"I'm Not a Literal Speaker" 

Lottery chief Rebecca Paul explains the dubious statements that have people scratching their heads

Lottery chief Rebecca Paul explains the dubious statements that have people scratching their heads

There are many bizarre stories about Tennessee Lottery chief Rebecca Paul and her penchant for tall tales and storytelling license. But the one where she seems to have faked a cell phone call to impress a table of dinner guests may be her most notorious.

It was late June and Rebecca Paul was enjoying a dinner at Cibo's on Church Street with businessman Al Ganier, who'd wanted to meet her. A former crony of Gov. Don Sundquist, Ganier's Internet company twice received multimillion state contracts a few years ago sparking a federal investigation. At Ganier's request, state Sen. Steve Cohen was there, along with a few other friends of both men. Everyone was enjoying pleasant conversation when Paul brought up an upcoming Atlanta Journal Constitution story that was set to probe the lavish bonuses the Georgia Lottery handed out when Paul led the program. Paul defended the practice of incentive pay, noting that bonuses are necessary to make employees work harder. "How else would you get them to work after hours?" she asked her guests.

Cohen, the sponsor of the constitutional amendment that paved the way for the Tennessee Lottery, was an early fan of Paul's. In recent months though, he has grown more circumspect about both her spirited defense of incentive pay and her sometimes shaky claims. At the Tennessee Lottery, even an office assistant received a bonus. "I suggested to her that you get them to work by paying overtime, and if they didn't want to do that, you fire them," Cohen recalls.

But Paul stuck to her stance. She said that, at that very moment, she had 80 employees laboring for her on a software project. At first, some guests were impressed at Paul's appreciation for her employees' diligence, but as she continued to talk about their efforts, a few thought she belabored the point.

Someone at the table suggested that Paul order her employees some barbecue or pizza. She nodded in agreement, then pulled out her cell phone. Cohen and another person at the table who didn't want to be identified recall that Paul seemed to be ordering her underlings a pizza. An hour or so later, Paul made another call. "Did the pizza get there?" Cohen and the guest both heard her say.

"Something about this didn't smell right," Cohen recalls. So he took a short drive from downtown to the lottery's offices in MetroCenter to check up on the 80 employees himself. "There was no one there, no lights on, only a few cars in the garage and a few in the parking lot. I asked myself, 'what's going on here?' This is too bizarre."

On July 14, during a brief exchange at a legislative hearing, Cohen recalled the evening and asked Paul what her employees were doing the night they all had dinner a few weeks back. She said that about 80 people were working on the software project, but that some of them worked for G-Tech, a vendor. Some of the staff were spread out at a backup site in Austin, Texas, a few worked at her home and others were at the MetroCenter offices. Cohen finally told an unsuspecting Paul that he went to MetroCenter that evening and saw nobody in the program's offices. "I couldn't figure out how 80 people were eating pizza," he said testily, and the exchange was over.

Shortly after the meeting, though, Paul again approached Cohen and said that the employees didn't show up at the MetroCenter office until after midnight. That's why nobody was there, she said. So, then, what's the deal with the pizza? "She changed her story to make it fit," Cohen tells the Scene.

While the pizza story may seem meaningless, it's nevertheless mind-boggling. Was she really pretending to order a pizza to paint a picture of herself as a beneficent boss? The Scene asked Paul to shed light on Cohen's story and to explain how this might be either a misunderstanding or a case of Cohen distorting the truth.

"I really don't want to get into a 'he said, she said,' debate," Paul said. But why were there no employees when Cohen went to the lottery headquarters? They didn't arrive there until 1 a.m., she said. What about the pizza? Did you make a call from the dinner table? First, Paul said no. Then she backtracked. "I may have called and asked about a pizza. I have no idea. I'm sorry if there was a misunderstanding."

As a side note, after Paul's exchange with the legislative committee, her staff bought her flowers. "I think they thought I had a bad week," she laments. Two sources say that, upon receiving the flowers, Paul told her staff, "don't let the bastards get you down," referring to the legislators who created her job. Paul denies ever saying that.

If Paul's pizza story were her only "I did not have sex with that woman" moment, it could probably be chalked up to a natural outgrowth of a playful, quirky personality. But Paul's clashes with the truth are frequent. Late last month, she served as a Rotary Club speaker at a Kingsport, Tenn., hotel. In a story in the Johnson City Press headlined, "Paul says state's lottery wasn't sure thing when she took helm," the lottery chief is quoted as saying that when she came to Tennessee, the program had no momentum. "When I started, there were no paper clips, no chairs, no offices," she said, portraying herself as some sort of lottery MacGyver.

