New elections board starts amid questions about campaign donations

jfrank@newsobserver.comApril 30, 2013 

— A new GOP-majority state elections board takes office Wednesday as new details raise deeper questions about $240,000 in campaign contributions funneled to the governor and top Republican lawmakers from the sweepstakes gambling industry.

State Board of Elections investigators are reviewing more than 60 donations from sweepstakes company owners – and still unearthing more money – as part of a complaint filed last week that suggests the checks may violate campaign finance laws.

A majority of the outgoing elections board wanted to pursue the investigation but took no action on the matter Tuesday at its final meeting, saying the decision should fall to the new board.

The extent of the inquiry – and whether it merits a more formal criminal investigation – is one of the first matters the new board may take up. It will also consider whether to hire a new elections chief or retain executive director Gary Bartlett, whose term expires May 15.

McCrory appointed the three Republicans and two Democrats to the board Friday evening, picking from nominations made by the state’s major political parties. None have served on the board previously. He selected the top two Democrats on the list, leaving off two incumbent board members who were renominated, including outgoing Chairman Larry Leake, who served 20 years.

Undecided about probe

The new board members have said they are undecided on how to proceed on the sweepstakes probe.

“I think this new board can show by their actions that they support a complete and open investigation ... that helps the public understand what is happening,” said Bob Hall, who filed the complaint.

Republican state Rep. David Lewis, the House Elections Committee chairman, said Tuesday he supports a thorough look. “I think they ought to do what is required to clear the air on this and any other campaign finance or election issue,” he said.

A recent report from Democracy N.C., an advocacy group that watches campaign finance reports, found Gov. Pat McCrory received $70,000 from sweepstakes gambling interests and that political committees linked to House Speaker Thom Tillis and Senate leader Phil Berger also accepted large sums. Dozens of other Republican and Democratic lawmakers also received contributions.

Sweepstakes operator William George of Rock Hill, S.C., gave $4,000 to Pat McCrory’s campaign in 2012 as part of a broader effort to legalize the video games that emulate slot machines.

“We didn’t give them money because we liked them,” George told the Associated Press recently. “We just knew they were powerful people up in Raleigh and they could get done what we wanted to get done. You give them your money and they’re supposed to do what they say they’re going to do.”

The inquiry extends from the bust of an illegal gambling ring in Florida that led to the arrest of Chase Burns, the owner of International Internet Technologies, on charges of racketeering and money laundering. His company makes the software used by the sweepstakes cafes.

According to the criminal complaint, nearly $100 million in gambling proceeds flowed from North Carolina into Burns’ company and into the checking account used to make political donations. North Carolina law forbids candidates from accepting corporate contributions.

Campaign finance reports also indicate that two major lobbying firms, McGuire Woods and Moore & Van Allen, helped direct the money, raising concerns about the possibility of illegally bundling contributions or inappropriate donations. Moore & Van Allen is the law firm where McCrory worked until days before he took office.

George told AP that one of his sweepstakes business partners, David Hagie, assured him that Moore & Van Allen would help push a law to legalize the Internet sweepstakes cafes. The firm dropped Burns’ company as a lobbying client after his arrest.

Two lawmakers filed the bill in April but it has yet to be heard in committee.

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