First, there's the $38,000 spent on the agency's 2001 annual meeting. Lottery director Chris Lyons said the figure was "an anomaly" that year because her agency brought in Chip Bell, a "well-known speaker accomplished in addressing Fortune 500 companies." And, she added, Bell charged the Lottery only $56 per person, while he'd charged $130 per person for giving the same presentation six months earlier. While Lyons told state auditors that the Lottery "negotiated" this "dramatically reduced fee," Bell told WW that the $20,000 he charged the agency (plus nearly $3,500 in travel expenses) was his standard fare, which is based on the length of his presentation, not the number of people who attend. "It's a set fee," he said. "The size of the audience doesn't matter."

Then, there's the $27,904 in first-class airline tickets for two employees' business trips. Lyons contends that both are "severely disabled." But one of them, Deputy Director Lee Moore, was able to walk in and out of an interview with KATU-TV's Eric Mason, despite what he described as "significant medical issues" related to his diabetes and back problems. Besides, as Secretary of State Bill Bradbury noted, two federal laws require airlines to accommodate people with disabilities in coach, at no extra cost.

Finally, there's the $10,372 for employee-recognition gifts, including a Waterford vase and 100 Cross pens, and $10,662 for refreshments for weekly staff meetings and catered meals. Lyons' response to such charges was the most roguish: Because the Lottery generates cash for the state, she said, it can play by its own rules. A quick check with three other revenue-generating agencies--the Oregon Liquor Control Commission, the secretary of state's Corporation Division and the state Department of Revenue--got the same response: There are no crystal vases and no such thing as a free lunch for their employees.

All told, Bradbury's office found $792,000 in questionable expenses. Lyons may be sitting atop a cash cow--but in this case, it clearly needs a shorter halter rope.