Elections Board wants sweepstakes cash probed
RALEIGH (AP) — A majority of members on the North Carolina Board of Elections say they support opening a campaign finance investigation into 2012 political donations from the operators of sweepstakes games.
The five-member board is scheduled to meet by telephone Tuesday.
A sworn complaint filed earlier this week by the campaign finance watchdog group Democracy North Carolina focuses on $235,000 in checks to more than 60 campaigns by indicted sweepstakes software provider Chase Burns of Oklahoma.
An Associated Press investigation shows that the Burns donations were part of a larger effort by sweepstakes donors and their lobbyists to distribute more than $520,000 in political donations in the hopes of persuading lawmakers to reverse a 2010 law intended to ban the electronic games, which mimic Las Vegas-style slots.
AP reported Tuesday that most of the $235,000 in checks from Burns were delivered to candidates by Moore & Van Allen, a Charlotte law and lobbying firm where Gov. Pat McCrory worked until just days before he was sworn into office in January.
Kim Westbrook Strach, deputy director of campaign reporting for the elections board, said Thursday that her staff will “thoroughly investigate” questions about the sweepstakes donations raised by the Democracy North Carolina complaint and the AP’s reports.
Burns and his wife were among 57 people arrested last month over ties to a veteran’s charity that Florida prosecutors say served as a front for a $300 million illegal gambling operation.
Court filings from the case show that Burn’s company, International Internet Technologies, gleaned $98 million in earnings from Internet cafes in North Carolina. The records show that some of the money flowed into the checking account of a trust controlled by Burns that was used to send checks to the campaigns of top Republicans McCrory, state Senate leader Phil Berger and House speaker Thom Tillis, as well as dozens of other elected officials from both parties.
North Carolina law forbids corporate money from flowing “directly or indirectly” to fund political candidates.
In an interview Thursday, elections board member Robert Cordle said the board should investigate whether the sweepstakes donations violated state law.
“I think the whole thing warrants an investigation,” said Cordle, a Charlotte lawyer and Democrat. “We need to establish what the facts are.”
Cordle joins Democratic board Chairman Larry Leake of Asheville and Republican member Chuck Winfree of Greensboro, whom the AP reported as calling for an investigation on Tuesday.
The elections board has the authority to issue subpoenas and call witnesses to testify. If the board finds misconduct, it can impose fines and make a referral to state prosecutors for criminal charges.
Drew Neville, an Oklahoma City lawyer representing Burns on the felony charges from Florida, said last week that he could not provide comment on any of his client’s North Carolina campaign contributions.
Spokeswoman Kim Genardo said McCrory’s campaign has given $18,000 to charity to offset donations from Burns, his wife and other sweepstakes donors facing criminal charges. The governor’s campaign received more than $82,000 from sweepstakes donors, according to an analysis of disclosure reports by the AP and Democracy North Carolina.
In a March 15 interview with the AP, McCrory said he never met Burns and denied engaging in any conversations or strategy sessions on sweepstakes legislation while working at Moore & Van Allen. The governor declined requests this week for a follow-up interview, but through a spokesperson clarified that as a candidate he “met with representatives both for and against the sweepstakes issue.”
The complaint filed Monday asks the elections board to investigate checks from at least 10 sweepstakes donors in addition to Burns who gave to McCrory, Tillis, Berger and others.
Democracy North Carolina Executive Director Bob Hall suggested that the overall pattern of the donations raises concern that lobbyists were involved in collecting the checks or delivering them to the campaigns. It is illegal under state law for lobbyists to deliver “bundle” contributions from multiple donors to a single candidate.
The General Assembly has passed three laws intended to ban video poker and electronic sweepstakes, most recently in 2010. Each time, sweepstakes operators have filed court challenges and made software tweaks they say keep the games legal.
A bill introduced in the North Carolina House last month would legalize and tax sweepstakes cafes. The campaigns of the bill’s primary sponsors, Republican Rep. Jeff Collins and Deputy Democratic Leader Michael Wray, got a combined $6,000 from Burns and other sweepstakes donors.
“This industry has a pitiful record of trying to use money to try to buy legislation,” Hall said. “Passage of this bill under these circumstances is unthinkable. It would basically be an admission of political corruption.”