Dem Gov's $1 Billion Gift to Party Deputy

DGA Chairwoman awards no-bid gambling contract to company represented by DGA treasurer

Gina Raimondo / Getty Images
July 29, 2019

Rhode Island governor Gina Raimondo is facing criticism after her administration awarded a no-bid billion-dollar contract to a gaming company that is represented by the treasurer of the Democratic Governors Association (DGA) which Raimondo chairs.

In June, Governor Raimondo and Democratic state legislators announced an exclusive twenty-year $1 billion contract with IGT to operate the state’s lottery system. The British gambling company is also poised to receive a 32 percent stake in newly-legalized sports betting operations.

Critics of the deal are raising questions over the closed-door no-bid process of the negotiations as the head lobbyist for IGT, Donald Sweitzer, also serves as the treasurer for the Democratic Governors Association which is led by Raimondo. IGT have also contributed approximately $70,000 to Gov. Gina Raimondo since 2014.

On Wednesday, the Rhode Island Republican Party filed a complaint with the state’s Ethics Commission alleging Raimondo's close ties to Sweitzer and his representation of IGT violate state ethics laws. The no-bid contract will give the company a needed boost as its stock has suffered in recent years. The ethics complaint says the no-bid contract will "increase IGT’s share of Rhode Island lottery revenues from 1 percent to 5 percent between $275 million to $400 million and will change Rhode Island law to give IGT control of 85 percent of the video gaming machines." This presents a conflict of interest given her relationship with Spritzer, given his past ownership of nearly 60,000 shares in the company.

"If Sweitzer, a business associate of Raimondo, has an ownership interest in IGT of at least $5,000, the State of Rhode Island cannot enter into an agreement with IGT except through an open, and public process," the ethics complaint says. "Raimondo’s participation in the agreement with IGT is prohibited by the Rhode Island Ethics Code...even if Sweitzer is not a shareholder of IGT, Raimondo violated [the ethics code] when she entered into a new agreement with IGT while Sweitzer, her DGA business associate, was actively lobbying for IGT related to this agreement."

According to Rhode Island law, public officials are prohibited from using their positions to benefit themselves or business associates and the ethics code requires competitive bidding before the state can award contracts if a business associate of a public official has a nominal stake in the company being awarded a contract.

The Raimondo administration did not return requests for comment, but a spokesman for the governor denied the allegations in the ethics complaint. He defended the $1 billion deal by saying it would protect local jobs by ensuring IGT remains in the state.

"This is a partisan attack attempting to derail proposed legislation that would guarantee jobs for 1,100 Rhode Islanders, secure hundreds of millions in local investment, and generate $80 billion in revenue for the state," Joshua Block, a spokesman for Governor Raimondo, said in response to the ethics complaint. "Each element of the proposed legislation will go through a thorough and public vetting."

Sweitzer is closely tied with IGT and as the treasurer of the DGA maintains a close relationship with Governor Raimondo.

After Raimondo was named chairwoman of the DGA in late 2018, Sweitzer retired as chairman of IGT and less than a week later was named as the treasurer of the DGA under Raimondo. In his role, Sweitzer has traveled the country with Raimondo raising money for the DGA and his former company has contributed $1.4 million dollars to the DGA since 2003, slightly less than Microsoft's donations over that time. Sweitzer additionally still serves as a lobbyist for the gaming company earning a $7,500 a month as the company’s main lobbyist in Rhode Island.

Block told the Providence Journal that Sweitzer "had no involvement in the negotiation" of the $1 billion contract but Democratic state House Speaker Nicholas Mattiello has disputed that claim.

Mattiello said he met with Sweitzer and another lobbyist for IGT in April and learned that the governor had been in discussions with IGT about the proposed contract. During the meeting, Mattiello questioned why he had just been finding out about the deal and why the legislature had not been notified of the deal earlier in the process.

In a statement to the Journal, Sweitzer acknowledged he has had discussions with the governor about IGT but said he had no involvement in the specifics of the negotiation.

"I spoke to the Governor and the Speaker about the fact that discussions were going on, but I did not participate in any of the negotiations," Sweitzer said.

Officials from the DGA did not respond to press requests from the Free Beacon about Sweitzer’s role as treasurer and whether or not he improperly used his position to influence the state’s contract with his former company.