Friday, May 15, 2009

Ex-Hoosier Lottery Director Has Cost Taxpayers Millions

Gov. Mitch Daniels' decision to hire political hack Esther Schneider to run the Hoosier Lottery Commission earlier in his administration has cost taxpayers millions in payouts to settle employment discrimination lawsuits and attorney fees associated with defending those lawsuits as a result of Schneider's employment decisions. Last year, the Hoosier Lottery paid Janna Shisler, a disabled legal counsel for the agency fired by Schneider, $225,000 to settle a claim she brought against Schneider and the state for discriminating against her under the Americans With Disabilities Act. Today, the Star's Jon Murray reports on a settlement the Hoosier Lottery entered into with 8 former African-American employees of the Lottery Commission who were fired by Schneider and sued Schneider and the state for racial discrimination. The average payout to the fired workers under the terms of a $2.8 million settlement is $238,585.31, with $841,317.55 of the settlement being paid out to the plaintiffs' attorney. The payouts to the former employees may seem high, but according to Murray's report, 6 of the 8 employees had worked at the Hoosier Lottery Commission since it was created in 1989. The other two employees had worked there since 1997. Schneider left her position in 2006 under an ethical cloud, but the state's inspector general later cleared her of any wrongdoing.


Paul K. Ogden said...


I do discrimination cases, which are extremely difficult cases to win. Federal courts love to dismiss them in summary judgment. To offer $2.8 million to settle a discrimination case is astonishing. The State's case must have been really, really bad.

Gary R. Welsh said...

The EEOC, Paul, concluded no discrimination had occurred after its investigation.

Downtown Indy said...

I was boiling at the IndyStar article when the reporter wrote:

"Lottery proceeds will pay for the settlement, since the agency receives no state money for its operation."

Eh? So this somehow makes it OK because they will pay with lottery dollars (from taxpayers) BEFORE those dollars can be transferred to and put to use by the state?

I know said...

Would you expect anything different from the EEOC, the Inspector General or the Attorney General's office's in Indiana?

The house needs cleaned from the inside out!

Citizen Kane said...

The EEOC is full of people who just want to shuffle papers, get paid and move on. Some of their consultant investigators are uninterested in the facts. They pretend they can't find the plaintiff (Huh?) and just go through the motions.

Gary R. Welsh said...

I think you are over-generalizing Citizen Kane. That hasn't been my experience with the EEOC.

bill groth said...

As an attorney who both files and defends discrimination cases, I concur with Paul Ogden's comment about the difficulty of winning discrimination cases in federal court. The size of this settlement is absolutely staggering, and for the Lottery to have agreed to it the evidence of intentional race discrimination in this case by Ms. Schneider must have been overwhelming. The EEOC's dismissal of the discrimination charges means nothing other than to again demonstrate how inept that agency had become under the Bush-Cheney administration and is absolutely not any reflection of the strength of the plaintiffs' cases. The size of the settlement is the clearest evidence of that.

The settlement in this case should do considerable damage to Governor Daniels' obvious ambitions to run for President in 2012. His abysmal judgment in appointing this woman to head the Hoosier Lottery, one of his very first appointments after taking office, will come back to haunt him again and again if he chooses to pursue his presidential ambitions. Also, it shouldn't be forgotten that in Aug. 2007 his inspector general "cleared" this ethically-challenged woman of allegations of cronyism and political favoritism.

It will be interesting to see if the story has legs and how vigorously the mainstream media will pursue it, such as by making a public records request to the Lottery to disclose the details of the case, including any depositions of Ms. Schneider and others who may have violated these former Lottery employees' civil rights.

Gary R. Welsh said...

Bill, When I've filed legitimate discrimination complaints for clients before the local EEOC, I've felt that my clients received a fair investigation in most cases. The problem the office faces is a tremendous workload of cases, including mostly bogus claims, and too small of a staff to handle all of the cases. I defended an employer in one case where the EEOC investigator was vigorously insisting my client had discriminated against someone when there was absolutly no proof to support the complaining party's case. The EEOC insisted my client had paid an African-American employee less because of her race. Even after we produced pay records showing she earned exactly the same amount of money as similarly-situated white employees, the investigator still insisted there had been discrimination. The woman in this case had been fired for insubordination and poor attendance--during her probationary period of employment. It was unbelievable.

I know said...

Thank you for the blog and the call out of the poor work of Inspector General or at the least scared of his political shadow IG.

His rulings fall solely on what the R's want the ruling to say!

Paul K. Ogden said...


Did they do that or did they conclude that there was not enough evidence to conclude either way. I didn't think they ever conclude straight out there is no discrimination.

I can't imagine if these folks went to trial they would have received that much money from a jury. Had this case cleared the summary judgment phase?

I know a case where a local Democrat federal judge reversed (using the 13th juror rule) a jury verdict of $50,000 for a county employee who had been repeatedly called "coon" and had nooses placed on her desk by supervisors. When a Democrat judge is doing that, that shows you the federal court's attitude toward discrimination cases is extremely unfavorable.

Paul K. Ogden said...

I agree with Bill that someone needs to look into the Inspector General David Thomas' role in this. How could he not raise a red flag on an employee's conduct that results in a $2.8 million settlement?

This after all is a man who filed ethics charges against my client, a former IDEM employee, who he alleged should have his termination upheld because he drove 45 minutes to fill up his state car gas tank at a station in which he had a 3% financial interest. The profit for my client? 1/2 of one cent for every mile he drove. Yet Thomas has no problem with an employee's conduct that costs the state $2.8 million.

That's not my only experience with David Thomas. I also wrote previously on my blog about the phony "false informing" charges he pursued when Clay County Prosecutor against a client of mine who alleged she was groped by a Deputy Sheriff during a stop. In the confusion of several officers at the scene, she accidentally identified the wrong officer to the Prosecutor. Even when Thomas was told it was an innocent mistake during a state police investigaiton, Thomas still left the charges against the woman

As far as the EEOC, I can't say I've ever found them helpful. I view the EEOC process like the Notice of Tort Claim process (which is as worthless as they come)...a prerequisite to filing a lawsuit.

Paul K. Ogden said...


I just looked at the Court's docket. The case settled as it was moving toward trial.

The Lottery's attorneys never asked for summary judgment. I don't think I've ever seen a federal discrimination case where the Defendant(s) did not move for summary judgment. I've heard estimates that the Southern District of Indiana dismisses 90% of disrimination cases on summary judgment. Makes me wonder if the attorneys just missed a deadline.