Buono Statement on Lottery Privatization Decision

For Immediate Release:


New Brunswick, NJ – Democratic gubernatorial candidate and State Senator Barbara Buono released the following statement in response to the Treasury Department’s decision to move the Governor’s reckless lottery privatization plan forward:

“Today’s decision is disappointing because the lottery was, by all accounts, operating exceptionally well in New Jersey. As the state’s fourth largest source of revenue, the lottery was responsible for funding essential programs for children, veterans and the disabled. However, under the Governor’s privatization plan, the essential revenue that these programs depend on will now be shared with a private company. Privatizing the lottery is an unnecessary risk at a time when New Jersey cannot afford any more setbacks.”

CWA To Appeal Christie Scheme To Illegally Award Lottery Functions To Politically-Connected, Foreign-Owned Firm

For Immediate Release:

Ignores Clear Legal Guidance from DOJ & NJ Constitution - Invites Lawsuit by Pushing Aside Objections

(TRENTON, NJ) “ Late yesterday, the Christie Administration brushed aside a challenge by the Communications Workers of America (CWA) that would have stopped the State from awarding control of sales and marketing of the New Jersey State Lottery to a politically-connected, foreign-owned, private firm. For months, Christie has consistently stonewalled the public regarding lottery monetization - which could cause at least 7,000 New Jersey jobs to be lost and ship a billion dollars of lottery revenue out of state and abroad. As such, the CWA and small businesses are left with no other alternative other than to oppose this illegal privatization scheme in court.

"Despite all his bluster about putting New Jersey first, Governor Christie is handing over the keys of a valuable taxpayer-owned asset to a foreign company with a clear history of fraud and abuse," said Seth Hahn, Legislative and Political Director for CWA. "Christie can claim it's a mere coincidence that the sole bidder hired his campaign manager and his campaign's lawyer as lobbyists last year - but New Jerseyans know better. Rather than working to make our award-winning lottery even stronger, Christie instead went out of his way to ignore clear legal guidance that every other state pursuing lottery privatization has followed. Christie stacked the deck against small business owners and taxpayers with this illegal scheme, ensuring that the matter will now be settled in the courts."

Last night, the Christie Administration announced via email that it was pushing aside the CWA protest of the intent to award the contract. The Department of Treasury can now move forward with awarding the contract - which could take a couple of days to finalize. This means it will be a few days before the public will even have access to the details about what is in the contract. This is simply the Christie Administration's latest move to keep things secretive. Throughout the process, the only information made available on the privatization scheme has been the result of heavily-redacted records obtained through Open Public Records Requests.

For the nearly eight months, the Christie Administration has steadfastly refused to answer basic questions about the monetization of the state's fourth-most valuable asset. The administration has ducked questions at hearings, press conferences and at every other turn. They announced the contract on Friday, April 12th at 4 pm in a continued bid to minimize public knowledge about the deal. Then, recently, a small hearing was held on the CWA's protest of the award - mostly out of the public's eye, again on a Friday afternoon and only allowing two people from CWA to attend.

The contract between the State and Northstar New Jersey Lottery Group violates the original intent and meaning of the New Jersey Constitution, as well as state law - which specifically called for establishing a lottery to be operated by the state. In other words, the constitution requires the lottery be operated publicly so private enterprises cannot damage the public's trust through even the faintest whispers of corruption. Yet, this deal allows a private company to have the lion's share of operational control over what was always intended to be a state-run lottery.

Last month, six members of New Jersey's Congressional delegation sent a letter to U.S. Attorney General Eric Holder asking the Department of Justice to review the contract. These House members are worried the contract runs counter to a 2008 DOJ opinion which advised that such payments have a corrupting nature and run contrary to the public interest, and therefore likely run afoul of longstanding Federal law. Every state that has moved to privatize portions of its state lottery up to this point has followed the recommendations in the memo. Christie will be the first governor to ignore the guidance of the DOJ.

