Journalist faces subpoena in lawsuit over lottery scandal

August 27, 2019 - 12:44 pm

IOWA CITY, Iowa (AP) — An Iowa journalist who wrote a book about a lottery insider who rigged jackpots in several states has been subpoenaed to turn over notes related to his reporting.

Perry Beeman received the subpoena last week from a law firm representing Larry Dawson, an Iowa jackpot winner who contends that the rigging reduced his prize by millions of dollars.

Beeman co-wrote the recent book "The $80 billion Gamble" with former Iowa Lottery CEO Terry Rich. It tells the inside story of how now-imprisoned lottery security contractor Eddie Tipton altered number-picking programs on computers to win jackpots for himself, friends and family in Colorado, Wisconsin, Kansas and Oklahoma.

The subpoena orders Beeman to turn over his correspondence with Rich since January 2018, including notes related to four interviews they conducted last year. Beeman said Tuesday that he is considering how to respond to the request, which demands the records by Sept. 16.

"But I can say that in past cases like this, I have resisted the subpoena because it has a chilling effect on the reporting process," said Beeman, who is the managing editor of the Des Moines Business Record and a former reporter for the Des Moines Register.

The Iowa Supreme Court has ruled that a reporter's sources, unpublished information and notes are privileged material and may be subject to court-ordered disclosure only under limited circumstances. The legal precedent suggests that lawyers issuing subpoenas to reporters may be successful only if they show they have a substantial need for the information and have exhausted less burdensome means of obtaining it.

Dawson is suing the Iowa Lottery and the Multi-State Lottery Association, where Tipton worked. He contends that a $9 million Hot Lotto jackpot that he won in 2011 should have been nearly three times as big.

Tipton had purchased the winning ticket for the previous, $16.5 million jackpot that he rigged and had associates claim. Rich, then the Iowa Lottery chief, refused to pay the award because the person who claimed the prize would not reveal who had bought the ticket. Rich requested a criminal investigation that ultimately uncovered Tipton's stunning scheme, in which he installed computer code that allowed him to predict winning combinations on certain days of the year.

Dawson's lawsuit contends that under the game's rules, the $16.5 million prize should have rolled over to the next jackpot, which he won. Instead, the proceeds went back to the states that sponsored the game. The Iowa Lottery used its share for a "Mystery Millionaire" promotion, which included a $1 million prize drawn at the Iowa State Fair.

The lawsuit is scheduled to go to trial on Dec. 2.

Dawson is represented by the Crawford Law Firm, which recently helped obtain a $4.3 million class-action settlement to reimburse lottery players nationwide who bought tickets for drawings that were rigged. A court still needs to approve the settlement, including a request for $1.43 million in legal fees for the firm and other lawyers who represented the plaintiffs.

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Follow Ryan J. Foley on Twitter: https://twitter.com/rjfoley

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