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Thursday, August 6, 2015

Democracy North Carolina calls for criminal probe of sweepstakes donations

Posted by on Thu, Aug 6, 2015 at 5:54 PM


PHOTO BY BOB GEARY
  • Photo by Bob Geary

In the years leading up to 2012, pseudo-legal video sweepstakes parlors were popping up across North Carolina, Pat McCrory’s campaign was getting into gear and Thom Tillis and Phil Berger were seeking to preserve their roles as House Speaker and Senate President Pro Tempore.

Gambling industry players, mired in court cases and needing the protection of North Carolina law, felt like the political environment was finally conducive to them being able to legalize the industry in the state. Industry operatives and their lobbyists began to meet with McCrory, Tillis and Berger, and, following those meetings, dumping huge sums of money into their respective campaigns.

Some of this is outlined in a State Board of Elections investigative report that concluded last month, but elections watchdog group Democracy North Carolina, which filed the original complaint, says the investigation was flawed or incomplete in many ways, and needs further scrutiny. Democracy NC director Bob Hall identified five reasons why a new probe should be initiated, outlined in a letter delivered Thursday to US Attorney Thomas Walker and Wake County District Attorney Lorrin Freeman.

“We need to have another independent investigation done in an objective, comprehensive way,” Hall said at a press conference Thursday morning. “There could have been some violations of state law and some of federal law.”

The July report describes lobbyists with two firms organizing several events between sweepstakes industry representatives and North Carolina candidates, but it doesn’t investigate whether candidates who received money from sweepstakes industry donors made a commitment to pursuing legalization of video gambling—whether they accepted a bribe, in other words.

On February 23, 2012 for example, McCrory met with sweepstakes representative Gardner Payne and industry lobbyist Harry Kaplan from the McGuireWoods firm. Then on March 3, $34,000 in checks from sweepstakes donors arrived in McCrory’s campaign account. If some kind of deal was made at the February meeting, Hall says, it’s a violation of federal campaign laws, whether McCrory followed up on his end of the bargain or not.

Together McCrory, Tillis and Berger received more than $250,000 for their 2012 campaigns from sweepstakes donors, who poured more than $600,000 into North Carolina overall (Tillis, who got the most, actually started receiving money from the industry in 2011).

The report found that Tommy Sevier, a lobbyist with the Moore and Van Allen firm, admitted to violating a state law prohibiting a lobbyist from delivering a bundle of different donations from different donors to a candidate. Sevier, personally or by mail, delivered several donations from sweepstakes software provider and industry leader Chase Burns’ trust fund to North Carolina legislators like Berger, and the Democratic gubernatorial candidate Walter Dalton. Though Sevier admitted to this, no action was taken against him by the Board of Elections since there is not a specific penalty tied to illegal bundling of campaign contributions; Democracy NC is calling on Sevier to be prosecuted. (McCrory also worked at the Moore and Van Allen firm during his run for Governor, though not as an attorney). 

click to enlarge Chase Burns' mugshot
  • Chase Burns' mugshot






















Democracy NC says the Board of Elections report was obstructed by Paul Foley, a Winston-Salem attorney appointed to the Board of Elections by McCrory, whose law firm Kilpatrick Townsend and Stockton LLP represented Chase Burns’ corporation, International Internet Technologies (Burns, from Oklahoma, has been indicted in Florida for racketeering; he and his cohorts were major donors).

Foley, who has since resigned, never recused himself from the elections board’s investigation and allegedly ran interference on behalf of his gambling industry clients.

“During the investigation, [Foley] pushed the board’s staff for information about who was being interviewed and other details,” Democracy NC states in a press release. “When the staff later learned that Foley’s law firm had been paid over a million dollars by Burns’ company, Foley recused himself, but he continued to pressure staff for information.”

click to enlarge Paul Foley - PHOTO CREDIT: BERTRAND GUTIERREZ
  • Photo credit: Bertrand Gutierrez
  • Paul Foley
























Also at issue is whether Burns’ $270,000 in donations to North Carolina candidates were personal as he claimed (and as the State Board of Elections affirmed), or whether it came from his corporation, IIT, illegally. The Moore and Van Allen law/lobbying firm directed donations to lawmakers and candidates from IIT, which, as a political strategy, would appear to be a business transaction (though Burns shuffled that money through his personal account).