The Northstar partnership consists of three groups. One is Italian-owned, one's Canadian, and the other hails from Georgia. This partnership includes GTECH,  which has a checkered history of fraud, bribery and corruption stretching from Texas to Rhode Island to New Jersey. In fact, Lieutenant Governor Kim Guadagno prosecuted GTECH's national sales director for a kickback scheme in New Jersey in the 1990s when she was in the U.S. Attorney's Office. In her prosecution, Guadagno argued the firm's corruption was so rampant that the state needed to throw the book at the GTECH official. Guadagno felt so strongly that she released sealed grand jury testimony to the media - a highly unusual step for which she was reprimanded by the New Jersey District Court.

Last year, Christie conducted a study about how to make New Jersey's lottery even better. It showed our award-winning system was one of America's best-run public lotteries - ranking 5th in per capita sales. Growth in online, instant and total sales all far exceeded the national average. In 2010, it had the highest net income margin, making New Jersey our nation's most efficient lottery. Looking at all this information, Christie made the shocking decision to turn sales and marketing functions over to a foreign private corporation. Even worse, despite a 42% growth in sales in the last decade, Northstar will get a cut of profits, up to 5% - if they increase sales just 9% over the next 15 years.

Northstar New Jersey Lottery Group is nearly identical to the firm running the show in Illinois. Following that takeover's first year, they admitted being over $100 million short of revenue projections. The firm then entered into a legal process with the State of Illinois claiming taxpayers owed them $230 million. In just the first half-decade of the contract, they now estimate being $250 million short of revenue estimates.

Aside from being illegal, this scheme is simply bad policy. With nearly one in ten New Jerseyans already out-of-work, lottery privatization is a bad deal - which would make foreign corporations rich while making things worse for taxpayers and small businesses. The Asian American Retailers Association estimates Christie's privatization deal could result in 7,000 jobs lost and that's their conservative estimate. Also, the Christie administration says Northstar New Jersey Lottery Group could earn $1 billion over the life of the contract - meaning a large chunk of lottery profits will be shipped out-of-state and overseas, instead of staying here at home. Moreover, as part of the deal, the state will receive a one-shot, upfront $120 million payment from Northstar. This gimmick has already been taken into account along with other rosy revenue projections for the latest Christie budget proposal.

With all these damning facts coming to light, it's no surprise the Christie Administration has consistently ducked questions and released precious little information on lottery privatization from throughout this process. CWA knows it is clear from what scant details do exist that the contract is illegal, and, as such, will be going to court to appeal.

Statement on Christie Veto of Lottery Privatization Oversight Bill

WASHINGTON, D.C.—Congressman Frank Pallone, Jr. (NJ-06) issued the following statement upon New Jersey Governor Chris Christie’s veto of a bill allowing legislative oversight over state’s plan to privatize lottery operations:

“Governor Christie’s decision to veto a bill that would have allowed important oversight over the impending privatization of New Jersey’s lottery is disturbing and speaks even more clearly of the need for such legislation. New Jersey’s lottery is a $2.6 billion enterprise and Governor Christie’s veto is a step in wrong direction to ensuring transparency over the process. I thoroughly disagree with the Governor’s decision and I will continue to remain committed to ensuring that this process is in complete compliance with federal law.

“That’s why, along with five of my colleagues, I signed on to a letter last month to U.S. Attorney General Eric Holder requesting a review of New Jersey’s lottery privatization plan by the Department of Justice. Now that the Governor has vetoed legislation that would have provided critical oversight, it is even more imperative that federal government examine this process.”

CWA Files Protest to Christie Administration's Illegal Lottery Privatization Scheme

For Immediate Release:

Plan To Award Contract to Shady Private Firm Violates NJ Constitution

(TRENTON, NJ) - In response to the Christie Administration’s decision to award a 15-year contract to privatize the New Jersey State Lottery’s marketing and sales operations to Northstar New Jersey Lottery Group - the sole bidder with a questionable track record – the Communications Workers of America, AFL-CIO and CWA Locals 1033 and 1037 sent a letter of protest to the NJ Department of Treasury.

