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Lining 'Em Up 

The forces holding off a lottery

Early on the morning of July 10, North Carolina lottery proponents were feeling pretty good about their odds. Gov. Mike Easley, their chief, had been working hard alongside his supporters to round up the votes he needed in the House of Representatives. Easley was already counting on lottery tickets to help him fill a growing budget deficit, a deal he'd proposed on the campaign trail and committed to in his State of the State speech. Most House Democrats, including a majority of the leadership, were willing to play along. That morning, the pro-lottery forces were relishing the prospect of a long-awaited win--passage of a bill establishing a fall referendum so voters could say they wanted a lottery. Speaker Jim Black had scheduled a vote on the House floor for that afternoon, an indication he was pretty sure Easley's flagship initiative had collected its lucky number--61 "ayes."

That same morning, supporters and critics of state-sponsored gambling gathered at an RTP hotel for the latest round in a debate that's raged in North Carolina for almost two decades. The Durham forum--which just happened to land on the day of the vote--showcased the escalating tensions between the two sides. The N.C. Lottery for Education Coalition, a front group of Easley supporters and campaign donors, accused their foes of seeking to shutter voters' rights and scare the public.

"Lottery opponents don't want a referendum because they think they know the results--North Carolinians are in support of this," said Mark Erwin, a Charlotte businessman and a leader of the Easley PR team.

"These worst-case scenarios and spooky stories are more emotion than common sense, despite the name of one of our opponents," said former UNC Chancellor Paul Hardin, another supporter. "I don't buy the fact that a lottery is some opportunistic abuse-laden exploitation of poor people."

Hardin and his pro-lottery colleagues touted polls that say seven out of 10 North Carolinians support a state lottery. They championed the ballot referendum using a "let the people be heard" platform--a tactic opponents say deflects the real debate and corners lawmakers into eventually voting yes on the actual creation of the lottery, presuming it succeeds in the voter poll.

But Easley's cheerleaders were fairly easy pickings for the unusual alliance that opposes the lottery, represented that morning by Chuck Neely, a conservative Wake County Republican, and Chris Fitzsimon, head of the progressive Common Sense Foundation.

"The state would make a lot more money if people drank more," Fitzsimon said, pointing out the alcohol tax already in place. "Why not have the governor on TV saying: 'Help our schools. Buy another fifth of Jack Daniels on your way home from work today.'"

That afternoon, the momentum the pro-lottery forces had marshaled over the last year and through the first seven weeks of the legislative session failed to overpower the coordinated lobbying of the anti-lottery forces, who were backed up by several high-profile Democrats refusing to yield to gubernatorial arm-twisting.

It looked like the lottery's magic moment had come and gone without success, though Neely says he won't relax until the session officially ends.

If it's truly done, it will be a stunning victory for the patchwork of vastly diverse individuals and groups--many of whom clash with each other on most other political issues--that are loosely organized under Neely's Citizens United Against the Lottery. The group's agenda summons support from Republicans and Democrats, conservatives and liberals, anti-abortion "family values" groups, religious leaders, civil rights activists, progressive leftist think-tanks and business people. It includes the John Locke Foundation and the N.C. Justice and Community Development Center and UNC's Dean Smith, C.D. Spangler and Bill Friday. The list goes on: Lauch Faircloth, John Hope Franklin, State Superintendent of Schools Mike Ward and Rep. Dan Blue (D-Wake), who split with the legislature's entire Black Caucus.

"It doesn't matter whether they are liberal or conservative--they are all principled people who care about what's good for the state of North Carolina," says Neely, a former lawmaker.

After initially supporting lotteries as a way to raise revenue for important programs, Neely changed his mind shortly after taking office in 1994.

"The more I read, the more I came to believe it was really bad policy," says Neely, whose top three personal reasons against are: "it's a sleazy way to raise money"; "it's predatory on poor folks"; and "the state government ought not to urge its most vulnerable citizens--or any citizens--to gamble to get ahead in life."

Last year, when it became clear Easley was shifting the measure into high gear, Neely and several like-minded friends such as Spangler and Friday pulled the umbrella organization together. Neely acts as the lottery opponents' volunteer spokesman in addition to practicing law at Maupin, Taylor & Ellis--a Republican powerhouse in Raleigh--and having several lobbying clients of his own.

