Trying to buy state government?
To understand why a once-obscure sweepstakes industry businessman from Oklahoma, now arrested and disgraced, would dole out about a quarter of a million dollars to North Carolina political candidates, you have to consider a “what if.”
That is, what if the N.C. Supreme Court had ruled in December that state officials couldn’t shut down Internet sweepstakes parlors? Political analysts say that was the bet Chase Burns, operator of International Internet Technologies, made last year as he funneled campaign donations to Republican Gov. Pat McCrory and 67 N.C. General Assembly candidates of both major parties.
The Supreme Court upheld the law banning games of chance at sweepstakes parlors. But when Burns was making his contributions, no one knew how the state’s highest court would rule. Had the court thrown out the law against sweepstakes parlors, Burns’ contributions would have given him an inside track to make connections with Republican and Democratic lawmakers, said Bob Phillips, executive director of North Carolina Common Cause.
“Money, at that level, is used as a tool to nurture relationships and put someone in a position to have an advantage in getting what they want. Clearly he wanted something,” Phillips told The High Point Enterprise.
Burns’ campaign contributions drew high-profile notice in early March after he was arrested and charged with fraud in a case out of Florida. Federal and Florida state law enforcement officials say that Burns took in millions of dollars through sweepstakes parlors in the Sunshine State. The proceeds he’s charged with pocketing were supposed to go to a charity benefiting military veterans.
Quietly spreading the campaign wealth
In mid-March, the Durham-based political organization Democracy North Carolina released a detailed report showing how much money Burns gave to state political candidates. The money included donations to three Republican and two Democratic area state legislators — Sens. Phil Berger, R-Rockingham, Jerry Tillman, R-Randolph and Gladys Robinson, D-Guilford; and Reps. Alma Adams, D-Guilford, and Jerry Dockham, R-Davidson.
In all, Burns and his wife funneled $235,500 to 67 state legislative candidates — 63 of whom took office after the Nov. 6 general election — as well as to other statewide candidates and political groups, according to Democracy North Carolina. Burns quietly became the single-largest donor to N.C. General Assembly candidates during 2011-12.
Many of the donations that Burns made took place two weeks to 10 days before Election Day, meaning they wouldn’t show up on final campaign reports until after voters went to the polls, said Bob Hall, executive director of Democracy North Carolina.
Despite the Burns’ scandal, Hall said, the sweepstakes industry continues to lobby North Carolina elected officials to come up with a way to resume Internet games of chance in the state.
“It raises a red flag for any legislator who is thinking about legalizing this industry,” Hall told the Enterprise.
A cautionary tale of money and politics
The Burns case offers a volatile example of the danger of high-dollar money in politics, said Phillips, whose group is based in Raleigh.
At the same time the Burns case has gained notoriety, legislation under consideration this year in the General Assembly could heighten the influence of private money on campaigns, Phillips said.
At least three bills introduced during this legislative session would eliminate the use of public money in statewide judicial elections, Phillips said.
Ten years ago, the state launched an effort to encourage statewide judicial candidates to take public campaign funds instead of private contributions, Phillips said. One purpose of the reform is to eliminate private contributions to judicial candidates from special interests that would bring matters before the court system.
“This alternative has cut that source of money from 80 percent of interest money to less than 20 percent,” Phillips said.
But Phillips worries about how the elimination of public money for judicial campaigns would increase the possibility of a future scandal, like the one with sweepstakes parlors, involving big-time private campaign contributions.
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New Gov. Pat McCrory has become entangled in the scandal involving campaign donations by sweepstakes industry operators. In the past month, McCrory’s campaign has donated to charity $10,000 in proceeds from two separate sweepstakes industry businessmen who now are under arrest for fraud. The donations were made to McCrory’s campaign during his run for governor last year prior to the men’s arrests.