Chase Burns was a 37-year-old Oklahoma businessman who set out to create a sweepstakes gambling empire in North Carolina and was willing to spread around millions to make it happen.
He was the biggest donor in the 2012 elections. He hired some of the biggest blue-chip law firms in the state. And he put some of the most influential lobbyists in town on his payroll.
But then things started going South for Burns. Burns was indicted in Florida in 2013 on racketeering and conspiracy charges – one of 57 people arrested on charges of running an illegal gaming operation that prosecutors said masqueraded as a charity. But he was Mr. Big. Caught in the scandal was the former state president of the Florida State Bar, who was indicted, and the Florida lieutenant governor, who resigned.
The only bright side for Burns is that he struck a deal in which he pleaded no contest to two charges and he stayed out of jail. The courts also forced the government to return to him the seized $5.7 million yacht that he had used to entertain politicians.
North Carolina’s Board of Elections began an inquiry into Burns’ activities in North Carolina based on a complaint brought by Democracy North Carolina, a Durham-based liberal public interest group.
After an extensive investigation, the State Board of Elections this month reported that it found no elections law violations by Burns or any of his associates in North Carolina. It appears to me that the elections board, headed by some highly competent individuals, did a professional job.
The investigation provided a behind-the-curtain look at the pay-for-play climate that permeates Raleigh.
Burns contributed $274,500 to North Carolina candidates during the 2012 campaign, giving to both parties, but more heavily to Republicans since they were in control of the legislature. The biggest recipient was Republican gubernatorial candidate Pat McCrory. (McCrory donated the $8,000 he received from Burns to charity, but kept most of the rest of the $70,000 from the sweepstakes industry.)
The campaign donations did not come directly from Burns but were handled by the Charlotte-based law firm of Moore and Van Allen, which Burns had hired to lobby for legislation favorable to sweepstakes industry. It was Moore and Van Allen that distributed the checks to North Carolina political candidates on behalf of Burns.
McCrory, until his election as governor, was employed by Moore and Van Allen, although he is not a lawyer nor was he registered as a lobbyist.
Burns, it seems, was buying up lawyers wholesale in an effort to keep the sweepstakes business legal. He paid $129,074 to Moore and Van Allen, $7.8 million to Grace Tisdale & Clifton, $1.3 million to Kilpatrick Stockton, and $419,492 to Womble Carlyle, among other law firms, according to the elections report.
It is not surprising that Burns was shelling out that kind of legal fees. Court filings from the Florida case showed Burns’ company made $98 million from Internet cafes in North Carolina, according to the Associated Press.
The elections board report also shed light on other Raleigh practices.
Consider the “round table discussions” held by a lobbying firm during the campaign. Those were held by McGuireWoods Consulting, a consulting and lobbying operations that grew out of a major law firm by the same name.
On Feb. 23, 2012, McGuireWoods had McCrory to a “round table discussion” to meet with a representative of the sweepstakes industry. Gardner Payne, an industry lobbyist, talked about industry issues and how it could help McCrory’s campaign, according to the report.
On the same day, McGuireWoods also brought in representatives of a charter school group out of Virginia that was promoting virtual schools; State Farm agents to discuss insurance tax and regulatory issues; Amerigroup, a Medicaid managed care company out of Virginia; and the Association of Home & Hospice Care who wanted to talk about Medicaid. Each got 20 minutes with McCrory, according to report.
Harry Kaplan, chief lobbyist of McGuireWoods, said he was not aware of any contributions being provided by the groups during the meeting. But McGuireWoods did make a contribution to McCrory prior to the meeting.
McGuireWoods held similar “round table discussions” with then-House Speaker Thom Tillis. Kaplan told the elections board that some of the groups made contributions to Tillis, who is now a U.S. senator.
All of these discussions – where candidates show up in a lobbyist’s office to meet with a parade of special interest groups – have a pay-to-play flavor to them.
McGuireWoods was involved in drafting legislation favored by the sweepstakes industry. But the bill became radioactive after Burn’s indictment.