Operation OUTROVE update

After Barnes received his $23 million pay off from GTech in February, 1997, guess how long it took the Texas Lottery Commission to begin asking questions about GTech's high priced consulting contracts again? Two days.

In fact, the commission began questioning why GTech's consulting contracts were so high in November, 1996. A month later, it was revealed that GTech had hired a man named Mike Moeller as a consultant. Moeller just happened to be a longtime friend and future husband to then-Texas Lottery Director Nora Linares. Couple this information with the actions of J. David Smith, GTech's former national sales manager who had to resign in 1994 amid charges that he received kickbacks from high priced GTech consultants and paid off officials in states where GTech were trying to land contracts. The federal case against Smith failed, but a New Jersey case led to a 5 1/4 years prison sentence.

So what does this have to do with Bush? Plenty. GTech's past history shows us that they sometimes lack an ethical approach to obtaining state contracts, and we now know that GTech knew their Texas contract was in hot water as early as November, 1996. I would naturally expect a company in danger of losing a contract worth more than $100 million to actively divise methods to keep that contract, so I have no doubt that GTech executives had a few brainstorming sessions to figure out how they should approach this Texas situation.

Suddenly, 4 months later in February, 1997, the man who could possibly ruin George W. Bush's political career has $23 million burning a hole in his pocket, all thanks to GTech. This payoff came under the pretense of buying out Barnes' contract after the Texas Lottery Commission began questioning why GTech consultants were making millions. If this isn't making sense, let me rephrase it: the commission was bitching about GTech paying people like Barnes $3 million a year, so GTech "solves" the problem by paying him $23 million.

Still scratching your head? Don't worry, you're not alone.

GTech's $23 million pay off to Barnes is the basis of Lawrence Littwin's civil suit against the company. Littwin, a former vice president of GTech competitor Automated Wagering International, served 4 months as director of the Texas Lottery Commission before getting canned in October, 1997. After he was dismissed, the state lottery contract was not open to other bidders like he wished, and GTech stayed in Texas. (After this happened, two Bush aides, Reggie Bashur and Cliff Johnson, left the governors staff to become - you guessed it - lobbyists for GTech.)

Littwin contended that GTech wielded political influence to get him fired, and cited that part of this influence was paying off Barnes. Barnes still had information against Bush that was worth its weight in gold, so he still held influence over the governor.

GTech, a billion dollar corporation that surely has a legal department, found it was more cost effective to settle out of court with a man who doesn't have the resources of a billion dollar corporation with a legal department, and GTech gave Littwin $300,000. An Austin American-Statesman article from 10/30/99 lists the terms of settlement:

Under terms of the settlement, Littwin "admits that he has no personal knowledge of any of the criminal activity alleged in support of his claims against Gtech."

Littwin also agreed to give to Gtech or destroy all documents produced by the litigation, including transcripts of Barnes' deposition.

Barnes' deposition held some importance because it was the first time he admitted to helping Bush get into the Air National Guard. As for the rest of the documents, I have a couple questions: What is GTech trying to hide? And if they were innocent of Littwin's accusations, then why didn't they fight him in court?

Remember, the lynchpin of Littwin's case was that GTech used a $23 million payoff to Barnes so he would influence Bush. GTech settled, and got all the documentation from the case destroyed.

Just think about what a story this is without factoring in the letter Palast obtained which ties everything together.

[Sources. All articles referenced obtained through Lexis/Nexis.]
[Thanks to Erza at Pandagon for picking up the story.]