Chief Financial Officer withheld documents citing privacy and “deliberative process” exemptions
District Dig has sued the District government in order to force compliance by the city of its Freedom of Information Act (“FOIA”).
In Bedrock Media LLC v. District of Columbia (Case No. CA 002969), The Dig alleges that the Office of the Financial Officer (“OCFO”) misapplied FOIA exemptions in its response to a request for emails related to “emergency” legislation the D.C. Council passed in February 2019 that approved a five-year, no-bid, $215 million D.C. Lottery contract extension to Greek gaming company Intralot, a joint venture partner of local businessman Emmanuel Bailey of Veterans Services Corporation (“VSC”).
The complaint, filed on August 23 in D.C. Superior Court, seeks a declaratory judgment that the OCFO violated the District’s FOIA law when it partially denied The Dig’s 2019 request for communications between an OCFO official, top officials with the Office of Lottery and Gaming (“OLG”)–which is under the OCFO’s purview–and various employees and lobbyists affiliated with Intralot, VSC, and their joint venture, DC09 LLC.
The Dig is requesting those communications in order to shed light on a no-bid contract extension that then-CFO Jeffrey DeWitt and key City Council members insisted was necessary to accelerate the launch of sports betting, which the city legalized in December 2018.
In passing a law on an “emergency” basis that exempted the District from conducting a competitive procurement for the contract, DeWitt, then-Ward 2 member Jack Evans, Council Chairman Phil Mendelson and Ward 7 member Vince Gray, among others, cited three reasons:
The District needed to be first-to-market with sports betting in order to get a competitive edge over Maryland and Virginia;
Part of the revenue would go to much-needed social services for youth anti-violence efforts and early childcare;
The launch of sports betting would expand the functions of the D.C. Lottery and create opportunities for small, local and disadvantaged businesses.
More than two years later, none of these goals have come to fruition.
The lawsuit coincides with the most recent audit from D.C. Auditor Kathy Patterson, who reported last week that Intralot’s sports betting app–GambetDC, which allows gamers to wager on sports through their digital devices when within the District’s physical boundaries–took in less money than five other states she compared it to.
Patterson’s team of auditors found that the District made a paltry $230,000 in the first eight months of fiscal year 2021 from sports betting while returning below-average payouts to bettors.
None of that revenue will be directed to the stated programs until 2023, according to OLG officials.
Patterson also reported in July that Intralot shared less than 1 percent of that revenue with small, local and disadvantaged businesses, known as “Certified Business Entities, or “CBEs.”
And despite its rush to exempt itself from its own procurement laws, any edge in the sports betting market that the District may have had over its neighboring states is about to expire.
Maryland, which rejected a separate Intralot-VSC joint venture’s bid to operate their lottery in 2016 before awarding a revamped contract to a different vendor in 2020, is expected to launch sports betting this year before the NFL season ends. Virginia, which approved sports betting in April 2020, launched sports betting in January of this year.
The Dig filed its original FOIA submission in October 2019, when it requested email correspondence between OCFO Associate General Counsel Patricia Gracyalny and a number of individuals involved in the lottery contract award, for the time period of September 1, 2018, through December 31, 2018, including:
Intralot executive Byron Boothe and its general counsel, Jay Lapine;
DC09 majority partner and subcontractor Emmanuel Bailey;
DC09’s local lobbyist and subcontractor Thorn Pozen;
Former D.C. Council member and lead sports betting proponent Jack Evans;
Evans’s finance committee director Ruth Werner; and
DC09’s other local lobbyist N. William Jarvis, a business associate and close friend of Evans.
The OCFO did not provide any documents in response to the request, and directed The Dig to submit its request to the OLG. The Dig re-submitted its request in December 2019, and amended it to add email correspondence between those same individuals and former OLG Director Beth Bresnahan, OLG Director of Marketing and Communications Nicole Jordan, and Evans’s former chief of staff, Schannette Grant.
In 2020, when the Covid pandemic hit, the District government declared FOIA processing a non-essential function for an indefinite period of time, and The Dig’s request languished.
More than a year later, in March 2021, the OCFO produced approximately 400 emails–many of them duplicates within redundant communication threads–and withheld an undisclosed number of others claiming exemptions rooted in privacy and what is known as “deliberative process.”
The deliberative process exemption shields from disclosure policy recommendations by a subordinate to a decision maker. It is intended to protect the decision making process. According to attorney Don Padou, who represents District Dig, the exemption is one of the most frequently asserted FOIA exemptions and is often abused by government officials who are trying to hide embarrassing records.
The Dig then requested what is known as a “Vaughn Index,” which details the documents the government is withholding and its reasons for withholding them.
On June 23, some 20 months after the original submission, the OCFO replied that it was not required to produce a Vaughn Index, and declared that it would only comply in the event of a lawsuit or administrative appeal.
Padou, an experienced FOIA lawyer, filed the legal challenge to the OCFO’s denials on August 23. The court clerk accepted the lawsuit on August 25 and calendared a scheduling conference for December 17 at 9:30 am before Associate Judge Hiram E. Puig-Lugo.
The OCFO’s office referred all questions to the OLG, which, citing the pending lawsuit, referred all questions to the Office of the Attorney General. That office, which represents the District, did not respond to requests for comment.
The Dig’s requests for disclosure of correspondence between government and non-government personnel come after it published 10 articles from January 2019 through October 2019 detailing procurement irregularities, political machinations, the appearance of conflicts of interest and questions about whether “emergency” legislation to exempt the no-bid award from District procurement laws violates the Home Rule Act, which established D.C.’s municipal governance.
The move to exempt the city from its procurement laws unfolded along with Evans’s political demise, when he was stripped of his finance committee chairmanship due to ethics violations and forced to resign.
If The Dig prevails in court over its FOIA lawsuit, it could be getting a more detailed look into the behind-the-scenes communications that led to the District’s foray into sports betting.
