November 18, 2005.
International Herald Tribune.
MADRID -For nine years, Miguel Carballeda tapped his white walking stick down the streets of Palma de Majorca, a book of lottery tickets dangling on a chain around his neck. Passersby would purchase his stubs out of pity, he recalls.
On his first day of work, at age 18, he sold 400 of the so-called cupones and earned the equivalent of $2.40."When I realized that my future was out there on the street with my cane, I cried," said Carballeda, now 45. "I don't know any child who dreams of selling lottery tickets on a corner when he grows up."But in 1970s Spain, how else could a man with only a sliver of vision earn a living but by selling lottery tickets for the country's National Organization for the Blind?He never imagined one day he would be its president.
Then again, both Carballeda and his organization have come a long way. The organization, known as ONCE, was set up in 1938 by the dictator General Francisco Franco to help the many soldiers and civilians blinded during the Spanish Civil War.
The state asked that it raise its own money with local daily raffles and for more than 40 years the group existed as a "poor man's charity," as Carballeda says, without a peseta from the government.
Then, in 1984, teetering on bankruptcy, it improved its prizes, centralized its raffles and spruced up its advertising. The bet paid off. Since then, this legion of lottery vendors, one of the few nongovernmental organizations in Europe with gambling rights, has seen a surge in cash.
Today ONCE is an unusual financial empire that rakes in about 2.2 billion, or $2.6 billion, a year in lottery revenue, and employs 97,000 people, 77 percent of them disabled. About 23,000 sell lottery tickets, like Carballeda once did.
ONCE spends nearly 200 million of its yearly lottery earnings on social services for the blind, including job training, sports and education.
It has invested its surplus in a diverse portfolio of businesses and now owns eight companies, including a chain of nine hotels, a real estate agency and a security firm entrusted with the safety of the Madrid and Barcelona airports and the Real Madrid soccer stadium.
Last year, these satellite companies began to turn a meager collective profit of 18 million after taxes, with the goal of creating more employment for the disabled.
ONCE also created other companies, like a laundry service and physical therapy clinics, as an employment alternative to street-corner sales.
The success has come at a price, though. During its expansion, it succumbed to the same malady of overspending that often strikes lottery winners. "We were like the nouveau riche," said Carballeda, who moved up through the ranks until elected president in 2003 by representatives of its 66,000 blind members. "There was a lot of money all at once and a lot of people approached us, trying to take advantage."
In 1999, the organization sold its debt-burdened radio station, ONDA CERO, for 108 million to Telefónica, according to El Mundo, a Spanish daily. It also unloaded a lackluster construction company.
But its troubles were not over. Two years later, ONCE was caught in a scandal involving a failed Madrid brokerage, Gescartera, which promised high returns to investors, including several Catholic dioceses and the Spanish Navy. ONCE lost about 3.2 million in the collapse, and two executives resigned after they were reported to have negotiated the purchase of a 10 percent stake in the company.
That purchase was never completed, a ONCE spokesman said."We were victims," Carballeda said. ONCE has since restructured its hierarchy so that decisions pass through several layers of committees.
It is also seeking business partners who are familiar with the industries in which it operates, Carballeda said."Now there is more study, more analysis and more consensus before entering new sectors," he said. "Before it was all more about the personal vision of whoever was in charge."
On Wednesday, the national court of Spain decided to investigate fraud allegations concerning the number of lottery tickets issued by a former director, who ONCE says is linked to gambling.
ONCE's revenue fell 9 percent in 2004, a situation that has Carballeda concerned about the lottery's growing competition from the Euro Millions lottery and the casino and slot machine sector as well as the health of the satellite businesses. He hopes to recoup the losses with a scratch-off instant lottery, which the Spanish government approved last week, with one caveat: that proceeds be channeled only to services for the blind and disabled.
The constellation of companies has led some to fear that the organization has drifted away from its charitable mission. But Carballeda says that branching into new terrain demonstrates to society how blind people can work successfully in any field."If we don't give them jobs, who would?" he said, seated on his office couch, surrounded by vintage photos and paintings of 1940s lottery vendors. "We want to work for our living."
And Carballeda defends ONCE's investments as the only way to ensure its future. "Either we become a big business or we can't be the best in offering social services," he said. "In 30 or 40 years, maybe the lottery won't work as well as it does now, and then, how are we going to keep all those jobs?"
End of article.
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