When he's speaking in media interviews and public debates, though, he's quick to deflect credit for the group's (so far apparent) success. Instead, he praises the work of active members and the strength of the groups that make up his coalition.

"The common denominator is each of these groups have a public policy platform that they believe is good for the state," Neely says--even if they disagree on everything except the lottery.

A retired U.S. Navy captain who served in Vietnam, a lifelong Boy Scout, and former chair of the N.C. Young Republicans, Neely's personal politics--anti-abortion, pro-school choice, and "families first"--line up more with the conservative Family Policy Council than the leftist groups of his coalition. A native of Raleigh and a graduate of UNC-Chapel Hill and Duke Law School, he has been awarded honors by the business booster group N.C. FREE and the Christian Coalition.

Neely, who served four and a half years in the House, calls himself a "recovering politician," though some political observers speculate his anti-lottery stumping is groundwork to shore up conservative Christian support for another gubernatorial campaign. He ran unsuccessfully in 2000, losing to Charlotte Mayor Richard Vinroot in the primary. Neely calls another run at the governor's seat "unlikely."

How big a gap?
On the House floor on July 10, Black stalled for time when it became clear his side was still a handful short of yeses. The session adjourned without a vote that evening, with Black promising to carry it over to the next day's agenda. He said he was honoring lawmakers' requests for "more time." Still, the initial fizzle was a painful blow to lottery supporters, who had watched several factors coalesce in their favor this year: a governor enthusiastically putting it at the top of his agenda; a budget hole topping $1.5 billion just ripe for rescue with what they tout could be $500 million annually in gaming revenue; and House Democrats, fearing Election Day in the wake of an unfavorable redistricting decision this spring, hoping to bring voters out to the polls for a referendum on a popular proposal. That's not to mention the ever-present industry profiteers renewing their annual courtship of untapped Tar Heel markets.

Black kept the bill on the calendar, but the next day passed, too, without a vote. Headlines went from "Lottery Begins Roll in House" to "Budget Tops Agenda, Lottery on Hold," while lobbyists on both sides of the issue stepped up the pressure behind the scenes and in public debates.

Leaving the lottery bill on the House calendar day after day without a vote is an unusual tactic for the speaker, one that state House watchers say they haven't seen before and struggle to interpret. While it's not unusual for a bill to sit for a day or so before being voted up or down or sent back to committee, Fitzsimon likens the evergreen position to "lingering like a bad cold." On a practical level, it means the speaker could call the question on very short notice, if, say, enough lottery opponents are absent any particular day. But Neely says Black promised he would play it straight, and not surprise them, and so far he has kept his word.

When the legislature adjourned that weekend, political observers speculated the governor and his henchmen would spend the next three days calling in as many chips as they could muster for a second try. In the meantime, the odd lull in the endgame spawned a debate about just how big a handful of votes they were short.

That Sunday, July 14, a front-page article in The News & Observer put the margin at three. But by the time the House reconvened Monday night--with a potential vote still hanging in the air--most head-counters were speculating the gap was never closer than six or seven, and might be growing.

On Monday afternoon, July 15, a few hours before lawmakers returned to work for the week, chief lottery cheerleader Gardner Payne turned the attack up a notch.

"The anti-lottery folks have used their wealth and power to silence the debate," declared Payne, the lobbyist for the N.C. Lottery for Education Coalition.

Those were strong words coming from a man who less than a week earlier, in the hotel ballroom the morning victory seemed at hand, had used a fairly innocuous football analogy to describe the strategies of his oddly matched opponents, whom he characterizes as "the far, far left and the far, far right."

Payne's group is much more homogeneous than his opponents', consisting largely of business leaders, including several heavy-hitters on Easley's campaign donors list, who, combined, have given the governor $60,000. A few education-related groups like the N.C. Principals and Assistant Principals Association also have signed on, in hopes of eventually benefiting from new state revenues.

"Most people in the middle support a lottery," says Payne. "All of their groups are made up of people who do this every day--they just oppose issues every day."

