The rotten beginning of the Hoosier lottery

I wrote last week about my initial experience with political corruption in the state of Indiana. It was blatant and ugly but the ugliest was probably the rollout of the Hoosier Lottery (Powerball, scratch tickets, etc.). The Democratic Party controlled the Governor’s seat and it was determined to rake big money towards their donors and operators. That is what an election is all about—power and money. They had no shame.


As Deputy Commissioner for Minority Business at the state Department of Administration, I had access to the procurement activity—at least from a monitoring position. My wife, Kay, was also an executive at the Hoosier Lottery and she was a pipeline of information. I learned that their new insurance plan included all pre-existing conditions. Why would they buy such a very expensive plan? They began hiring all Democratic cronies who had serious illnesses and no insurance. They actually hired terminally ill people so that they could participate in the plan for the remainder of their lives.

Very few of the people were highly educated. One clumsy guy was hired as a deliveryman of scratch tickets. One day an elderly lady called the Lottery and said she found a box of about 2,000 scratch tickets in the middle of a grocery store parking lot (inside a cart). It was him and he didn’t even miss the tickets nor did anyone else know they were unaccounted for. It was a circus!

I got very involved when they were about to award the Managing Vendor contract. The winner of this contract would actually operate the ticket issuing and processing of winners. To say it was lucrative is an understatement. The three companies in competition were instructed to use my office for sourcing bona fide minority businesses within the state. One company did an excellent job of sourcing.

They put into their proposal 22 minority businesses that they would use if they won the contract.

They even signed formal Letters of Intent with these companies. Each one would become a multi-million dollar operation from specifications of their agreement.

Another of the companies signed up 10 minority businesses and formally pledged to utilize them if they won the competition. Again, this would amount to 10 new multi-million dollar operations born from this procurement activity. To say that these companies and I were excited would be a mild description. There was a lot on the line.

However, the third company in the competition avoided me and my office like the plague. There was no interaction and they didn’t seem to care. They knew something that we didn’t. The fix was in. Behind the scenes they were working the politics and all that it entails. Soon the announcement came and, low and behold, they “won” the contract. They had nothing but token minority participation—very little volume.

We were terribly hurt. All that potential was not realized as the local Democratic Party had other ideas. Those subcontracts would only go to political cronies and we Black business owners among other minorities would not benefit from this “public” procurement activity. It was time for me to go to war.

I expressed my outrage on radio and wrote articles that went into the press. The Director of the Hoosier Lottery called a meeting. We screamed at each other and it ended with this statement from him, “You have defied power and authority, therefore, you must burn.” That to me was clearly a death threat. I responded, “You got a match? Strike it and let’s see who burns.”

That was the last time I saw him. I told Kay that we had best watch each other’s back very close. A few days later something very strange happened. The Director was up in a plane taking a scenic view of Indianapolis (business prospecting). All of a sudden on this sunny day another plane crashed into his plane. All aboard died. Rumors of it being a “hit” still exist in Indiana today. All I knew was that someone who really wanted my demise was no longer on earth.

As for the lesson learned from the corrupt Lottery procurement and the other procurement indiscretions: We don’t always win and never assume they will do the right thing. Such was my mindset when the Obama Stimulus Bill came. I assumed there would be little Black business interaction and I was absolutely correct. If there is politically driven activity there will be no true diversity. That lesson increased my desire to find a more effective way to integrate the procurement activity of Indiana. It wouldn’t be long before I realized the need for a separate, watchdog, operation. An operation like a chamber of commerce. I confided in Kay, “We are going to start our own organization.”

(Harry Alford is the co-founder, president/CEO of the National Black Chamber of Commerce®. Website: Email:

About Post Author


From the Web