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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
Commentary

If there’s yet to be a nonpartisan defense of Governor Pat McCrory’s behavior in the festering prison-contractor controversy, it sure has been hard to find.

Two days ago, his hometown newspaper (which endorsed him in 2012) called McCrory’s explanation his “latest dog ate my homework excuse” and essentially blasted his claim that he was in a “side conversation” when Graeme Keith made his explicit quid pro quo pitch as unbelievable.

This morning, the Greensboro News & Record termed his response to the story “unconvincing” and said the following:

“The governor’s response does not show that nothing improper or illegal was done. More investigation is needed to make such determinations. The appearance of impropriety is strong, however. If the governor arranges a high-level meeting on behalf of a donor who wants a state contract, that looks like the sort of pay-to-play access that has gotten politicians, such as former Democratic House Speaker Jim Black, in trouble in the past.”

But one of the most damning critiques of McCrory’s behavior and explanation comes from veteran arch-conservative politico Carter Wrenn. As Wrenn wrote on the blog he co-authors with veteran Democrat Gary Pearce yesterday:

“There were nine people in the room when the Governor and the donor met with Prisons Department officials and according to the newspaper, right off, the donor, Graeme Keith, said he’d given a lot of money and it was time he got something in return.

Keith later said he’d never said any such thing but four prison department officials said he had and the Department Secretary, who’s a retired FBI agent, who was sitting at the table said he heard Keith say it, himself, and that Keith said the same thing to him two other times – once in another meeting and once on the phone.

The Governor told the newspaper he didn’t hear Keith say it but added he believed the Prison Department folks were telling the truth….

Graeme Keith got his contract from the Prisons Department and there’s been a lot of squabbling over whether it was a good deal or a bad deal for the state but, at the end of the day, only one fact matters: Did Keith really say he’d made his donations and now it was time for the quid pro quo? Because if he did, that should have been the end of that meeting. And of that contract.”

Commentary

One of the best commentaries yet on the brewing scandal surrounding the McCrory administration’s boneheaded interactions with a prison contractor/campaign contributor comes from the always amusing Barry Saunders of Raleigh’s News & Observer. This is from Saunders’ latest column (“My outrage about this prison story? How cheap it all is”):

“Great day in the morning! The real estate magnate contributed $12,000 to McCrory’s gubernatorial campaign, yet McCrory – according to our story – trekked to Charlotte on Oct. 28, 2014, to help Keith make the case that he should keep his $3-million-per-year prison maintenance contracts. Never mind that state officials felt the state could handle the job more efficiently and with more safety, savings and accountability.

Keith’s little-bitty largess bought a place at the table with the governor and other state officials, a table at which – according to a memo of the meeting – Keith proclaimed that since politicians had danced to the music, they now had to pay the piper. That since he had greased their palms, it was time for them to grease his, too.

Only difference appears to be that he greased theirs with a thimbleful and they greased his with a big ol’ tub o’ lard.

McCrory acknowledged being at the meeting, at the table, even, but said he didn’t hear the big payback pronouncement because he must’ve been engaged in a side deal – I mean a side conversation.

Anything is possible, but it’s hard to believe that McCrory, seated at the same table, didn’t hear what the stentorian, 6’5” former jock said about the reciprocation he expected. According to the memo, ‘The meeting began with the Governor McCrory making a few remarks and turning the meeting over to Graeme Keith.’”

Saunders goes on to point out that Keith gave lots of dough to Democrats in his time too and just how modest and commonplace such a contribution is:

“Who knew you could buy influence for that kind of lightweight lettuce?

I’ll tell you what: If we’d known that political influence could be bought so cheaply in North Carolina, my buddies and I would have churched up 10 years ago, bought us a pol and ensured that we kept the late, lamented 14 Karat Dinner Theater open.

If word gets out that our governor can be summoned for less than the bag boy at Piggly Wiggly makes annually – $12,000 comes out to about $6 an hour – McCrory will be a laughingstock at the next national governors’ ball.”

Sadly, Saunders is probably right on the money. Read the entire column by clicking here.

Commentary

In case you missed it, one of the weekend’s best editorials appeared in Saturday’s Greensboro News & Record. It blasted the General Assembly’s dreadful 11th hour addition to the already problematic bill to move next year’s primary election to March. A day after Chris Fitzsimon rightfully called the bill “what may be the most shocking piece of legislation passed in this General Assembly,” the N&R put it this way:

“It allows the creation of ‘affiliated party committees’ controlled by the speaker of the House, president pro tem of the Senate or House and Senate minority leaders. Bob Hall of the watchdog group Democracy North Carolina called them slush funds that could raise unlimited amounts of money from corporations or lobbyists, even during legislative sessions.

‘These changes take us backwards. They undercut the reforms adopted after the deal-making scandals involving House Speaker Jim Black a decade ago,’ Hall said in a news release Friday.

He should know. He and his organization initiated the complaints that led to federal corruption charges against Black, the Democratic speaker.

Hall added: ‘They give wealthy special interests new ways to dominate N.C. politics. And they create new ways for legislative leaders to sell access, steer money into their pet causes and exert control over other legislators.’”

The editorial concluded by calling on Gov. McCrory to veto the bill. And given that the measure only squeaked through the House by three votes, perhaps this once he’ll muster the courage. Click here to read the entire editorial.

Commentary

Today’s big top-of-the-fold story in Raleigh’s News & Observer will be the subject of next Tuesday’s N.C. Policy Watch Crucial Conversation luncheon. As the N&O reports:

“Millions of dollars poured into North Carolina political campaigns in recent years in a futile attempt to keep the video sweepstakes industry legal – much of the money at the direction of a man later charged in Florida with racketeering.

The free-wheeling spending on politicians, lawyers and lobbyists has raised suspicions, although one probe, by the state elections board, found no campaign finance violations. Campaign and ethics watchdogs hope state or federal prosecutors will pick up the trail and investigate more deeply.

The elections watchdog group Democracy North Carolina, whose complaint prompted the two-year elections board inquiry, now wants the U.S. attorney and the Wake County district attorney to determine whether laws against corruption, bribery or other offenses were broken, and for authorities to take another look at potential election law violations.”

Come join us next Tuesday as we get the full scoop on this troubling and thus far under-reported story with the watchdog behind it — Bob Hall of Democracy North Carolina:

Bob HallSweepstakes industry corruption: How far does it go? What should be done?
Featuring Bob Hall, Executive Director of Democracy North Carolina

Join us as Hall explains his findings, what Democracy NC is asking prosecutors to do and the overall state of political corruption in North Carolina politics today.

Click here to register

When:Tuesday, August 25, at noon — Box lunches will be available at 11:45 a.m.

Where: Center for Community Leadership Training Room at the Junior League of Raleigh Building, 711 Hillsborough St. (At the corner of Hillsborough and St. Mary’s streets)

Click here for parking info.

Space is limited – preregistration required.

Cost: $10, admission includes a box lunch.

Questions?? Contact Rob Schofield at 919-861-2065 or rob@ncpolicywatch.com