A Charlotte TV reporter appears to have gotten under the skin of some powerful state legislators (including House Speaker Tim Moore) with his energetic reporting about their incomplete campaign finance reports — enough so that one has to wonder why the lawmakers would be so concerned. This is from

“Republican members of the North Carolina House of Representatives were advised Wednesday to not speak with a WBTV reporter who is investigating Speaker Tim Moore (R-Cleveland) over his failure to itemize campaign expenses made with credit cards.

Investigative reporter Nick Ochsner began investigating Moore and two members of the North Carolina Senate in September following a review of campaign finance reports for all 43 Charlotte-area lawmakers.

FULL STORY: NC House Speaker Tim Moore amends five years of campaign reports after state audit

On Wednesday, Representative Charles Jeter (R-Mecklenburg), who is the House Republican Conference Chair, emailed all Republican representatives instructing them not to talk with Ochsner.

“I wanted to follow up on the Speaker’s note from the weekend. If Nick Ochsner the reporter contacts you I urge you to not take his calls. If you did not know he applied to be Tim’s Comms Director,” Jeter wrote in the email. “If you are asked about your campaign finance report or have questions about your expenditures please reach out to Madison for help.”

Madison Shook handles fundraising for the House Republican Conference.”

Click here to read the rest of the story.

Click here to watch a cringe-inducing interview with Moore in which the speaker all but runs away from Ochsner and his camera operator.

Bob Hall

Democracy NC Executive Director Bob Hall speaks to the media in front of posters documenting sweepstakes industry contributions to Gov. McCrory, Senator Phil Berger and former Speaker Thom Tillis in August.

Raleigh’s News & Observer reports this morning that Wake County District Attorney Lorrin Freeman is investigating the ties between gambling industry executives and some important state political leaders and has asked the FBI for assistance. The news comes months after the State Board of Elections chose not to pursue the matter further following a lengthy but incomplete investigation.

For those who may have forgotten, here is what advocates at the government watchdog group Democracy North Carolina had to say in the aftermath of the State Board’s decision this past summer when they called on Freeman and U.S. Attorney Thomas Walker to investigate “possible criminal violations involving the sweepstakes gaming industry, lobbyists and candidates in the 2012 election, including Gov. Pat McCrory, Senate President Pro Tem Phil Berger, and then House Speaker Thom Tillis”:

“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). Read More

Senator Thom Tillis

One of the this morning’s “must read” editorials comes from the Fayetteville Observer. As the authors note, the recent news about Carolina Rising — the supposed charitable nonprofit that was in fact a thinly disguised front group for the Senate candidacy of Thom Tillis  — tells us much of what we need to know about the sorry state of U.S. campaign finance laws and their enforcement.

Here’s the Observer:

“Bad enough that the U.S. Supreme Court’s Citizens United decision opened the door to unfettered purchasing of elections by wealthy donors. But so much worse when the few remaining restrictions on the buying of elections are ignored, as well.

North Carolina has a picture of how bad it can get. We see it in Carolina Rising, a 501(c)(4) social-welfare organization that apparently served the welfare of just one man: Thom Tillis, who now represents North Carolina in the U.S. Senate.

According to Carolina Rising’s tax filings, the group spent $4.7 million in 2014 on advertising that extolled Tillis’ legislative virtues. He was speaker of the N.C. House at the time, running to unseat then-Sen. Kay Hagan.

Tillis won, in no small measure because of Carolina Rising’s efforts. Afterward, the nonprofit’s director, Dallas Woodhouse, rejoiced for a TV news camera: ‘$4.7 million. We did it.’ Woodhouse, who more recently became executive director of the state Republican Party, later walked that back, saying it was victory-party euphoria, and all of Carolina Rising’s spending was within the letter of the law.”

As the editorial also notes, as weak as the law is, there’s still reason for federal officials to investigate and hope that Carolina Rising will be called on the carpet:

“But where were the Internal Revenue Service and the Federal Election Commission, the agencies that are supposed to police nonprofits and political spending? Apparently, they were hearing no evil and seeing no evil – and they certainly haven’t been speaking up about it.

Like other such groups, Carolina Rising is allowed to keep its donors secret. But the group does have to partially disclose its funding sources, and nearly 99 percent of the money came from one donor.

It would be good to know just who bought the election for Thom Tillis. Even in an era of unrestrained political spending, we should know where the money’s coming from. But “dark money” is gaining a powerful grip on our electoral system.

If Carolina Rising gets away with what it did in 2014, that grip is likely to tighten, and voters will be as deeply in the dark as the money that’s being spent to buy elections.”

Click here to read the entire editorial, “A chance to shine light on ‘dark money’ politics.”


Thom_Tillis_official_portraitRobert McGuire of the nonpartisan Center for Responsive Politics has a fine essay in this morning’s New York Times in which he dissects and decries the absurd circumstances surrounding the “charitable activities” of Carolina Rising, the nonprofit “social welfare organization” that spent millions of dollars last year (almost all of it from one undisclosed person) to elect Thom Tillis (pictured at left) to the U.S. Senate.

As McGuire explains, Carolina Rising couldn’t even abide by our already absurdly lax federal rules:

“Election-related spending by groups that don’t disclose their donors has grown exponentially in the last few years, thanks in part to the Supreme Court’s 2010 ruling in Citizens United v. F.E.C. The expenditures reported by these groups rose from just under $6 million in 2004 to $308 million in the last presidential election. This time around, that spending is already at $4.9 million, more than tenfold what it was at the same time in the 2012 cycle. And that doesn’t include the significant chunks of political spending that go unreported.

Still, groups like these are obliged to follow some basic rules: 501(c)(4) organizations are not supposed to spend a majority of their resources on political activity, a requirement that leads to impressive accounting and definitional acrobatics. More important, these groups are not supposed to function for the private benefit of an individual or a select group.

Carolina Rising appears to have broken both rules. Read More

Commentary, News

Sen. Thom Tillis

[UPDATED] In case you missed it yesterday, there’s a fascinating story percolating in the insider world of big money politics right now surrounding the group Carolina Rising, which was headed during the months leading up to the 2014 election by longtime conservative activist and current state Republican Party executive director, Dallas Woodhouse. (The Center for Responsive Politics has extensive coverage of this story as well — click here to read.)

Yesterday, the nonprofit watchdog Citizens for Responsibility and Ethics in Washington (CREW) filed a complaint with the Internal Revenue Service in which it alleges that Carolina Rising violated IRS rules surrounding the permissible activities of 501(c)(4) nonprofits. The complaint asks the IRS to: “investigate whether Carolina Rising…violated the tax code by operating primarily to influence political campaigns and for the private benefit of now-Sen. Thom Tillis (R-NC), and whether Carolina Rising and its president, Dallas Woodhouse, violated federal law by failing to disclose on its tax return nearly $4.7 million Carolina Rising spent on political activity in 2014.”

The gist of the complaint is that Carolina Rising acted, despite its claims to be an issue advocacy group, as a campaign organization that existed to get Tillis elected. This conclusion is boosted, the complainants argue, by Woodhouse’s own admission to a TV reporter on the night of Tillis’ election in which the following exchange took place:

Reporter: “You spent a whole lot of money to get this man elected, right?”
Woodhouse: “4.7 million dollars! We did it.”

In addition to the tax code issues raised by the complaint, another fascinating aspect to the story is the question of who funded Carolina Rising. This is from a summary of the issue posted by CREW yesterday: Read More