Did the gaming board’s two-year revolving-door bar prevent a regulator from leading the state lottery corporation?

Plain-English summary

In September 1998, Connecticut’s AG advised the acting executive director of the Division of Special Revenue that § 12-557d(c) did not bar him from taking a job as president and CEO of the Connecticut Lottery Corporation. He sat on the Gaming Policy Board as an ex officio member, and the statute prohibited board members from working for a regulated “business organization” for two years after service. Although the lottery corporation was regulated by the division, the AG read “business organization” as covering business-type entities, not this public instrumentality and political subdivision of the state.

The AG pointed to the lottery corporation’s statutory public purpose, state ties and board appointments. His conclusion addressed that one revolving-door provision, not a general exemption from ethics rules. A footnote said the lottery president was still treated as a state employee for state ethics-code purposes. The opinion did not approve every possible transaction between the former regulator and the corporation.

Agency and lottery officials at the time

The named two-year bar did not prevent the described move because of the corporation’s public status. Other ethics duties remained a separate question.

Ethics staff at the time

The answer depended on the statutory definition of “business organization” and the lottery corporation’s legal structure, not simply on whether the division regulated its activity.

Currency note

This opinion was issued in 1998. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Was the lottery corporation regulated by the division?
A: Yes. The AG acknowledged that, but found it was not a business organization for this bar.

Q: Did the two-year restriction block the proposed CEO role?
A: The AG said no under § 12-557d(c).

Q: Was the lottery president outside all state ethics rules?
A: No. The opinion’s footnote described the president as a state employee for ethics-code purposes.

Background and statutory framework

The acting director asked about leaving his agency to head the lottery corporation. The AG compared the revolving-door statute with the law establishing the corporation as a quasi-public state entity.

Citations and references

Statutes: Conn. Gen. Stat. § 12-557d(c); Conn. Gen. Stat. § 12-802(a).

Source

• Landing page: https://portal.ct.gov/AG/Opinions
• Opinion page: https://portal.ct.gov/ag/opinions/1998-formal-opinions/mr-george-f-wandrak-division-of-special-revenue-1998018-formal-opinion-attorney-general-of-connectic

Original opinion text

Mr. George F. Wandrak, Division of Special Revenue, 1998-018 Formal Opinion, Attorney General of Connecticut

Attorney General's Opinion

Attorney General Richard Blumenthal

September 28, 1998

Mr. George F. Wandrak

Acting Executive Director

Division of Special Revenue

555 Russell Road

Newington, CT 06111

Dear Mr. Wandrak:

This is in response to your request for an opinion on whether the "revolving door" limitation of Conn. Gen. Stat. § 12-557d(c) applies to you if you resign as Acting Executive Director of the Division of Special Revenue to accept a position as President and Chief Executive Officer of the Connecticut Lottery Corporation (CLC). For the following reasons, we believe that this statutory limitation would not apply.

This opinion is based upon the following facts: You have been employed by the Connecticut Division of Special Revenue in a variety of capacities for a number of years. Since January 16, 1997, you have held the position of Acting Executive Director of the Division and, as such, you serve on the State Gaming Policy Board as an ex officio member, without voting rights, pursuant to Conn. Gen. Stat. § 12-557d(a). On July 10, 1998, you submitted your application for the position of President and Chief Executive Officer of the CLC.

The statutes applicable to Gaming Policy Board members include a "revolving door" limitation, which provides:

No board member shall accept any form of employment by a business organization regulated under this Chapter for a period of two years following the termination of his services as a board member.

Conn. Gen. Stat. § 12-557d(c).

The CLC is regulated by the State Division of Special Revenue. Conn. Gen. Stat. § 12-568a. However, whether this limitation applies to you depends upon whether the CLC is a "business organization." This term is defined as, ". . . a partnership, incorporated or unincorporated association, firm, corporation, trust or other form of business or legal entity, other than a financial institution regulated by a state or federal agency which is not exercising control over an association licensee." Conn. Gen. Stat. § 12-557b.