Actually, by the time Paul was officially hired, the Tennessee Lottery was leasing temporarily nearly 3,000 square feet of space in the Tennessee Tower. Paul had a cell phone, desks, a few state employees at her disposal and a Chevy Impala for use as a pool car. She had office supplies, but she also had a $15 million line of credit. That's a lot of paper clips.

The Scene recounted the amenities that awaited her upon her arrival in Nashville, to which Paul responded, "I am not a literal speaker. If I said something that was misunderstood, I am sorry."

Paul explains that her frequent public talks are more like bull sessions. "When I give speeches—and I give lots and lots of speeches; that was one of three I gave in a seven-day period—I generally try to give a broad-brushed picture of the lottery starting from scratch.... It's a real free flow. I want to draw the picture of starting a company from scratch. I want to talk about our mission, which is raising money for education."

And the Tennessee Lottery has done a stellar job of that, raising $124 million in nearly six months. Which is why Paul's truth-stretching is so befuddling.

"She doesn't need to be hyperbolic," Cohen says. "She can let the facts speak for themselves. She is thought of by her peers as the best in the business."

In part, because she presided over a successful start-up, the lottery board is very defensive of Paul. Jim Hill, a former CEO of the Lupton Company in Chattanooga and now vice chair of the lottery board, says that Paul is being targeted unfairly. "She is being picked on to the degree that sooner or later people won't have faith in the lottery." And when asked about Paul's statement of "no paper clips, no chairs, no offices," he defends her, even though he acknowledges that Paul was hardly starting from scratch.

These are tough days for both Paul and the lottery board. At a time when they could be crowing about the program's fast start, they're rankling lawmakers and reporters alike by showing little regard for how their high-rolling ways are viewed. On July 14, Paul and her board were summoned to appear before the Fiscal Review Committee, where angry legislators grilled them for hours about the executive's lavish array of perks and bonuses. One example: lottery proceeds covered $90,000 in temporary housing costs for the top executives. An overmatched Denny Bottorff, the former banker turned lottery board chair, said that he wanted lottery's top brass to worry about the start-up and not about finding a house. Lawmakers suggested, somewhat sarcastically, that, with a maximum compensation package of $750,000, Paul especially could have covered her own expenses.

That night, WTVF-Channel 5 reported that the board paid for Paul's $2,700-a-month Belle Meade area apartment where she lived when she first moved to Tennessee. Paul lived there for nearly seven months at a cost of $20,000. "That's the one I chose to live in," she told reporter Jennifer Kraus, when she showed up, uninvited, at Paul's new home.

Paul probably wouldn't have to shoo reporters off her doorstep if she had a better rapport with the press. But from the beginning, Paul has been called out for making false claims about the program. Earlier in the year, the Chattanooga Times Free Press took Paul to task for claiming that Tennessee's first-day ticket sales of $10.8 million set a new per capita record for first-day sales in state lotteries. In fact, the paper reported, Paul's office plugged in incorrect data to bolster her claims. Using the correct figures, Pitts discovered that Georgia posted higher first-day per capita sales than Tennessee.

According to the paper's editorial, Pitts received vague answers from Paul about why her office used misleading numbers. Finally, she backtracked. "It depends on how you count the population, but I don't know if it makes a difference on the amount of money for education," she told the paper. "Both states raised a lot of money for education, and that's all that matters."

Of course, Paul's right, but why make the false claim to start?

Paul's odd catalog of statements seems to stem from her apparent need to cast herself as a savvy, shrewd corporate executive battling in a competitive marketplace. Paul doesn't want people to see her as a public official presiding over a regulated monopoly. But that's exactly what the lottery is. Last year, she told Tennessean reporter Sheila Wissner that her salary should not be compared to other state salaries or even with the pay of other state's lottery officials. Instead, she maintained, the comparison should be to chief executives at Coca-Cola, UPS and Delta Airlines.

"Looking at a state agency head or someone in government was never how I was compensated," she explained to The Tennessean. "I was compensated on a business model."

In fact, as Wissner pointed out, those companies are far larger and more complex than a state lottery. (And, unlike the lottery, they have a product.)

Still, in numerous speeches across the state, Paul utters a consistent refrain: The lottery is a competitive business. In a talk last year, she said that other consumer products such as Coca-Cola and Frito Lay snacks are the lottery's rivals because they compete for consumer dollars. Of course, by that standard, Tampax competes with Alpo. In any case, the chief state lobbyist for the soft drink industry says there's simply no comparison between the lottery and a can of Coke.

"She uses that example everywhere she's been," says Raymond Thomasson, president of the Tennessee Soft Drink Association.

Well, has the presence of a lottery hurt the sales of Coke? "I have a feeling that we'll be in Tennessee long after Miss Paul leaves to take another opportunity."

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