Posted on Thu, Jun. 01, 2006

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Former lottery head wins over opponents

John C.B. Smith Jr. steps down as the first chairman of the lottery commission

By AARON GOULD SHEININ

asheinin@thestate.com

TRAVIS BELL/SPECIAL TO THE STATE

John C.B. Smith Jr.’s term as the first chairman of the S.C. Education Lottery Commission ended in 2005, but he was replaced last week by Gov. Mark Sanford.

• ABOUT THE COMMISSION

Even those who never wanted John C.B. Smith Jr.’s job to exist admit the former chairman of the S.C. Education Lottery Commission has done an admirable job.

Smith, 62, was the lottery’s first chairman, appointed by then-Gov. Jim Hodges in July 2001. Although his term actually expired in 2005, he was replaced just last week by Gov. Mark Sanford.

Sanford named Columbia contractor Nathaniel Spells to Smith’s seat on the board, which will choose the next chairman at its meeting today.

The lottery was approved by voters in a 2000 referendum and created by legislation adopted in 2001. Each milestone was met only after hard-fought campaigns. The entire lottery, once up and running, was closely watched by those who did not want the state in the business of gambling.

Five years later, many of those critics praise Smith’s steady leadership.

“Honestly, I think he did a phenomenal job,” said Ed McMullen, president of the S.C. Policy Council, a conservative think tank in Columbia and a leading opponent of starting a lottery. “C.B. looked at the letter of the law, and he really did control the advertising. He controlled the construction of the board with ethics and was cognizant of those ethical restraints the law required.

“A lot of people were speculating this would be a disaster. But Governor Hodges did a great job.”

Hodges, now a business consultant, said he had high expectations for Smith, “and he exceeded those expectations.”

In some states, Hodges said, lottery boards are stocked with “people with political backgrounds. But what I thought was needed was someone with good business experience.”

Smith owns a real estate firm and is attorney of counsel with the Nelson Mullins law firm. He also is chairman of the board of Sisters of Charity Foundation and chairman of the USC School of Law Partnership Board.

Smith said assuaging the concerns of McMullen and other critics, and meeting the business expectations of the governor and lawmakers, were equally important in the lottery’s startup.

“Going into this, the challenge was to create this entity, have it be successful, have it be above reproach, have it generate funds for education,” Smith said. “I don’t really think it turned out to be much different from what I thought.”

The lottery is a $1 billion-a-year enterprise that in 2004-05 returned more than $280 million to the state and has returned more than $1.5 billion since tickets went on sale. In 2004-05, more than 25,000 LIFE scholarships and 1,700 HOPE scholarships were funded, plus millions for K-12 programs and other initiatives.

While Hodges and others wanted the lottery to “be run like a business,” Smith realized that could be only partially the case.

“There are some differences between a billion-dollar corporation and a state agency where the public trust is involved,” he said.

Smith said there were things to learn early about balancing those public-private nuances. After an early run-in with the press over a closed board meeting that should have been open, “We sat down and said we are going to go absolutely overboard to make sure every meeting is open, every record is open.”

Ken Wingate, another leader of the fight against creating a lottery, said Smith “has brought a very steady hand to the leadership of the commission and has well implemented the mandate from the General Assembly to make sure the operations were done fairly and openly.”

Reach Gould Sheinin at (803) 771-8658.