In a previous Opinion on a similar topic, we concluded that this definition limits the applicability of the rule to business-type entities, and not governmental entities. See, 1997 Conn. Op. Atty. Gen. 97-002 (January 28, 1997) (Revolving door limitation does not apply to Mashantucket Pequot Tribal Gaming Commission)1 Attachment A. The CLC is a "body politic and corporate, constituting a public instrumentality and political subdivision of the State created for the performance of an essentially governmental revenue-raising function . . . ." Conn. Gen. Stat. § 12-802(a). The employees are State employees, Conn. Gen. Stat. 12-805(c), except for the President, Conn. Gen. Stat. 12-805(a)2, and excess lottery funds are remitted to the General Fund of the State of Connecticut. Conn. Gen. Stat. § 12-806(b)(22). Clearly, the CLC is not a business entity within the contemplation of the revolving door rule. It is a quasi-public entity. Conn. Gen. Stat. § 1-120(1).

Moreover, applicability of the revolving door rule would hardly foster a separation of relationships in this instance. Two State officials are required, by statute, to serve on the Board of Directors of the CLC; the Governor, with the advice and consent of the General Assembly, appoints five directors; six are appointed by legislative leaders, and you were required, by law, to sit on the board until June, 1997. Conn. Gen. Stat. § 12-802(b)3.

In light of these prior and on-going interrelationships between the State and the CLC, inclusion of the CLC in the definition of the term "business organization" would need to be unmistakably expressed before we could conclude that it is included. Absent such expression, we cannot construe the language of the statute to make it applicable. "[T]he intent of the legislature is to be found not in an isolated phrase or sentence but, rather, from the statutory scheme as a whole." State v. Breton, 235 Conn. 206, 226, 663 A.2d 1026 (1995). In this context the statute cannot be construed to be applicable.

For all the foregoing reasons, we conclude that the revolving door limitation set forth in Conn. Gen. Stat. § 12-557d(c) does not bar you from accepting the position of President and Chief Executive Officer of the Connecticut Lottery Corporation.

Very truly yours,

RICHARD BLUMENTHAL

ATTORNEY GENERAL

Robert F. Vacchelli

Assistant Attorney General

RB/RFV/gab

Footnote:

1 At the recommendation of this office in that opinion, the legislature amended the State Ethics Code to prevent this activity in the future. See 1997 Conn. Pub. Acts No. 97-6, Sec. 13 (June 18 Sp. Sess.)

2 However, the President is still considered to be a State employee for purposes of an applicability of the State Code of Ethics. See Ethics Commission Letter dated July 27, 1998. Attachment B.

3 Conn. Gen. Stat. § 12-802(b) provides, in pertinent part, as follows:

(b) The corporation shall be governed by a board of thirteen directors. The Governor, with the advice and consent of the General Assembly, shall appoint four directors who shall have skill, knowledge and experience in the fields of management, finance or operations in the private sector. Three directors shall be the State Treasurer, the Secretary of the Office of Policy and Management and the executive director of the Division of Special Revenue, all of whom shall serve ex officio and shall have all of the powers and privileges of a member of the board of directors. Each ex-officio director may designate his deputy or any member of his staff to represent him at meetings of the corporation with full power to act and vote on his behalf. The executive director of the Division of Special Revenue shall cease to be a director one year from June 4, 1996, or earlier at the discretion of the Governor. The Governor, with the advice and consent of the General Assembly, shall fill the vacancy created by the removal or departure of the executive director of the Division of Special Revenue with a person who shall have skill, knowledge and experience in the fields of management, finance or operations in the private sector. The governor shall thereafter have the power to appoint a total of five members to the board. The procedures of section 4-7 shall apply to the confirmation of the Governor's appointments by both houses of the General Assembly. Six directors shall be appointed as follows: One by the president pro tempore of the Senate, one by the majority leader of the Senate, one by the speaker of the House of Representatives, one by the majority leader of the House of Representatives and one by the minority leader of the House of Representatives. Each director appointed by the Governor shall serve at the pleasure of the Governor but no longer than the term of office of the Governor or until the director's successor is appointed and qualified, whichever term is longer. Each director appointed by a member of the General Assembly shall serve in accordance with the provisions of section 4-1a.