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Statehouse Beat: Lottery latest example of dysfunction at WV Capitol

Quote of the week: “It seems Lottery is another agency that may be in dysfunction.” — Sen. Corey Palumbo, D-Kanawha.

Yes, it was just another week at the dysfunction junction: The vital Department of Commerce remains leaderless, and Gov. Jim Justice told Hoppy Kercheval that he has been unable to find a qualified individual willing to take the job as department secretary.

As Palumbo pointed out, Lottery Director Alan Larrick resigned abruptly, and apparently not over issues regarding his continuing to practice law in violation of Lottery code, and top Lottery attorney Danielle Boyd was MIA. (More on that later.)

Delegate Isaac Sponaugle, D-Pendleton, filed a petition at the state Supreme Court to compel Justice to abide by the state constitution and actually reside in Charleston.

One of the best and brightest in the Justice administration, Dr. Rahul Gupta, announced he is not only leaving the administration, but leaving the state.

And, as the Senate readies for impeachment trials for four current or former state Supreme Court justices for maladministration, news broke that four of 12 former secretary of state employees suing Secretary of State Mac Warner for wrongful termination on grounds of political party affiliation had settled their cases for a total of just under $1 million.

Warner’s reaction was peculiar: Instead of contrition, or focusing on the merits of the individual allegations, Warner tore into the state Board of Risk and Insurance Management (BRIM), the state’s casualty insurer, for what he saw as their over-eagerness to settle the cases out-of-court.

It’s sort of like a bank robber blaming the Federal Reserve for printing so much money.

In his letter to BRIM claims adjuster Robert Fisher calling on BRIM to stop settling the lawsuits, Warner contends he didn’t know the party affiliations of any of the people he fired or hired.

In what seems to be the slam-dunk heart of the case, when Warner took office in January 2017, he fired 16 employees, most of whom had between eight and 50 years of governmental service. Fifteen happened to be registered Democrats, one was independent. Despite the initial claims that the cut were in order to “streamline” the office, Warner subsequently hired 22 new employees, most with little or no government experience, 19 of whom were Republicans.

Additionally, 12 of the 16 fired employees were female; the vast majority of new hires were white males.

While all of the ex-employees suing Warner contend they were fired for political affiliation, a number of the complaints also allege gender discrimination, age discrimination, and/or racial discrimination.

In his Aug. 31 letter to Fisher, Warner says he did not know the political affiliation of anyone he fired or hired, stating, “Simply put, I hired based on competency and I terminated for lack of competency.”

At another point in the letter, Warner stated, “Yet, because so many employees from the previous administration were Democrats, nearly anyone I removed would, of course, be Democrat.”

I’ve covered the firings since before they were firings. During the transition, Warner gave a letter to outgoing Secretary of State Natalie Tennant listing the 16 employees to be fired, essentially asking her to notify the employees, presumably in hopes they would resign prior to his taking office.

How Warner was able to ascertain competency of the fired employees, who had a combined 200-plus years of experience, many of whom had survived several secretaries of state (including Democrats Tennant, Ken Hechler and Joe Manchin and Republican Betty Ireland), simply by reviewing resumes and conducting brief interviews, is difficult to fathom.

During those changes of administration among secretaries of state, there were no mass purges of employees. Nor did State Auditor J.B. McCuskey or Agriculture Commissioner Kent Leonhardt, both Republicans who took over from Democratic officeholders, conduct mass firings when they took office, along with Warner, in January 2017.

In his letter to BRIM, Warner fumes, “Any settlement in these cases sets a terrible precedent in several ways: It tells bad employees if they are fired for any reason to bring frivolous lawsuits, and drive up costs for the state — at a time when taxpayers are fed up with overpriced couches. Settlement encourages unethical behavior and the filing of frivolous lawsuits by money-grubbing plaintiff’s attorneys at the expense of the tax-paying public. And, ludicrous settlements to inept employees who should have been terminated for cause long ago are detrimental to the morale of current hard-working competent employees.”

Warner, who has already cost the state 31.25 Loughry couches, seemingly faces a daunting challenge in taking the remaining eight wrongful termination cases to court: In order to prevail, he will have to prove to a judge or jury that the fired employees were, in his words, “incompetent,” “bad,” “inept,” and “ineffectual.”