"We already know that Christie’s lottery privatization is going to cost jobs, send profits overseas and be a horrible deal for taxpayers. The sad fact is that this scheme is also illegal,” said Seth Hahn, Legislative and Political Director for CWA NJ. “The Christie Administration wants to award an extremely profitable public asset to a politically-connected firm with a history of fraud and abuse. To make matters worse, this inside deal clearly violates the New Jersey State Constitution and betrays the public interest.”

Among other things, the contract violates the original intent and meaning of the New Jersey Constitution, as well as state law - which specifically called for establishing a lottery to be “operated by the state.” In other words, the constitution requires the lottery be operated publicly so private enterprises cannot damage the public’s trust through even the faintest whispers of corruption. Yet, this deal allows a private company to have the lion’s share of operational control over what was always intended to be a state-run lottery.

As part of the deal, the state will receive a one-shot, upfront $120 million payment from Northstar. CWA’s protest letter comes one day after 6 members of New Jersey’s Congressional delegation sent a letter to U.S. Attorney General Eric Holder asking the Department of Justice to review the contract. These House members are worried the contract runs counter to a 2008 DOJ opinion which advised that such payments have a corrupting nature and run contrary to the public interest, and therefore likely run afoul of longstanding Federal law.

The Northstar partnership consists of three groups. One is Italian-owned, one’s Canadian, and the other hails from Georgia. This partnership includes GTECH – which has a checkered history of fraud, bribery and corruption stretching from Texas to Rhode Island to New Jersey. In fact, Lieutenant Governor Kim Guadagno prosecuted GTECH’s national sales director for a kickback scheme in New Jersey in the 1990s when she was in the U.S. Attorney’s Office. In her prosecution, Guadagno argued the firm’s corruption was so rampant that the state needed to throw the book at the GTECH official. Guadagno felt so strongly that she released sealed grand jury testimony to the media, a highly unusual step for which she was reprimanded by the New Jersey District Court.

Last year, Christie conducted a study about how to make New Jersey’s lottery even better. It showed our award-winning system was one of America’s best-run public lotteries - ranking 5th in per capita sales. Growth in online, instant and total sales all far exceeded the national average. In 2010, it had the highest net income margin – making New Jersey our nation’s most efficient lottery. Looking at all this information, Christie made the shocking decision to turn sales and marketing functions over to a foreign private corporation. Even worse, despite a 42% growth in sales in the last decade, Northstar will get a cut of profits – up to 5% - if they increase sales just 9% over the next 15 years.

Northstar New Jersey Lottery Group is nearly identical to the firm running the show in Illinois. Following that takeover’s first year, they admitted being over $100 million short of revenue projections. The firm then entered into a legal process with the State of Illinois claiming taxpayers owed them $230 million. In just the first half-decade of the contract, they now estimate being $250 million short of revenue estimates.

Aside from being illegal, this scheme is simply bad policy. With one in ten New Jerseyans already out-of-work, lottery privatization is a bad deal which would make foreign corporations rich while making things worse for taxpayers and small businesses. The Asian American Retailers Association estimates Christie’s privatization deal could result in 7,000 jobs lost – and that’s their conservative estimate. Also, the Christie administration says Northstar New Jersey Lottery Group could earn $1 billion over the life of the contract - meaning a large chunk of lottery profits will be shipped out-of-state and overseas, instead of staying here at home.

It’s no surprise that the Christie Administration has consistently ducked questions and released precious little information on lottery privatization from the start. For the past seven months, Christie has taken the position that it would be inappropriate to answer questions about the monetization of the state’s fourth-most valuable asset. The Administration has refused to answer questions at hearings, press conferences and at every other turn. Then at 4 p.m. last Friday, April 12th, they announced the contract in a continued bid to keep things quiet and minimize public knowledge about the deal.

