HARRISBURG, Pa. (AP) — Pennsylvania Attorney General Kathleen Kane on Thursday rejected a long-term contract sought by Gov. Tom Corbett that would let a British firm manage the $3.5 billion Pennsylvania Lottery, saying parts of it contravene the state constitution and other parts are not authorized by state law.
Her politically fraught decision came after Corbett undertook a nine-month process to find and hire a private company to replace state employees atop one of the nation's largest lotteries. Corbett, who had endured months of criticism about the policy and process from Democrats, settled on London-based Camelot Global Services, the United Kingdom's official lottery operator.
Kane read a short statement at news conference at her Harrisburg office, but declined to take questions from reporters.
"It is important that my office perform its role in the system of checks and balances that our government desperately needs and that our citizens deserve," she said.
Corbett and Camelot each later released statements saying they were disappointed. Corbett also reiterated that his motivation is to ensure that lottery profits keep pace with rising demand for programs for senior citizens that the lottery funds.
For now, it seems the lottery will remain managed by state employees. It's not clear what will happen next with the contract.
Corbett can challenge Kane's decision in court, but would only say Thursday that he did not agree with the attorney general's analysis and was reviewing his legal options. Camelot's bid expires Saturday, and it would not say Thursday whether it will agree to extend it.
House Republican leaders said they expected that the Legislature will review Kane's decision, while Democrats and labor unions were effusive.
Sen. John Yudichak, D-Luzerne, criticized Corbett's "misguided plan to privatize one of our most consistent and predictable sources of revenue." Rep. Mike Sturla, D-Lancaster, called the contract "ill-conceived" and riddled with loopholes and liabilities.
Successfully shifting lottery management to Camelot is a key test on privatization for Corbett, who promised when he ran for governor that he would look to privatize state services.
Meanwhile, the rejection is likely to fuel animosity to the relationship between Corbett, a Republican, and Kane, a Democrat who has been in office barely four weeks.
Kane ran on a pledge last year to be an independent voice and to investigate how the attorney general's office under Corbett handled the child sexual abuse investigation into former Penn State assistant coach Jerry Sandusky in 2009 and 2010.
The attorney general's office reviews state contracts for form and legality.