Daniels appoints interim lottery director after resignation

Gov. Mitch Daniels has named an interim executive director of the Hoosier Lottery following the resignation of the lottery’s former director amid accusations that she spent tens of thousands of tax dollars on extravagant office space.

Indiana democrats asked Kathryn Densborn to step down after reporters from Channel 13 in Indianapolis revealed the lottery offices included a break room furnished with $800 bar stools and flat screen televisions, as well as a workout room containing equipment worth more than $25,000.

Densborn resigned Friday.

“The lottery’s operations under Kathryn’s leadership have been solid, and hundreds of millions of dollars have been generated for the state of Indiana,” Daniels said in a press release. “I thank Kathryn for her six years of service at the lottery and in other public service roles.”

Megan Ornellas was named Densborn’s temporary replacement Tuesday.

Ornellas is the chief of staff for the Family and Social Services Administration. She has been with the agency since 2007, serving as the chief financial officer prior to becoming chief of staff.

“From an overall standpoint, the lottery has never been better run,” said Earl Goode, Daniels’ chief of staff, in a press release addressing the controversy. “Administrative expenses have consistently been around 2.5 percent, far lower than the historical pattern. Notwithstanding that record, this administration established high, clearly defined standards for both economy and appearances, and the governor insists on their rigorous enforcement.”

Indiana Democratic Party Chair Dan Parker issued a statement following Denborn’s retirement, criticizing Daniels’ taste in lottery directors.

“Mitch Daniels has appointed two lottery directors,” Parker said. “Both cost taxpayers a lot of money and wound up resigning under clouds of scandal. They’re part of a growing list of agency heads who’ve stepped down after making embarrassing, costly mistakes.”

The first of the two lottery directors Parker referred to was Esther Schneider. Schneider was sued by eight African-American employees for race discrimination, and the lottery paid $2.8 million to settle the lawsuit in 2009.

Ornellas will begin her duties Tuesday and will remain until a permanent successor is named.

— Jake New