For his part, Payne certainly has experience keeping up appearances for governors and other prominent officials. His previous jobs include legislative liaison and assistant press secretary to former Gov. Jim Hunt, and before that, he was the personal assistant to embattled state transportation Secretary Garland Garrett. Garrett, who was forced out of office under a cloud of controversy in 1998, was indicted in December 2001 on charges he collected nearly $2 million in illegal video poker profits from a company he and his father owned. Payne's current job at McGuire Woods Consulting consists primarily of representing the pro-lottery coalition, a position he inherited from the legendarily effective Jay Reiff, a longtime Raleigh lobbyist who left town for a South Carolina job last year. McGuire Woods, a national law firm, has recently expanded its business into the public relations arena, and some lottery critics speculate the firm is paying Payne's assistant vice president salary in hopes of garnering a state-funded PR contract down the road if he's successful. Payne himself confirms his employer hasn't been paid for his services, and insists the pro-lottery coalition has not accepted any donations from industry-related benefactors.

Other issues emerge
The evening session of Monday, July 15, passed, and all day Tuesday, no vote, despite the collective media scampering for a new angle on the story. A week after the bill first surfaced on the House floor, Wednesday the 17th started off with a buzz in the legislative office building. The House finance committee met early to debut a controversial revenue bill, just one of the many components of the state budget up for debate as lawmakers toil to bring the state out of the red. But the anti-lottery forces weren't resting. As the committee meeting wore on, with standing-room-only audience members overflowing into the hall, a smiling John Rustin popped in and out of surrounding offices, hoping for five minutes with a lawmaker or two.

As the director of government relations for the N.C. Family Policy Council for the last five years, Rustin's job has included advocating for abstinence education and against video poker. His group is now suing UNC in protest of one of its freshman reading requirements, a book about the Qu'ran. This summer, the lottery is once again on his plate, and it's "been an absolutely moving target," he says.

"What I can do is really listen," says Rustin of his lobbying technique. "Very often, it's asking questions and letting them answer so you can understand what they're struggling with."

The Family Policy Council can actually claim credit for one prominent convert in the lottery debate: Eight years ago, it was Rustin's predecessor who convinced Neely, then a lawmaker, to reverse his pro-lottery stance.

On the lottery, Rustin joins forces with other members of the coalition who support many policies he opposes--and vice versa. He says it's all part of the job.

"Legislators and lobbyists understand that one minute you may be working side-by-side with someone, and the next minute, working against each other," Rustin says.

Two of Rustin's partners on the opposite end of the political spectrum are coalition members Fitzsimon, of the Common Sense Foundation, and Kim Cartron, of the N.C. Budget & Tax Center, a division of the progressive N.C. Justice and Community Development Center. After the finance committee meeting that morning, Fitzsimon and Cartron stood together as the room emptied, celebrating a victory for progressive policymakers: The budget proposal they'd just heard was shaping up to include the closure of $168 million in corporate loopholes, a long-standing goal of both groups.

"These are important steps forward," said Cartron, whose group is actively working against the lottery but, ironically, has spawned one of the pro-lottery camp's most powerful voices. Cartron and her colleagues have watched, dismayed, as their former leader, Dan Gerlach, has changed camps. Gerlach resigned from the center--and his membership in Citizens United Against the Lottery--to go to work for Easley in January. As Easley's senior policy advisor on fiscal affairs, Gerlach is now lobbying to shore up support for the governor's hallmark issue, despite his articulate anti-lottery arguments topping the literature his former group still circulates.

"People keep asking me if I'm the new Dan Gerlach," Cartron said after the loopholes victory. "I like to say: 'No, I'm actually a lot more like the old Dan Gerlach.'"

A few minutes later, in the building's basement cafeteria, Fitzsimon shakes his head over the disparities that surface in the Citizens United Against the Lottery's weekly strategy sessions. He says he sometimes has to bite his tongue on anti-Republican remarks, particularly when his conservative allies let slip a slam of the moderate Democrats who make up the core of the pro-lottery camp.

Fitzsimon, a 20-year veteran of state politics, spends his non-lottery time on issues like lobbying for living wage reforms and against standardized testing in schools.

After beginning his Raleigh career as a television reporter, Fitzsimon left the media in 1991 to work for Blue, a progressive Democrat who is currently seeking the U.S. Senate nomination. In 1994, Fitzsimon left Blue's office to help create the Common Sense Foundation, a progressive public policy institute.

Fitzsimon, like many activists and lawmakers in lottery limbo, is ready to move on to more pressing issues. The morning's budget deliberations were a start, and the first sign the high-profile distraction was moving toward the back burner.

And yet, "One way you know the lottery's still alive is, there are TV cameras parked outside the statehouse," Fitzsimon says ruefully.

