By Hunter Hines
Christian Action League
July 16, 2015
RALEIGH – Wednesday, the State Board of Elections announced that after a two-year probe, it had found no violations of the law concerning campaign contributions made to lawmakers from Oklahoma Sweepstakes magnate, Chase Burns.
The report, however, does show the sneaky way contributions can get around campaign finance laws to influence public policy. Moreover, it shows the wide expanse of sweepstakes gambling influence on the state.
In 2013, Burns pleaded guilty to two counts of assisting in the operation of an illegal lottery in Florida, a scandal that resulted in the arrests of 57 people and lead to the Lieutenant Governor’s resignation. According to the Florida Department of Law Enforcement, Burns’ operation falsely claimed to be a charitable veterans’ organization, but instead deceived both the public and the government while lining the pockets of its operators.
According to various media reports, Burns contributed more than a quarter of a million dollars in donations to Democrat and Republican candidates in North Carolina during the 2012 campaign. During this same period, sweepstakes companies were also fervently pressuring lawmakers to legalize sweepstakes gaming in the Tar Heel state.
“All of this campaign cash was being spread around during the same time the courts had delivered conflicting decisions about the legitimacy of the software for sweepstakes cafes – whether or not they actually fell under the state’s prohibition,” said Dr. Mark Creech, executive director of the Christian Action League. “The sweepstakes industry was pushing lawmakers to end the confusion by making their business legal. And make no mistake; the industry was just as slick about the way it disbursed campaign contributions, as it was about trying to find loopholes in the law to keep operating in a state where it was illegal.”
The government watchdog group, Democracy North Carolina, had filed a complaint in 2013 that initiated the investigation by the state’s Board of Elections. Democracy North Carolina’s director, Bob Hall, had expressed concerns that Burns may have violated state laws banning the use of corporate funds for campaign contributions.
Although the investigation revealed no laws had been broken, Elections board members expressed frustration with the limits of the state’s law. North Carolina prohibits corporate contributions to campaign coffers, but not the source of the corporate money. Director Kim Strach said there wasn’t any evidence of mixing resources, but it wasn’t possible to know with certainty if illegal money had not come to North Carolina from Burns’ trust fund.
Strach said, “Despite the fact that the funds could have been obtained by illegal means, unless there is evidence that the bank account is a business account or that funds from a business were deposited into the trust account in order to disguise the business as the true contributor, the funds would be permissible campaign contributions.”
Board members noted the way the current law reads, you can be someone running drugs, but as long as your drug money comes from a personal checking account before you give it to a politician’s campaign, it’s considered a legal contribution.
Although hundreds of thousands of dollars were given to politicians either to protect or further sweepstakes interests, the Elections Board’s report also revealed that upwards to millions of dollars were payed to North Carolina based law and lobbying firms in partnership with the industry’s objectives.
Questions also swirl around Paul J. Foley, a member of the state Elections Board, who failed to disclose that his law firm, Kilpatrick, Townsend & Stockton, had represented Burns, according to the state attorney general’s report obtained by the Associated Press (AP).
The AP rightly noted that a North Carolina ethics law requires officials remove themselves from proceedings if they have a financial relationship with a participant, but Foley didn’t step aside for nearly a year and a half, until Strach discovered nearly $1.3 million in prior payments for legal services had been paid by Burns’ company to Foley’s law firm.
According to Strach, Foley finally did remove himself from the case. Still, he continued to press for information regarding the ongoing investigation. Strach shared her concerns with Elections Board Chairman, Joshua Howard, who requested the state attorney general’s office take a look into the matter.
According to the AP, the attorney general’s (AG) office could not find that Foley had acted improperly; neither did they find that he had harmed the investigation. However, Senior Deputy Attorney General Alexander Peters said that the AG’s office did not investigate “whether Foley might have leaked details of the confidential investigation. He said the ethics commission or the Bar Association would be responsible for addressing those questions.”
“I think it’s critical for us to see just how expansive – how far-reaching gambling interests can be. Consider the area – the spread – the breadth of it – the vastness of the industry’s dubious power and influence,” said Dr. Creech. “Here’s a form of gambling operating illegally in our state that has the state’s highest powered law firms, its highest powered lobbyists in partnership with them, all the while greasing the hands of politicians and seductively arguing they wanted to be regulated and taxed so they could operate respectably and help the state garner revenue. It would be laughable, if it weren’t so duplicitous.”
Dr. Creech continued, “I have, on a personal level and professionally, in my capacity as a lobbyist, begged our state’s lawmakers to stay away from this mess. Gambling stains and corrupts everything it touches, especially forms like video poker and sweepstakes. It presents itself as an angel of light, but its nature is to rob, kill, and destroy. I am disappointed to see in the Elections Board’s report where so many of our state’s lawmakers took money from Burns. Whether their campaigns really knew where the money was coming from or not, I don’t know. But it does raise the question, how resolute are they against gambling? It’s morally wrong to take money tainted by an illegal operation in our state, even with the prospect of making it legal.”
Hall says the Elections Board’s report raises more questions than it answers and called for law enforcement agencies to look into the donations made.
Dr. Creech added that there was a push by some lawmakers to take up sweepstakes gaming legislation this legislative session, but he was relieved when a House Republican caucus decided not to take it up.
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