Unfortunately for New Jersey residents, the deck has been stacked from the beginning. This privatization scheme will undoubtedly harm New Jersey’s small business owners, taxpayers and fiscal health. Not only is it illegal, but it could also cost our state thousands of jobs and hundreds of millions of dollars.

CWA RELEASES TV COMMERCIAL: Tell Governor Christie To Stop His Lottery Privatization Scheme

Could Cost 7K NJ Jobs & Ship Profits Overseas to Foreign Corporations

(TRENTON, NJ) – Today, the Communications Workers of America (CWA) launched a six-figure ad campaign to educate New Jersey residents about Governor Chris Christie’s short-sighted scheme to privatize the state lottery. The television commercial will run as a statewide cable buy for the next few weeks. You can view the :30 second spot – entitled “Bad” below.

“Even though New Jersey has an efficient, award-winning lottery, Governor Christie is stubbornly seeking to privatize it. This is a big gamble in terms of both job loss and our state’s economy,” said Seth Hahn, Legislative and Political Director for CWA NJ. “With one in ten New Jerseyans already out-of-work, lottery privatization is a bad deal which would make foreign corporations rich while making things worse for taxpayers and small businesses.”

Only a single bid to run sales and marketing functions of the state lottery was submitted on December 27, 2012, and it was by a partnership consisting of three groups. One is Italian-owned, one is Canadian, and the other is from New York. The Christie administration estimates that $1 billion or more could go to the company over the life of the contract - meaning New Jersey dollars will be sent out-of-state and overseas.

To increase sales, the playing field will be tilted away from Main Street and small businesses and towards big boxes and chain stores. In fact, the Asian American Retailers Association (AARA) estimates the privatization scheme could result in 7,000 New Jersey jobs lost. AARA estimates local lottery vendors will lose a third of sales in the first year alone. Moreover, they’ll lose secondary sales that come with the purchase of lottery tickets - such as newspapers, coffee and other daily-purchased items. In other words, a politically-connected foreign corporation would rake in profits, while New Jersey’s local businesses would lose both revenue and jobs.

“Rather than stripping customers away from small businesses at a time when our state has the nation’s fourth worst unemployment, the governor should be working to make the lottery even stronger with dedicated public employees,” said Hahn. “We’re willing to roll up our sleeves and get this done if Governor Christie is, too.”

As part of the push to privatize, Governor Christie commissioned a study that showed how New Jersey’s award-winning lottery was one of the nation’s best-run public lotteries. The study found that our lottery had the highest net income margin in the country – making New Jersey America’s most efficient lottery. It ranks 5th in per capita sales, while online, instant and total sales growth have all far exceeded the national average. Nonetheless, Christie is still making the shocking decision to turn sales and marketing functions over to a foreign private company. Even worse, despite a 42% growth in sales from 2000-2010, this politically-connected firm will get a cut of profits if it increases sales a mere 9% over the next 15 years. The arrangement will also put taxpayers on the hook if the State wants out of the bad deal.

Just as the Christie administration has ducked questions on Ash Britt and Superstorm Sandy clean-up contracts, it has also refused to answer questions about plans for the lottery. In Pennsylvania, Republican Governor Tom Corbett was up-front regarding how their new lottery would function, and what, if any regulations would be changed to accommodate the new vendor. However, the Christie administration has repeatedly refused to answer basic questions, even rejecting invitations from the Assembly Budget Committee on two occasions. These rebuffs led the New Jersey State Assembly to seek subpoena power over executive branch officials on issues with significant budget impacts.

Today, the New Jersey Senate’s State Government Committee is discussing two pieces of legislation on the matter in Trenton. One bill requires legislative approval for private operation of the state lottery. The second is a resolution calling on Governor Christie to seek legal counsel from the Department of Justice before awarding the contract.

For more information on lottery privatization and efforts to stop it, please visit www.BigGambleNJ.com

Privatization Is Not The Answer

From the E-Newsletter of Congressman Rush Holt:

In 1935, being old generally meant being poor.  Yet today, only one in ten American seniors lives in poverty.  Indeed, seniors today are less likely than Americans in any other age group to live in poverty.