The Democrats
After watching the lottery bill sit on the House calendar day after day for a week, Rep. Verla Insko (D-Orange), another lottery foe, offered a jesting deal to one of her pro-lottery colleagues on the House floor. She said she'd consider taking a lottery proposal to her Chapel Hill and Carrboro constituents (whose calls and emails run 2-to-1 against) if he would ask his tobacco-friendly constituents to back a 50-cents-a-pack increase in the cigarette tax. He said no deal.

Insko is among the lawmakers starting to resent the time and effort the lottery battle has taken away from other more important problems, especially the budget deficit. Even if it were enacted this session, resulting revenues would still be a ways off, and Insko, for example, grows increasingly alarmed at the crisis-inducing cuts to health and human services programs that loom inevitably.

Insko is also among a small group of House Democrats bucking their governor and their party leadership to say no. Within the House Democratic leadership, another Orange County lawmaker and Speaker Pro Tem, Rep. Joe Hackey (D-Orange) and his colleagues, Reps. Paul Luebke (D-Durham) and Ruth Easterling (D-Mecklenburg), form a small minority under a large amount of pressure from colleagues.

"The governor calls me and tells me what he would do with the money," says Hackney, who's standing firm in the "no" camp.

Another Triangle Democrat, Rep. Jennifer Weiss (D-Wake) says wrestling with the lottery question has been painful, but after much wrangling with arguments on both sides, she can't vote yes.

"I certainly share the governor's concerns about education and want to be a team player," says Weiss, who last year ate breakfast with some Georgia lottery officials being hosted by the governor in one of his early lobbying attempts. "I'm committed to the end results, but I really have a problem with the means."

Weiss has channeled some of that frustration into trying to drum up support for a tobacco tax, so far with little success, and she has challenged the anti-lottery activists to put forward some other revenue-raising alternatives.

What's next?
Thirty-seven states and the District of Columbia generate government funding with lotteries, many of them claiming to and some of them actually earmarking the money for education. In Georgia, whose model is often touted here, high school students with good academic records attend public colleges tuition-free thanks to lottery proceeds. Easley says he intends to use the money to help public schools pay for pre-kindergarten programs, teacher salaries and other important initiatives that are hard to condemn. But nowhere in the list of reasons the opponents oppose a lottery is, "I'm against more money for schools."

Rather, the list is as varied as the coalition's diverse membership. Some say it's an unreliable revenue stream on which to base funding for core programs, and there's no guarantee lottery funds will supplement rather than supplant existing funding. Others point to studies that show support for school bonds and other educational expenses wanes in lottery states because voters and taxpayers believe it's a one-time cure-all. Merchants argue money spent on lottery chances is disposable income withdrawn from other sectors of the economy, such as restaurants and retail stores. Other reasons include: the state puts itself in the business of encouraging and benefiting from something that was previously illegal; gambling in general is morally or religiously objectionable to some; and the "get-rich-quick" premise preys disproportionately on the poorest members of our society, who have less income to spend and more motivation to take a wild chance.

Each coalition member chooses their own approach in articulating their opposition, and the N.C. Council of Churches lobbyist, George Reed, says he focuses on the last two arguments. Not even all church people can agree on the reasons to oppose the lottery, Reed says, so the larger alliance he now belongs to at the Citizens United Against the Lottery provides an entertaining mix.

"It's certainly is a very unusual coalition of groups and individuals--they've really been giving it their best shot," Reed said July 17 as the House wrapped up yet another day without a lottery vote, while the numbers leaned the opponents' way by a margin of six or seven. "Knock on wood, maybe it's going nowhere."

But Easley hasn't given up. When, on July 19, a Superior Court judge gave the state 10 days to create a plan to better educate at-risk students, in response to the long-standing Leandro lawsuit filed by poorer school districts, Easley gained another weapon. After telling the Charlotte Observer lottery opponents now had the "political cover" they needed to vote yes, Easley wrote a letter to all 170 legislators on July 22, pressuring them to fund his education initiatives with a lottery to combat the lawsuit.

Also that day, Speaker Jim Black said publicly he would not bring the lottery bill forward until the budget deadlock is broken. Nearly a month past the start of the fiscal year, lawmakers are still struggling to agree on any proposals to raise revenue, the first order of business over the next few weeks. Still, the lottery referendum remained on the House's daily calendar, keeping its foes on watch.

"I won't think we've won until they adjourn," Neely says. EndBlock

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