Investigation shines light on pay to play politics

by Patrick Gannon, The Insider, July 21, 2015.

The recent State Board of Elections probe into contributions made to political candidates from the sweepstakes gambling – although they might call it gaming – industry offers a window into the role of big money in North Carolina's political process.

It shows the extent to which wealthy and ambitious people will go to get their wishes fulfilled in the General Assembly – if not always successful – and the role of lawyers and lobbyists in those efforts. It's a good read for anyone who wants to know more about the inner workings of today's politics.

In its 123-page report, drafted after a two-year investigation, the State Board of Elections decided that it didn't appear that Chase Burns – owner of International Internet Technologies LLC of Oklahoma – violated campaign finance laws in donating nearly $275,000 to N.C. political candidates in 2012. Many contributions were for $4,000, at the time the maximum amount that could be given per election. IIT sold software to the sweepstakes industry.

Burns' cash went to about 90 state legislators and legislative candidates, as well as Pat McCrory, who was running for his first term as governor at the time. Burns hoped the General Assembly would legalize sweepstakes gambling here. Obviously, a lot of money was at stake.

The watchdog group Democracy North Carolina, whose complaint led to the State Board inquiry, identified Burns as the largest individual donor to General Assembly candidates in the 2012 election cycle. Not long after the checks were deposited into campaign bank accounts, a bill to legalize and tax sweepstakes operations was filed in early April 2013.

Burns had set out to influence that legislation by engaging politically in North Carolina the year before. According to the report, he hired a law firm to lobby on his behalf and provide suggestions on which candidates to spread his cash to. Coincidentally or not, the firm was Charlotte-based Moore & Van Allen, where McCrory happened to work at the time. Burns also hired another N.C. law firm, to which he mailed checks to be distributed to candidates.

But in March 2013, Burns was arrested on racketeering and other charges in connection with an illegal gambling business in Florida, marking the beginning of the end for Burns' efforts in North Carolina. He later pleaded to lesser charges and had to forfeit $3.5 million. The State Board's report suggested that the money Burns spent on the North Carolina campaign donations might have come from illegal activities elsewhere.

The bill to regulate and tax video sweepstakes never made it far in the legislature. The sponsors of House Bill 547 were Rep. Michael Wray, a Gaston Democrat, and Rep. Jeff Collins, a Rocky Mount Republican. In interviews with the Board of Elections detailed in the investigative report, Collins said he lost interest in the bill when he realized the measure would repeal the ban on sweepstakes games. He is opposed to gambling.

But as a result of Burns' arrest, Wray said, "everyone became scared of legislation to help the sweepstakes gaming industry and the climate was not favorable to pass such a bill."

So in other words, if Burns hadn't gotten into trouble, there's a chance sweepstakes gambling might be legal and contributing to state and local governments through taxes and fees, much like the state lottery.

And Burns' tainted money would have had something to do with that.