Jessica M. Karmasek Feb. 15, 2013, 2:00pm

HARRISBURG, Pa. (Legal Newsline) -- Pennsylvania's newly-elected attorney general, Kathleen Kane, said Thursday a proposed Lottery contract with Camelot Global Services violates the state constitution and is "not statutorily authorized."

"The Office of Attorney General conducted a very thorough review of the Professional Management Agreement, the state constitution, the State Lottery Act, the Gaming Act and applicable case authority, and has determined that it cannot approve the contract to allow Camelot to operate and manage the Pennsylvania Lottery," Kane said in a statement.

Under the state's Attorney's Act, the attorney general is to review contracts for "form and legality."

In a memorandum to David Kraus, chief counsel for the state Department of Revenue, the Attorney General's Office provided three reasons why the Professional Management Agreement, or PMA, failed the "form and legality" test.

Robert A. Mulle, chief deputy attorney general and head of the office's Legal Review Section, said, first, the Executive Branch -- i.e. Gov. Tom Corbett -- exceeded its authority under the Pennsylvania Constitution by "unlawfully infringing" on the General Assembly's power to make basic policy choices regarding the management and operation of the Lottery.

Second, Mulle said the development of monitor-based or other electronic games, such as KENO, is not authorized by the State Lottery Act and usurps the authority granted by the General Assembly to the Pennsylvania Gaming Control Board.

Lastly, allowing Camelot to be indemnified for "indirect expenses," as provided in the PMA, is an "unconstitutional waiver" of the doctrine of sovereign iImmunity as set forth in the state constitution.

"It is our duty to defend and protect the Constitution of our Commonwealth and that is what our office has done by declining this contract," Kane said.

"In the course of making this determination, I have taken the advice and counsel of the executive deputy attorney general in charge of the Civil Division and the chief deputy attorney general in charge of the Legal Review Section. Together, these attorneys have many years of experience reviewing Commonwealth contracts for 'form and legality.'"

The attorney general noted that these attorneys worked for Corbett when he was attorney general, as well as several attorneys general before him.

"Promising money to people in need based on a contract that is not legal and then blaming those entrusted to do their job correctly is both disingenuous and a perfect example of putting the cart before the horse," said Kane, the first woman ever elected to the position and the first Democrat to be elected since it became an elective office in 1980.

"It is important that my office perform its role in the system of checks and balances that our government desperately needs and that our citizens deserve."

Corbett, a Republican, said in a statement Thursday he is "deeply disappointed" with Kane's review.

"I don't agree with the attorney general's analysis and decision, and we will review our legal options," he said.

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