Finally, there is the question of whether illegal gambling proceeds paid out of Burns’ personal account had been laundered; Burns’ Florida indictment describes how his trust fund account was used to launder money, largely through property acquisitions and sales. Donating laundered money to political campaigns is, of course, illegal.

The following charts detail how much McCrory, Berger and Tillis received from sweepstakes donors in 2011 and 2012. Video sweepstakes gambling continues to be illegal in North Carolina. 
click to enlarge Gov. Pat McCrory
  • Gov. Pat McCrory














McGuireWoods executive Harry Kaplan, and his client, sweepstakes operator Gardner Payne, met with McCrory February 23, 2012. Here are the donations from sweepstakes industry people and McGuireWoods clients following that meeting:


Date



Amount



Donor                   



City



State



3/3/2012



$4,000



David Hagie



Clemmons



NC



3/3/2012



$2,000



Freddie L Willis



Troutman



NC



3/3/2012



$4,000



John Myers



Winston-Salem



NC



3/3/2012



$4,000



Kim Childress



Winston-Salem



NC



3/3/2012



$4,000



Matthew Lewis



Asheboro



NC



3/3/2012



$4,000



Neil Hoover



High Point



NC



3/3/2012



$4,000



Richard J. Phillips



Clemmons



NC



3/3/2012



$2,000



Richard Essick



Mooresville



NC



3/3/2012



$2,000



Teresa T Michael



Mooresville



NC



3/3/2012



$4,000



William George Jr



Rock Hill



SC



 



$34,000



Total from Sweepstakes Donors



 



 



3/3/2012



$4,000



McGuireWoods PAC



Richmond



VA



3/3/2012



$4,000



Amerigroup PAC



Virginia Beach



VA



3/3/2012



$4,000



NC State Farm Agents & Associates PAC



Raleigh



NC



 



$46,000



Total from McGuire Woods Clients



 



 


click to enlarge Former House Speaker, now US Senator Thom Tillis
  • Former House Speaker, now US Senator Thom Tillis
























Gardner Payne and McGuireWoods lobbyist Harry Kaplan met with then-House Speaker Thom Tillis on May 10, 2012. The Tillis campaign received $60,000 from sweepstakes donors on May 16, 2012 plus donations from PACs of other McGuireWoods clients.


Date



Amount



Donor



City



State



5/16/2012



$4,000



Brian H Jones



Winston-Salem



NC



5/16/2012



$2,000



Carl Grayson Dockery



Kernersville



NC



5/16/2012



$2,000



Charles (Chuck) Ferguson



Winston-Salem



NC



5/16/2012



$4,000



David P Hagie



Clemmons



NC



5/16/2012



$4,000



Freddie Lawrence Willis



Troutman



NC



5/16/2012



$4,000



Jason M Mitchell



Lewisville



NC



5/16/2012



$2,000



Jerry L Williamson



Rural Hall



NC



5/16/2012



$4,000



John F Myers



Winston-Salem



NC



5/16/2012



$2,000



Johnny H Page



Kannapolis



NC



5/16/2012



$1,334



Joy L Parrish



Kernersville



NC



5/16/2012



$4,000



Kim Childress



Winston-Salem



NC



5/16/2012



$1,334



Malissa Richards Moore



Clemmons



NC



5/16/2012



$4,000



Matthew T Lewis



Asheboro



NC



5/16/2012



$4,000



Neil J Hoover



High Point



NC



5/16/2012



$4,000



Phillip Reopel



Winston-Salem



NC



5/16/2012



$4,000



R.J. Phillips



Clemmons



NC



5/16/2012



$4,000



Richard D Essick



Mooresville



NC



5/16/2012



$1,334



Rick Moore



Winston-Salem



NC



5/16/2012



$4,000



Troy A Dalton



Greensboro



NC



 



