Auditors Blast Lottery Chief’s Separation Package As Attempt To Circumvent Rules – Hartford Courant
State auditors Friday blasted the separation package that the Connecticut Lottery Corp. gave its president and CEO, Anne Noble, last September, saying it appeared intended to “enhance Ms. Noble’s retirement benefits” and “to not reveal the existence” of a state regulatory action “that would have suspended or terminated her license.”
Chief State Auditors Rob Kane and John Geragosian made those statements in a letter Friday afternoon to Brenda K. Halpin, director of the state Retirement Services Division of the state comptroller’s office. Copies went to officials including the governor, attorney general and legislative leaders.
The auditors asked retirement officials to conduct “a full review” of what they branded as a “questionable arrangement” — under which Noble stepped down Sept. 22 from her $212,000-a-year lottery chief post and immediately become a “senior adviser” to the lottery corporation’s governing board at the same pay level.
That arrangement continued until Jan. 31, when Noble reached a 10-year employment threshold to qualify for retirement benefits. Now she’s receiving $25,000 a month as a consultant to the board through July.
Noble responded Friday that questions about the status of her employment and her state-issued gaming license are unjustified.
She said that officials at the state Department of Consumer Protection, who oversee the quasi-public lottery corporation, are engaged in an “ongoing attempt to discredit me, starting last summer, [that] is self serving and politically motivated and should be the focus of inquiry.”
The enduring controversy dates back to November 2015, when the 5 Card Cash online lottery game was shut down after being plagued by fraud that ultimately resulted in 15 arrests. Lottery vendors were able to slow down their computerized terminals so they could see on a display whether tickets would be winners — and then they surreptitiously printed them for themselves.
Consumer protection officials were deep into a probe of the 5 Card Cash fraud last summer when the lottery’s governing board entered a “transition agreement” for its September separation deal with Noble.
On Friday, the auditors said in their letter that “it appears that the principal reasons for the transition agreement were to enhance Ms. Noble’s retirement benefits and to not reveal the existence of a Department of Consumer Protection investigation and pending action against Ms. Noble that would have suspended or terminated her license.”
“This type of adverse action against her license would have precluded Ms. Noble from working for the Connecticut Lottery Corporation,” the auditors wrote. “It appears that the creation of the arrangement … was an attempt to circumvent Ms. Noble’s legal requirement to be licensed and to allow her to collect enhanced state benefits (lifetime healthcare and cost of living adjustments) she may not qualify for. We estimate these benefits will cost taxpayers hundreds of thousands of dollars.”
State Senate Republican Leader Len Fasano and a few other legislators have questioned the separation deal for months. The legislature’s public safety committee peppered lottery board Chairman Frank Farricker and other officials with questions about the 5 Card Cash debacle at a hearing on Tuesday, and the panel’s co-chairman, Rep. Joe Verrengia, D-West Hartford, said he will reconvene the hearing soon for more questions.
And on Friday, the auditors wrote Halpin: “We would also ask you to inquire as to whether the Department of Administrative Services or any other state agency approved this employment arrangement. If so, were they informed that the reason the Lottery Corporation was seeking the change was because Ms. Noble could no longer be employed by the corporation if adverse action against her license occurred?”
The auditors said that lottery officials “engaged in an effort to keep government officials and the public from knowing all the facts” about the 5 Card Cash cheating scandal as well as “Ms. Noble’s employment situation.” In addition, they said, the lottery corporation “paid over $100,000 in legal bills for the board and Ms. Noble to create this questionable separation agreement.”
Noble responded in an email to The Courant. “My Transition Agreement expressly retained me as an employee of the CT Lottery Corp. until January 31, 2017. I … performed work for the Lottery as provided for in the Agreement,” she said, adding that her payroll records reflect that. She said the transition agreement “was consensual and negotiated … after many years of exemplary service to the Lottery with unprecedented results and integrity. I turned in my license to the DCP when my employment ended on January 31, 2017.”
Consumer protection officials say her gaming license expired when she quit as CEO last September, but Noble Friday called that “categorically erroneous” — adding that “I have consistently disputed their position, which flies in the face of the plain language of the Transition Agreement and my personnel and payroll records.”
The comptroller’s office said Friday that Noble has applied for retirement effective in April 2018, when she will be 55 and eligible.
House Republican Leader Themis Klarides reacted to the auditors’ letter late Friday by saying Noble got a “sweetheart…backroom deal” that “is an affront to the public.” She said the auditors’ report “further erodes public confidence and highlights an obvious attempt by a highly paid bureaucrat to ensure her future. Worse, she was apparently enabled by those who were entrusted with looking out for he public’s interests.”
