Black, video poker on hot seat

State elections board hearings will explore ties between political gifts and the video poker industry

In 2000, Deborah Dunlap and her husband each gave $500 to the campaigns of Democrats running for governor and attorney general.

But the next year, when she donated $3,500 to House Speaker Jim Black, campaign reports show the Richmond County schoolteacher used her maiden name -- Deborah Jean Autry.

It's hard to understand why, unless you know this: Mrs. Dunlap's husband, Robert, works for Southland Amusements, a video poker business in Wilmington. The company and its owner have ties to roughly $30,000 in political contributions in the 2002 election cycle to Black, according to Democracy North Carolina, a nonprofit campaign finance watchdog.

Black, a Mecklenburg County Democrat, has protected the industry from a ban, saying a ban would lead to a loss of about 3,500 jobs at small businesses.

Bob Hall, research director for Democracy North Carolina, spotted Mrs. Dunlap's donation to Black along with many others from people who, upon investigation, were connected to video poker. The contributions will be the subject of hearings before the State Board of Elections starting today.

"It fit into a pattern of contributions from that part of the state to Jim Black that in one way or another did not seem to be as straightforward as you might want to see in a campaign report," said Hall, who filed a complaint with the State Board of Elections about the industry's contributions.

Democracy North Carolina's investigation identified more than $120,000 in donations from video poker interests to Black's campaign in the 2002 cycle. Hall's complaint said the group had identified donations that were made in the names of other people, that contained false information or that exceeded $100 cash -- all possible violations of state law. Other donations, the complaint said, were made with the promise of reimbursement, which would also violate state election laws.

The Dunlaps are among several people with ties to the video poker industry who have been subpoenaed to testify at the hearings this week. The industry's association has been told to produce its financial records and political contribution records and any records of communications with Black or someone on his behalf.

Richard Frye, a video poker operator from Moore County who sits on the N.C. Amusement Machine Association's board, said the association has operated within the law.

"I don't think anybody was trying to hide anything," Frye said. "Now, whether any individuals got overenthusiastic, I don't know until that's heard out."

Mrs. Dunlap said in a recent phone interview that she couldn't talk about the $3,500 donation to Black and referred questions to her husband. He did not return a message.

"I can tell you about my donations regarding the American Cancer Society and some other things, but he can tell you about that," she said.

The stakes are high for the video poker industry and for Black. The industry has been buffeted by high-profile arrests of video poker operators accused of turning their machines into cash-paying slot machines. State law allows the machines to pay out only up to $10 in merchandise. Many lawmakers want to ban them.

Black, meanwhile, has been the subject of several controversies involving his political and legislative activities. A federal grand jury is looking into his ties to video poker, his involvement in the creation of the state lottery, the work of his former political director and the help he gave to former Rep. Michael Decker of Forsyth County. Decker switched from the Republican Party to the Democrats in 2003, helping Black stay in power.

A hearing by the elections board last month showed that Black participated in a system of passing campaign checks, with the payee's line left blank, from optometrists to favored legislative candidates. Black used the system to benefit Decker's campaign.

Hall said his investigation produced no evidence that Black engineered any of the suspicious video poker donations. At the elections board hearing, two industry lobbyists testified that Black helped raise video poker industry donations to Decker's campaign when Decker switched parties.

That hearing generated heartburn among House Democrats, who are standing behind Black. Some are worried about what might come to light this week.

"There's a feeling that it's wait till video poker is over," said Rep. Hugh Holliman, a Lexington Democrat.

(Staff writer J. Andrew Curliss contributed to this report.)