Gift-giving scandal prompts Colorado lottery to bring PR in-house

DENVER: A Colorado PR agency is irate that its client, the Colorado lottery, has decided to take its PR in-house. That decision comes in the wake of a controversy involving gifts from vendors - including the PR firm - to the lottery's employees.

DENVER: A Colorado PR agency is irate that its client, the Colorado lottery, has decided to take its PR in-house. That decision comes in the wake of a controversy involving gifts from vendors - including the PR firm - to the lottery's employees.

Peter Webb, president of Peter Webb Public Relations, said his agency is being punished over the gifts, but it has done nothing wrong.

"We did what was allowed under the law," said Webb, whose firm is based in Centennial, CO, in the Denver area. "We're busy replacing the business. What's more important is the reputation of our firm."

Peter Webb PR gave lottery employees 23 gifts since mid-1999, the Rocky Mountain News reported.

Webb said the move was also prompted by politics, because his firm was originally hired by a prior lottery director. "It's clear that the new administration does not value PR," he said.

Diane Reimer, a PIO with the state Department of Revenue, which oversees the lottery, said the decision was made based on the abilities of the in-house department. "We can deal with PR," she said. "We have very capable people on staff in the Department of Revenue and decided to just go that way."

The lottery had been paying Webb's firm $399,000 a year under a three-year contract, with options to renew for two years. Webb is in the third year of that contract, which expires July 1, Reimer said.

The lottery has been the subject of media coverage in Colorado since last year, when a state audit found widespread giving of gifts, such as meals and sports tickets, to lottery officials by outside vendors. The state legislature is considering a bill that would bar vendor gifts to lottery employees.

The lottery has issued an RFP for a new ad agency, but plans to handle PR in-house.

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