$60,002



Total from Sweepstakes Donors



 



 



5/16/2012



$3,000



Amerigroup PAC



Virginia Beach



VA



5/16/2012



$1,000



Association for Home & Hospice Care of NC PAC



Raleigh



NC



5/16/2012



$1,000



Partners for Educational Freedom PAC



Raleigh



NC



 



$65,002



Total from McGuire Woods Clients



 



 


Tillis also received a significant amount of money in sweepstakes donations early on in the election cycle, in September, 2011. The report doesn’t say whether a meeting or anything else prompted these donations.


Date



Amount



Donor



City



State



9/2/2011



$1,000



Ashley G Edwards



Rock Hill



SC



9/2/2011



$2,500



David P Hagie



Clemmons



NC



9/2/2011



$2,000



Frank C Foushee Jr



Sanford



NC



9/2/2011



$1,250



Freddie L Willis



Troutman



NC



9/2/2011



$1,000



Jason M Mitchell



Lewisville



NC



9/2/2011



$1,000



Jerry L Williamson



Lewisville



NC



9/2/2011



$500



Joy L Parrish



Kernersville



NC



9/2/2011



$2,500



Kim Childress



Winston-Salem



NC



9/2/2011



$2,500



Matthew T Lewis



Asheboro



NC



9/2/2011



$2,500



Neil J Hoover



High Point



NC



9/2/2011



$500



Patricia A Earnhardt



Archdale



NC



9/2/2011



$2,500



R J Phillips



Clemmons



NC



9/2/2011



$1,000



Randy L Spainhour



Southport



NC



9/2/2011



$1,250



Richard D Essick



Mooresville



NC



9/2/2011



$500



Rick Moore



China Grove



NC



9/2/2011



$500



Roger Moore



Clemmons



NC



9/2/2011



$2,5000



William George



Rock Hill



SC



9/8/2011



$2,500



Charles Burns



Anadarko



OK



 



$28,000



Total from Sweepstakes Donors



 



 


Senate President Pro Tem Phil Berger
  • Senate President Pro Tem Phil Berger
























Gardner Payne and McGuireWoods lobbyist Harry Kaplan met with Senate President Pro Tempore Phil Berger on September 11, 2012. On September 25, Berger’s campaign received $4,000 from Payne and another sweepstakes donor, $4,000 from the McGuire Woods PAC, and $11,000 from the PACs of three other McGuire Woods clients. On October 10, the Berger campaign received $22,000 from other sweepstakes donors including $4,000 from Chase Burns.


Date



Amount



Donor



City



State



9/25/2012



$2,000



Charles Brooks



Graham



NC



9/25/2012



$2,000



Gardner Payne



Charlotte



NC



10/10/2012



$4,000



Chase Burns



Anadarko



OK



10/10/2012



$4,000



David Hagie



Clemmons



NC



10/10/2012



$4,000



Freddie Lawrence Willis



Troutman



NC



10/10/2012



$2,000



Phillip Reopel



Winston-Salem



NC



10/10/2012



$4,000



Richard Phillips



Clemmons



NC



10/10/2012



$4,000



Richard Essick



Mooresville



NC



 



$26,000



Total from Sweepstake Donors



 



 



9/25/2012



$4,000



McGuire Woods PAC



Richmond



VA



9/25/2012



$4,000



Amerigroup PAC



Virginia Beach



VA



9/25/2012



$3,000



Caremark Rx-CVS PAC



Raleigh



NC



9/25/2012



$4,000



NC State Farm Agents & Associates PAC



Raleigh



NC



 



$41,000



Total from McGuireWoods Clients



 




All numbers compiled by Democracy North Carolina, from State Board of Elections findings.


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