Illinois attorney general blocks Lottery's proposed agreement ending Northstar's contract

Illinois Attorney General Lisa Madigan rejected a proposed agreement ending the state's contract with the private vendor that ran the Illinois Lottery because of possible legal violations and the potential of higher fees, according to a letter made public Friday.

Former Gov. Pat Quinn directed the Lottery last year to end its dealings with Northstar Lottery Group part-way into a 10-year contract over performance concerns. Officials with Northstar, the Lottery and Quinn's office negotiated a deal to avoid costly lawsuits. The agreement was announced weeks before Quinn, a Democrat, left office. Republican Gov. Bruce Rauner, then a candidate, objected and said it was a bad deal for taxpayers.

Madigan's reasoning agreed in part. In a Jan. 16 letter to Lottery Director Michael Jones, Madigan said the agreement could result in more fees and expenses than previous years and that her office wasn't initially consulted.

"This office plans to continue its vigorous defense of this matter," she wrote.

According to the proposal, Northstar would have been reimbursed up to $12.65 million for costs. Two subcontractors would remain technical vendors until at least 2018 and provide services at a lower rate in the interim.

Madigan's involvement comes through litigation over public information requests to Northstar from two Chicago news outlets. The Chicago Tribune and Crain's Chicago Business sought a Northstar marketing study and business plan. The Chicago-based company tried to block the release by suing in the Illinois Court of Claims, a body of appointed judges who handle disputes involving the state. Madigan said the information should be made public, but Northstar attorneys said the state had to protect information deemed confidential.

Northstar officials didn't return a message Friday.

Officials with the Illinois Lottery directed questions to Rauner's office. His spokeswoman Catherine Kelly said in an email that "that this last-minute deal pushed by Pat Quinn was not in the taxpayers' best interest" and said Rauner would ensure future deals "maximize the public's benefit."

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