Hugo Lopez, the director of the California State Lottery, has resigned after an audit uncovered his team’s lavish overspending and allegations spread of their drunken behavior during business trips
The director of the California State Lottery has resigned after an audit uncovered his team’s lavish overspending and allegations spread of their drunken behavior during business trips.
Hugo Lopez, who has been director of the California State Lottery since 2015, stepped down on Friday. His resignation is effective immediately.
The move comes nearly a year after an anonymous lottery employee sent a letter to then-Governor Jerry Brown’s office with photos of senior lottery officials’ lewd behavior.
One photo showed a manager putting his head up a female staffer’s shit after a group of senior state Lottery leaders visited a piano bar together in 2016.
Another image showed that Lopez was at the bar at the time. The lottery leaders had been in Claremont, California for a sales conference.
‘These types of unprofessional shenanigans have become a regular practice of this management team when they travel to meetings,’ the employee said in the letter, which was written on Lottery stationery, according to the Sacramento Bee.
The employee urged Brown’s office to investigate, claiming senior Lottery leaders had also been using inappropriate language with their staff and showing favoritism in their hires and promotions.
The move comes nearly a year after an anonymous lottery employee sent photos of the team’s lewd behavior to then-Governor Jerry Brown’s office. One photo showed a manager putting his head up a female staffer’s shit after a group of senior state Lottery leaders visited a piano bar
Their letter prompted the State Controller’s Office to launch an expanded audit into the California State Lottery, uncovering more than $300,000 worth of improper or questionable spending over the last four years.
Auditors discovered Lottery officials had spent $16,940 on pens shaped like baseball bats, $14,065 for baseball caps, and $15,740 on duffel bags in 2017.
The agency also spent $21,666 on gifts for staff, including logo-branded T-shirts, backpacks, lip balm, and iPad cases.
Lottery officials identified the purchases as ‘learning aids’ and ‘training tools’, according to the Los Angeles Times.
Auditors identified $83,411 in improper hotel costs by employees despite the agency’s policy that employees cannot bill the company for a hotel stay if they live within 50 miles of an event.
One employee who only lived six miles from a conference spent three nights at a hotel, costing the agency $536.
The audit also discovered that $16,738 was spent on food and drinks at a non-mandatory after-hours meet-and-greet event with a contractor for the agency.
Another image showed that Lopez was at the bar at the time. The lottery leaders had been in Claremont, California for a sales conference in 2016
Auditors also found that sales managers were stopping at retail locations on the way to work so that they could claim excessive mileage reimbursement for their commutes. One manager had $13,280 in unallowable mileage costs.
‘Lottery management’s lenient oversight and disregard for policies and procedures allowed for more than $300,000 in prohibited and questionable costs,’ state Controller Betty Yee said in a statement in April after the audit concluded.
‘Clearly, Lottery management needs to overhaul their internal controls and enforce state policies.’
California Lottery’s management said it agreed with the findings and recommendations from the audit.
‘Lottery Sales Division management could have done a better job tracking and documenting expenses and minimizing administrative errors,’ it said in a statement.
The letter to Brown (pictured) prompted the State Controller’s Office to launch an expanded audit into the California State Lottery, uncovering more than $300,000 worth of improper or questionable spending over the last four years
The agency said that staff were going to receive ‘updated training to ensure awareness of, and compliance with, all state regulations and rules’.
Lopez announced his departure to staff in an email, highlighting that California Lottery’s revenue had grown from $3billion a year to $7billion a year in the last decade.
But Robert Medof, a Lottery sales rep, said Lopez was one of the ‘worst directors’ the agency has ever had.
‘At the national level, the California Lottery has been one of the fastest growing lotteries over the past few years,’ he wrote.
‘There is a lot of micromanaging,’ he said. ‘Sales might be high, but employee morale is incredibly low.’
Lopez did not mention the audit or anonymous letter in his email. It remains unclear if he is retiring or taking a different job.