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Foley affair aftermath: Watchdog group calls on prosecutors to investigate gambling industry ties to state leaders

Dem NC McCrory Tillis

Posters document sweepstakes industry campaign contributions to Gov. McCrory and Senator Tillis

Bob Hall

Democracy NC Executive Director Bob Hall speaks to the news media outside the federal courthouse in Raleigh

The good government watchdog group Democracy North Carolina called today on government prosecutors to investigate the connections between the controversial “sweepstakes” industry, its lobbyists and Governor McCrory, Senate President Pro Tem Phil Berger and U.S. Senator Thom Tillis. According to the letter delivered to U.S. Attorney Thomas Walker and Wake County District Attorney Lorrin Freeman by Democracy NC Executive Director Bob Hall, the connections raise the specter of political corruption, illegal “bundling” of campaign contributions, money laundering, illegal corporate campaign donations and abuse office.

According to Hall the recent decision by the State Board of Elections not to pursue any violations related to campaign finance laws in the sweepstakes case leaves numerous questions unanswered and in need of further investigation. (Click here to read a Democracy NC press release and the letter delivered to prosecutors.) This is from the letter:

“After two years, the State Board of Elections voted on July 15, 2015, not to find or pursue any violations related to North Carolina’s campaign finance statutes. However, a number of findings in the report prepared by the staff reinforce my concern about illegal acts.

These include:

  • One lobbyist (Tommy Sevier of Moore & Van Allen) admitted he delivered bundled contributions on two occasions (pages 29-30 of the
    SBE report).
  • Bank account records of the Chase Burns Trust showed millions of dollars transferred from his IIT sweepstake software corporation into the Trust’s account, which was used to write $274,000 in campaign contributions to dozens of legislators and others, making the Burns
    Trust the top campaign donor to NC candidates in the 2012 election cycle (pages 9-15 of the SBE report).
  • The contributions written from the Chase Burns Trust roughly follow the recommendations in a memo titled “IIT Political Contribution Strategy” that was prepared by lobbyists at Moore & Van Allen, the firm retained not by Burns personally but by his sweepstakes’ corporation, IIT (Exhibit 2 of the SBE report).
  • The IIT corporation collected a 3% surcharge on sweepstakes parlor owners it serviced for a political and lobbying fund. A different but somewhat similar arrangement in Florida included allocating part of the surcharge for campaign donations, but Board staff did not
    find a similar link to donations in the NC arrangement (pages 32 of the SBE report).
  • Gardner Payne, a major sweepstakes operator, “talked about raising money from the sweepstakes industry for Governor McCrory” during a meeting where the two men discussed ways to legalize the sweepstakes industry (pages 32 of the SBE report).
  • The same representative (Gardner Payne) met separately with then-Speaker Thom Tillis and Senate President Pro Tem Phil Berger about legislation to legalize the industry, and he said he raised campaign funds for them (pages 35-37 of the SBE report).
  • After months of talking with SBE staff about the Burns investigation, SBE member Paul Foley finally recused himself when staff discovered
    that his law firm was paid more than one million dollars by Burns’ company, IIT. However, Foley continued to push staff for confidential information about who they were interviewing and other details (Attachments C, D, and E of the SBE report).

These are some of the intriguing facts that need further exploration. Mr. Burns did not agree to be interviewed for the report. Candidates were not interviewed about their meetings and fundraising.”

Hall and Democracy North Carolina, of course, came to national prominence back in the mid-2000’s when the group helped bring to light the corruption of former Democratic House Speaker Jim Black. For more information on the Board of Elections and the resignation of member Paul Foley who was at the center of the sweepstakes mess, click here, here, and here.

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