In my experience, attorneys and claims adjusters don’t settle cases out-of-court to avoid the extra workload or because they advocate “jackpot justice.” They weigh the odds of winning and losing in court, and the costs of going to trial, and act accordingly.

Meanwhile, now that the Legislature has lowered the standards for impeachment to maladministration and wasteful and lavish spending, what happens if the cost of Warner’s obstinance goes on to exceed 100 Loughry couches? It’s possible.

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That West Virginia was able to go from drafting legislation to establishing sports betting regulations to the live launch of sports betting in six months had attracted favorable coverage from gaming media as well as national publications such as Time magazine, with the state being heralded as a model for other states looking to legalize sports betting to follow.

In these dysfunctional days, far be it for any good publicity to go unpunished.

Just as sports betting was launching in Charles Town, Larrick abruptly resigned as Lottery director on the evening of Aug. 31. At the Lottery Commission meeting a couple of days earlier, Larrick had given no indication of his pending departure, telling colleagues about his plans to drive to Charles Town that Friday for the launch of sports betting at Hollywood Casino, and then to head to Charlotte for the WVU-Tennessee football game.

Then came word that general counsel Boyd, who had been instrumental in drafting and shepherding the sports betting rules to fruition, has been suspended indefinitely.

Legislators at an interim meeting Monday raised concerns that the common denominator between Larrick’s departure and Boyd’s suspension was that they had rebuffed Justice’s multiple attempts to change the rules to assure that professional sport leagues would get a cut of the sports betting revenue.

Boyd’s suspension is also evidence of Justice’s unwavering obsession with controlling the message in the media.

The tipping point, I’m advised, was not even an interview, but information she gave to the Gazette-Mail, reporting $320,631 of gross revenue from the first weekend of sports betting at Hollywood Casino.

The next day, the governor’s office put out a press release that in tone, seemed to be correcting the Gazette-Mail article, even though the information in the story wasn’t wrong. Justice noted that the first weekend had actually covered two reporting periods, and that the first official “week” of betting had generated gross revenue of $295,417, of which the state’s share (at a 10 percent tax rate) was only $29,541 — or not even a full Loughry couch.

Given Justice’s normal, “rah-rah” hyperbolic attitude, the release came off as a Debbie Downer, giving the impression that the first weekend of sports betting had been a disappointment. Which may well have been the intent, to imply that sports betting under-performed because of the failure of the Legislature and the Lottery to cooperate with the professional sports leagues.

So Boyd is being punished for (a) standing up to the Justice administration and refusing to bend on sports betting regulations, and (b) talking to reporters directly, instead of relaying communications through the Bray Cary consolidated press office.

If Boyd, who went to college on a Promise scholarship, worked her way through law school and decided to go into state government service instead of pursuing big money in corporate law or elsewhere, is forced out of government service because she crossed a politician with an oversized ego and irrational fear of negative coverage, then this state deserves to finish 49th or 50th in every category.

•••

Finally, legislative interim meetings used to be monthly affairs to allow legislators to work on draft legislation or get up to speed on current issues in the off-season.Last week, holding their only interim meetings over a five-month span, legislators heard from manufacturers and coal and natural gas industry representatives, calling for tax cuts (or at least no increases in taxes), and from anti-vaxxers who want to make it easier for parents to avoid immunizing their children.

Which doesn’t bode well for a productive 2019 session — pending, of course, what happens on Nov. 6.

Reach Phil Kabler at philk@wvgazettemail.com, 304-348-1220 or follow @PhilKabler on Twitter.

Funerals for Sunday, February 16, 2020

Atkins, Linda - 3 p.m., Fidler & Frame Funeral Home, Belle.

Call, James - 2 p.m., Chapman Funeral Home, Hurricane.

Hankins, Sara - 1 p.m., McGhee-Handley Funeral Home, West Hamlin.

Hensley, Joshua - 2 p.m., Evans Funeral Home & Cremation Services, Chapmanville.

Jackson, Jeffrey - 6 p.m., Lantz Funeral Home, Buckeye.

Jobe, Joe - 2:30 p.m., Sunset Memorial Park Mausoleum Chapel, South Charleston.

Johnson, Freda - 2 p.m., Kanawha Valley Memorial Gardens, Glasgow.

Ratcliff, James - 3 p.m., Curry Funeral Home, Alum Creek.