1 1 2 3 * * * * * * * * * * * * * * * * * 4 5 TEXAS LOTTERY COMMISSION 6 MEETING 7 8 SEPTEMBER 27, 2002 9 10 * * * * * * * * * * * * * * * * * 11 12 13 14 15 16 17 18 BE IT REMEMBERED that the TEXAS LOTTERY 19 COMMISSION meeting was held on the 27TH of SEPTEMBER, 20 2002, from 1:35 p.m. to 4:37 p.m., before DAVID 21 BATEMAN, RPR, CSR in and for the State of Texas, 22 reported by machine shorthand, at the Offices of the 23 Texas Lottery Commission, 611 East Sixth Street, 24 Austin, Texas, whereupon the following proceedings 25 were had: Wright Watson STEN-TEL (512) 474-4363 2 1 APPEARANCES 2 3 Chairman: Mr. C. Tom Clowe, Jr. 4 5 Commissioners: Ms. Elizabeth D. Whitaker 6 Mr. James A. Cox, Jr. 7 General Counsel: 8 Ms. Kimberly L. Kiplin 9 Charitable Bingo Operations Director: 10 Mr. Billy Atkins 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Wright Watson STEN-TEL (512) 474-4363 3 1 INDEX 2 3 Appearances...................................... 2 4 AGENDA ITEMS 5 Item Number 1.................................... 4 6 Item Number 2.................................... 4 Executive Session................................ 8 7 Item Number 3.................................... 8 Item Number 4.................................... 11 8 Reporter's Certificate........................... 12 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Wright Watson STEN-TEL (512) 474-4363 4 1 SEPTEMBER 27, 2002 2 CHAIRMAN CLOWE: The Texas Lottery 3 Commission will come to order. It is 1:35 p.m. Today 4 is Friday, September the 27th, 2002. I am Tom Clowe. 5 Commissioner Whitaker is here. Commissioner Cox is 6 here. 7 We are here to deal with the issue of 8 the resignation of our executive director, Linda 9 Cloud. We have received a letter of resignation from 10 Ms. Cloud. We will be happy to make it available to 11 any of you who wish to have a copy of it. 12 I would like to say that I wish 13 Ms. Cloud well on her future endeavors and we are 14 appreciative of her efforts here at the Commission 15 over a period of 10 years that she was here and almost 16 five years as executive director. 17 Now I would like to address the poise of 18 the Commission. I have spent a good deal of this 19 morning visiting with the directors of the Commission, 20 the executive management of the Commission, and I 21 would like for those in that group to be available 22 following the return of the Commission from its 23 executive session and the adjournment of this public 24 session if they're available. 25 What we're dealing with here today is a Wright Watson STEN-TEL (512) 474-4363 5 1 change in leadership. And to the employees of the 2 Commission, that is an occasion that brings about 3 questions and oft times concerns. 4 It is the human nature to always wonder 5 what a change in leadership in an organization means 6 to each one as an individual. And so often, it's the 7 human trait to seize on negative concerns and worries. 8 And my role this morning in visiting with the 9 directors has been to answer their questions and to 10 urge them to communicate with all of the employees of 11 the Commission to express on behalf of myself the 12 confidence the Commission has in them. 13 I've spent a great deal of time with 14 many, many of the employees of the Commission's and I 15 know the work they do is excellent. It is extremely 16 important to me and I think for the other 17 commissioners that all the employees step up and work 18 with the new leadership, assuming the commissioners' 19 deliberations result in the naming of an acting 20 executive director, and help that individual, whoever 21 it may be, face the challenges that we have at this 22 time. 23 On Monday, this Commission has an LAR 24 hearing. We have the activities of the Sunset 25 Commission to deal with very shortly and a number of Wright Watson STEN-TEL (512) 474-4363 6 1 questions that we need to answer and deal with. And 2 then, of course, we have a legislative session that 3 will begin shortly. 4 We have announced that we intend to -- I 5 believe it's on the next Wednesday night drawing -- 6 reduce the opening jackpot, if the jackpot is hit 7 Saturday night, to three million dollars. There are 8 changes occurring at the Commission and there are good 9 reasons for all of those. 10 It is extremely important to us that all 11 of the employees of the Commission pull together and 12 to continue to do the excellent job that you have done 13 in the past during this change of leadership. 14 I want to express on behalf of the 15 commissioners the appreciation for the excellent job 16 that everyone is doing and I want to assure you that 17 the commissioners will do their job. 18 I am very gratified to be serving on 19 this board with Commissioner Whitaker and Commissioner 20 Cox. I have had the opportunity to deal with various 21 issues as a commissioner with them and I can assure 22 you they are involved, they are extremely bright and 23 they are tuned in to the needs of this agency. 