State Politics

Wake County DA launches criminal probe into sweepstakes campaign donations

This booking photo provided by the Caddo County Sheriff's Office shows Chase Burns. Burns, the owner of Anadarko, Okla.-based International Internet Technologies, was arrested March 12, 2013, along with his wife Kristin Burns. Chase Burns is accused of making $290 million after supplying illegal gambling software in Florida and claiming the games' proceeds would benefit Allied Veterans of the World. Florida Lt. Gov. Jennifer Carroll announced her resignation March 13, 2013, a day after she was questioned by authorities regarding her work with Allied Veterans of the World.
This booking photo provided by the Caddo County Sheriff's Office shows Chase Burns. Burns, the owner of Anadarko, Okla.-based International Internet Technologies, was arrested March 12, 2013, along with his wife Kristin Burns. Chase Burns is accused of making $290 million after supplying illegal gambling software in Florida and claiming the games' proceeds would benefit Allied Veterans of the World. Florida Lt. Gov. Jennifer Carroll announced her resignation March 13, 2013, a day after she was questioned by authorities regarding her work with Allied Veterans of the World. AP

Months after state Board of Elections investigators found no wrongdoing related to 2012 political contributions from the video sweepstakes industry, the Wake County district attorney has asked the State Bureau of Investigation to take a deeper look.

The request reopens what appeared this summer to be a settled matter of whether Chase Burns, a sweepstakes software company magnate, legally distributed some $274,500 in political contributions to an array of office-holders and office-seekers, including Gov. Pat McCrory and legislative leaders.

Wake County District Attorney Lorrin Freeman confirmed Monday that she sent a letter to the SBI on Oct. 6 asking for assistance with an investigation.

Freeman said she thought a second look into the matter was important for several reasons – to find out whether any criminal activity occurred during the elections three years ago and to assure the public that if violations occurred, they would be prosecuted.

Investigators would determine if there were potential violations of state ethics, lobbying and campaign finance laws such as illegal bundling of contributions.

The probe would take at least several months, Freeman said.

“Our hope is, certainly, if any criminal violations occurred, to find them,” Freeman said. “There might not be any. But we hope this will give the public confidence in the process.”

The state Board of Elections began looking into Burns and the sweepstakes industry in 2013 after Democracy North Carolina, a nonprofit organization based in Durham, filed a complaint. Burns and his wife were among the top campaign donors in 2012. Their contributions came at a time when the video sweepstakes industry was lobbying heavily to overturn a state ban on the games.

The following year, Burns faced federal racketeering charges and pleaded no contest to lesser charges.

The Board of Elections launched a protracted investigation into nearly $700,000 in questionable spending by the industry, and in July it issued a report that found no violations of state campaign finance laws.

Though the elections board did not refer the report for prosecution, members made it clear that the board’s scope and legal tools were limited and that there could be room for a deeper look.

Josh Howard, chairman of the state board, said Monday that Freeman’s action “is neither unreasonable nor unexpected. The D.A. has a broader scope of inquiry than our board.”

Kim Strach, executive director of the state Board of Elections, said earlier this year that her office spent close to two years interviewing more than 200 people and reviewing more than 13,000 spreadsheets, bank records and other documents. Two elections investigators, one of them a former FBI agent, met with a sheriff’s task force in Florida that spent three years investigating Burns, who funneled millions to North Carolina.

Despite all that, Strach said her investigation was unable to determine if illegal money from Burns flowed into North Carolina. State investigators were not able to interview Burns, nor obtain his federal tax records.

Some members of the five-member Board of Elections expressed frustrations that campaign finance laws were insufficient to cover what might be other criminal violations. They noted records showed millions of dollars moving through Burns’ personal and business accounts, and subsequent payments and political contributions in North Carolina.

Bob Hall, executive director of Democracy North Carolina, quickly began pushing for a criminal probe after the July report was issued.

In August, Hall outlined his concerns in an eight-page appeal to Freeman and U.S. Attorney Thomas Walker. He complained that the elections board report did not “connect the dots to all the money that changed hands.” The prosecutors have additional tools to investigate bribery, tax evasion, racketeering and public corruption, Hall contended, and urged them to use them.

On Monday, Hall said he was pleased to hear that Freeman decided to delve further.

“It’s good news that she’s wanting to dig deeper into this affair,” Hall said. “I think there’s wrongdoing that has happened, and that’s why I continued to push for such an investigation.”

The state board’s investigation was marred, Hall said, by allegations that an election board member had been accused of making inappropriate inquiries into the investigation.

Winston-Salem attorney Paul Foley was forced to resign from the board after he failed to disclose that his employer had received $1.27 million for legal services from Burns and his company.

Though Foley recused himself, he was accused of still pressuring the elections staff for details of the investigation.

Anne Blythe: 919-836-4948, @AnneBlythe1

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