* The Legislative Audit Commission is meeting today and one item on the agenda is the curious case of Illinois Lottery Director Michael Jones…

Emails obtained by FOX 32 and the Better Government Association show that within days of his appointment, Jones started pushing to hire a Chicago-based company called Independent Lottery Research, a company that Jones helped found and partly owned until he took over the lottery.

“I’d say ‘why don’t we keep the money in Illinois? Why wouldn’t we hire an Illinois company to do research on the Illinois lottery?’” Jones recalls of his conversation.

That contract was killed after Northstar and the governor’s office complained it looked like a conflict–the “optics” problem. But, the next month, Independent Lottery Research changed its name to Independent Gaming Research and invoices show it immediately starting getting work on the Illinois Lottery–about $168,000 in a 1-year period.

Jones says he had nothing to do with picking the company and told us to ask Northstar – so we did.

A spokesman for Northstar’s parent company GTECH says they gave the business to Jones’ old company, because Jones wanted them to.

“The director… strongly encouraged GTECH to use ILR/IGR for various marketing research projects for the Illinois Lottery,” says spokesperson Bob Vincent. “GTECH had not previously done business with those companies. The primary reason GTECH hired ILR/IGR was because of Director Jones’ urging.”

Word is that Jones’ former research company has submitted another bid for work with Northstar.

* This fight appears to go back to when Lottery management was privatized…

Now, it’s fair to say that the marriage between Mr. Jones and Northstar, which is mostly owned by the Gtech division of Lottomatica Group SpA, wasn’t made in heaven. Not only is Mr. Jones a hard-charger, but before his appointment he had teamed up with another group bidding against Northstar. Once in office, he and Northstar squared off in a nasty fight before an independent mediator over whether the company should pay $25 million in penalties for poor performance.

* And the rift between Director Jones and Northstar has been escalating…

A nasty — and growing — rift between Illinois Lottery private manager Northstar Lottery Group and Illinois Lottery Director Michael Jones has suddenly worsened.

A Northstar spokeswoman confirmed the Lottery private manager has instructed the two lead ad agencies working on Lottery advertising — general market agency Downtown Partners Chicago and multicultural agency Commonground Chicago — to work only with Northstar staff on marketing-related matters and discontinue any direct dealings they may have had with Jones.

“Northstar is the sole point of contact to Northstar’s creative agencies,” said the spokeswoman in a statement. Then, per the spokeswoman, “Northstar and the Lottery meet to discuss all aspects of marketing for the Illinois Lottery.”

The Northstar spokeswoman indicated the directive to the two ad agencies merely reflects what is outlined in the private manager’s agreement with the state. Jones declined comment, as did Jim Schmidt, a co-founder and co-creative leader of Downtown Partners.

Contractual rules and regulations notwithstanding, Northstar’s latest move appears to be a direct slap in the face to Jones, who has said repeatedly that developing a new look and feel for Illinois Lottery advertising is one of his top priorities.

* More…

As the top state official overseeing the Illinois Lottery, records show, Michael J. Jones has:

◆ Tried to get the private company that runs the lottery to hire his daughter’s ballet company for a promotion.

◆ Hired a consultant who got more than $115,000 for four months of work assisting with Internet lottery sales — even though the private lottery manager oversees those sales. The same consultant made another $46,000 in that time working for Illinois Senate President John J. Cullerton (D-Chicago), who met her through Jones.

◆ Found himself facing questions raised by the lottery manager’s lawyer over free tickets to professional basketball, baseball and hockey games that he and other state employees got.

Jones says he’s done nothing wrong and calls the questions about his ethics a diversionary tactic on the part of Northstar Lottery Group, the company hired by Illinois officials in 2011 in a deal that made Illinois the first state to have a private manager run most of its lottery operation.

Discuss.