/Chicago -- doesn't appear to be the least bit concerned about the protests. The word from within the Northstar camp is that such protests are to be expected in the normal course of contracts being awarded in the lottery industry.

But others beg to different. In fact, one Intralot source said the group has never filed a formal protest in any lottery bid it has participated in since its United States operations launched in 2002. Until now.

Both Intralot and Camelot are supposed to get some response to their protests from the Illinois Department of Revenue momentarily. Should one or both of the protesting bidders not like what they hear from the department, both still have the option of a judicial review of their respective protests.

It ain't over til it's over.

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Lewis Lazare has written the Media Mix column for the Chicago Sun-Times for the past seven and a half years.

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