Chicago Tribune investigation shows $2 million being spent on bonuses for the state lottery’s outgoing management firm

Chicago Tribune investigation shows $2 million being spent on bonuses for the state lottery’s outgoing management firm

Despite being axed for bad performance, and in some cases not even doing its job, Northstar Lottery Group is collecting millions in fees and bonuses.

A Chicago Tribune investigation has revealed that taxpayers have spent $2 million on retention bonuses for the Illinois State Lottery’s outgoing private managing firm, despite the firm performing so badly that the state is prematurely ending its contract. Northstar Lottery Group, the managing firm of the lottery, is slated to end its 10-year contract with the state early thanks to a 2015 agreement. However, the agreement states that the state is required to pay out lucrative “disentanglement fees” which include retention bonuses to Northstar without any performance requirement, the Tribune reported. This means that regardless of how Northstar performs in its managerial duties, taxpayers have to shell out millions.

The Tribune also reported that an unknown number of Northstar employees were offered 30 to 50 percent of their base pay as a bonus, with the bonus increasing to 60 percent for those working the first six months of the year.

Illinois was the first state in the country to privatize management of its state lottery, when it granted Northstar Lottery Group a 10-year, contract in July 2011.

After failing to deliver on promises of higher revenues, the state tried to get out of the deal in 2015. Northstar performed so poorly in its managerial function that another Tribune investigation in December 2016 revealed that some lottery winners were not even paid. Under a new deal negotiated between the state and Northstar, the state agreed to pay disentanglement fees, which included bonuses to Northstar employees.

The Illinois Lottery at first did not have exact records of how the money was dispersed to Northstar, but later provided heavily redacted records, according to the Tribune.

Though much of the information was redacted, some details remained including traveling, dining and lodging costs. The details show that Northstar spent taxpayer dollars on furniture for empty apartments and high-priced steakhouse dinners. One Northstar employee spent $200 on a dinner meeting with no receipt explaining the cost, according to the Tribune. The meal allowance limit for state employees is $17.

Taxpayers on the hook for mismanagement – the lottery is just one example

The Chicago Tribune’s disturbing findings are a perfect example of the blatant disregard for taxpayer dollars that Springfield has shown for years. Under the Quinn administration, the state lottery became into a slush fund for Northstar. The Rauner Administration had to agree to costly terms in getting out of the deal, all at the expense of taxpayers. Northstar did its job so poorly that it in many instances, it didn’t even pay out lottery winners. And rather than be transparent about how it spent taxpayer dollars, Northstar opted to protect themselves and hide essential bonus figures on employee payment records.

Northstar needs to be held to account for their actions, but so does the state government. The state brought Northstar in in the first place and put taxpayers into the compromising position they are in currently. Springfield needs to be held to account for the way it spends taxpayer money, and the Northstar case is only one example. Illinois has a nearly $12.5 billion bill backlog, $8 billion deficit and $130 billion in unfunded state pension liabilities. For years, state officeholders have been throwing around tax dollars with no accountability, giving unsustainable, unfair, sweetheart deals to a select few, while the rest of the state suffers.


Clarification: An earlier version of this article stated that Northstar was given a no-bid contract. Northstar was given a contract, but it was not a no-bid contract. Northstar did award no-bid subcontracts, according to the Chicago Tribune’s report.

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