24 I cannot think of a better qualified 25 group, myself excepted, to deal with this change of Wright Watson STEN-TEL (512) 474-4363 7 1 leadership issue. I can assure you that in our 2 meeting this afternoon, we will be diligent. We will 3 hope to come forth with a result. But regardless of 4 what the outcome of that is, we are eager to meet as 5 often as necessary to deal with the issues that are 6 our responsibility in regard to this leadership change 7 and we intend to do that. 8 At this time, I would like to move that 9 the Texas Lottery Commission go into executive session 10 to deliberate the employment of the executive director 11 pursuant to Section 551.074 of the Texas Government 12 Code to deliberate the appointment, employment and 13 duties of the acting executive director pursuant to 14 Section 551.074 of the Texas Government Code, to 15 deliberate the duties and reassignment of the internal 16 auditor, security director and/or general counsel 17 pursuant to Section 551.074 of the Texas Government 18 Code, to receive legal advice regarding pending or 19 contemplated litigation and/or to receive legal advice 20 pursuant to Section 551.071(1)(A) or (B) of the Texas 21 Government Code and/or to receive legal advice 22 pursuant to Section 551.071(2) of the Texas Government 23 Code, including but not limited to employment law, 24 personnel law and the general government law. 25 Is there a second? Wright Watson STEN-TEL (512) 474-4363 8 1 COMMISSIONER WHITAKER: Second. 2 CHAIRMAN CLOWE: All in favor, please 3 say aye. 4 COMMISSIONER WHITAKER: Aye. 5 COMMISSIONER COX: Aye. 6 CHAIRMAN CLOWE: Aye. 7 The vote is three, zero. The Texas 8 Lottery will go into executive session. The time is 9 1:43 p.m. Today is September the 22nd (sic), 2002. 10 MS. KIPLIN: Commissioner, I think I 11 might have heard you say September 22nd and it's 12 September 27th. I might have misunderstood you, 13 though. 14 CHAIRMAN CLOWE: September the 27th. 15 Thank you. If I misspoke, I'd like to correct that. 16 (Executive session from 1:43 p.m. to 4:31 p.m.) 17 CHAIRMAN CLOWE: The Texas Lottery 18 Commission is out of executive session and the time is 19 4:31 p.m. 20 I move to appoint Gary Grief acting 21 executive director of the Texas Lottery Commission 22 effective immediately with a salary of 105,000 per 23 year. 24 Is there a second? 25 COMMISSIONER COX: Second. Wright Watson STEN-TEL (512) 474-4363 9 1 CHAIRMAN CLOWE: All in favor, please 2 say aye. 3 COMMISSIONER WHITAKER: Aye. 4 COMMISSIONER COX: Aye. 5 CHAIRMAN CLOWE: Aye. 6 Opposed? No. 7 The vote is three zero in favor. 8 Mr. Grief, I don't know whether to offer 9 you congratulations or condolences. 10 MS. KIPLIN: Commissioner, I think it 11 might be appropriate for him to come forward and see 12 if he's willing to accept. 13 CHAIRMAN CLOWE: Kim, if you'll give me 14 that opportunity, I'll be happy to. 15 I'm quick, but I'm not that quick. 16 Mr. Grief, would you identify yourself 17 for the record and we would like to hear if you accept 18 the position and we would also like to have any 19 remarks you care to make. 20 MR. GRIEF: Certainly. For the 21 record -- for the record, my name is Gary Grief. And 22 I wholeheartedly accept the gracious offer of the 23 Commission. 24 I look forward to working with the very 25 capable and talented staff here at the Lottery Wright Watson STEN-TEL (512) 474-4363 10 1 Commission. We have a lot of work to do here at the 2 Commission, a lot of challenges, a lot of good things 3 ahead for us and I -- I accept the position. 4 Thank you very much. 5 CHAIRMAN CLOWE: Thank you. 6 COMMISSIONER WHITAKER: Thank you. 7 CHAIRMAN CLOWE: Thank you, Gary. 8 Is there any other business to come 9 before the Commission? 10 COMMISSIONER WHITAKER: Can I defer to 11 Kim? 12 CHAIRMAN CLOWE: I'll make a motion. 13 I move to accept the resignation of 14 Ms. Linda Cloud, executive director, and to allow her 15 to remain on the payroll to exhaust available leave, 16 including vacation leave and state compensation -- 17 compenso -- 18 MS. KIPLIN: Compensatory. 19 CHAIRMAN CLOWE: Compensatory leave. 20 Thank you. 21 Is there a second? 22 COMMISSIONER WHITAKER: Second. 23 CHAIRMAN CLOWE: All in favor, please 24 say aye. 25 COMMISSIONER WHITAKER: Aye. Wright Watson STEN-TEL (512) 474-4363 11 1 COMMISSIONER COX: Aye. 2 CHAIRMAN CLOWE: Aye. 3 Opposed? No. 4 The vote is three zero in favor. 5 I believe that concludes the business of 6 the Texas Lottery Commission for this emergency 7 meeting. The time is 4:33 p.m. 8 Thank you-all very much. 9 (Meeting adjourned at 4:33 p.m.) 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Wright Watson STEN-TEL (512) 474-4363 12 1 REPORTER'S CERTIFICATION 2 3 STATE OF TEXAS ) 4 COUNTY OF TRAVIS ) 5 6 I, DAVID BATEMAN, RPR, Certified Shorthand 7 Reporter for the State of Texas, do hereby certify 8 that the above-captioned matter came on for hearing 9 before the TEXAS LOTTERY COMMISSION as hereinafter set 10 out, that I did, in shorthand, report said 11 proceedings, and that the above and foregoing 12 typewritten pages contain a full, true, and correct 13 computer-aided transcription of my shorthand notes 14 taken on said occasion. 15 Witness my hand on this the 8TH day of 16 OCTOBER, 2002. 17 18 19 20 DAVID BATEMAN, RPR, 21 Texas CSR No. 7578 Expiration Date: 12-31-03 22 1609 Shoal Creek Boulevard, Suite 202 Austin, Texas 78701 23 (512) 474-4363 24 25 JOB NO. 020927DPB Wright Watson STEN-TEL (512) 474-4363