What is responsible for this turnaround?  The answer, of course, is Social Security, which marked its 77th anniversary last week.  In its nearly eight decades of existence, Social Security has lifted tens of millions of Americans out of poverty – including about 13 million today.  Social Security also assists many with disabilities and many children who survive the loss of a parent, as I did.

Although you would not know it from the hyperbole in Washington today, Social Security has never missed a payment and remains in pretty good financial shape. According to the two independent trustees overseeing the Social Security and Medicare programs, without any changes at all, the Social Security program can pay all benefits through at least 2036.  Even after that, it could still pay out about 77 percent of scheduled benefits.  

(Congressman Rush Holt)

This modest long-term shortfall in Social Security is a good reason to take steps to shore up the program.  Yet those who would use these challenges as an excuse to privatize Social Security, as Rep. Paul Ryan and others have proposed in recent years, are simply fear-mongering in hopes of advancing their impractical ideology.  Worse still, they are threatening the guarantee that is at Social Security’s heart.

As President Franklin D. Roosevelt said shortly after Social Security was created, “None of the sums of money paid out to individuals in assistance or in insurance will spell anything approaching abundance. But they will furnish that minimum necessity to keep a foothold; and that is the kind of protection Americans want.”

Ethnic Profiling Remains Ineffective and Offensive

In May, I wrote to you about the New York Police Department’s wide-scale, warrantless surveillance of innocent Muslims in states across America.  Muslims in New Jersey have told me that they felt the chill and intimidation from such profiling.

As I have said, profiling is a poor substitute for thinking, and it does not constitute good policing.  Now, there is evidence that the NYPD’s tactics were wholly ineffective.  As the Associated Press reported this week, the NYPD has acknowledged in court testimony that its six years of spying on Muslims never produced a lead or triggered a terrorism investigation.

Spending limited law enforcement resources profiling the innocent rather than investigating the guilty is not just wasteful; it presumes a separate class of Americans who can be placed under suspicion in the absence of reasonable, specific evidence, violating fundamental national principles of liberty and equality. 

Thank You to Congressional Interns for Summer 2012

This month, the latest group of Congressional interns in my West Windsor and Washington, D.C. office finished their service.  It was a pleasure to welcome these interns to my staff, and I was impressed by their intelligence, willingness to learn, and commitment to public service.

If you are a high school or college student interested in interning in my office, please visit my website to learn more.

Sincerely,

Rush Holt
Member of Congress

P.S. Just a reminder: I always want to hear from you, but to ensure a prompt response, please don’t reply to this e-mail.  Instead, please visitholt.house.gov/contact or call 1-87-RUSH-HOLT (1-877-874-4658).

Rep. Pallone on the 77th Anniversary of Social Security

For Immediate Release:

Aug 14, 2012 

LONG BRANCH, NJ – Congressman Frank Pallone, Jr. (NJ-06) today released the following statement to mark the 77th anniversary of the Social Security Act being signed into law, thus providing millions of seniors with retirement security:

“Today marks the 77th anniversary of Social Security, and it is an important opportunity for all Americans to reaffirm our commitment to protecting and strengthening this critical program for future generations. The Social Security Act, signed into law by President Roosevelt, launched one of the most successful programs in American history, enabling seniors to retire with dignity, disabled workers and their families to support themselves and families who lost a loved one to live securely. 

“Social Security is based on the promise that hard working Americans who contribute to the system will be able to rely on its benefits when they are needed. However, the Romney-Ryan agenda seeks to break this promise to our seniors by privatizing Social Security and slashing its benefits. This is not only unnecessary, since Social Security is solvent and will end the year with a $2.7 trillion surplus, it will put seniors’ retirement income at risk and threaten the economic security of millions of Americans. I will continue to fight against such proposals in order to preserve and improve Social Security for the future.”