A money-laundering scheme across three states, the resignation of a Lieutenant Governor, flagrant violations of campaign-finance laws, all underpinning illegal gambling might sound like a script from an episode of “Boardwalk Empire.” Unfortunately, it’s the all-too-real environment of pay-to-play politics in North Carolina, and it ties directly to the 2012 campaign of Gov. Pat McCrory.
Computer sweepstakes—video poker and online gambling—have been a legal conundrum in North Carolina for the past decade. The General Statutes clearly indicate the legislative intent of the General Assembly to outlaw video gambling, but somehow these parlors stayed open even after the North Carolina Supreme Court upheld a ban on video sweepstakes in 2012. It’s one of those legal questions that appears to be an anomaly, and when it appears there’s an anomaly in lawmaking, that’s a good indicator there’s money involved.
As it turns out, operators of online gaming parlors have been smart enough to use software programs that exploit loopholes in the laws regarding gambling in North Carolina. Essentially, customers buy a small item, such as a prepaid phone card, then log on to see if they’ve “already won” before they start playing. Schemes such as this are nothing new, but this software is clearly intended to circumvent the law. Democrats have attempted to regulate and tax these machines through different legislative proposals, but the Republican-controlled General Assembly continues to keep the bills from the floor while law enforcement and the courts squabble about the legality of the whole fiasco. There’s one party that has an interest in perpetuating this state of limbo in which parlor owners exploit the law—the companies making the software.
That’s where Chase Burns comes in. Burns owns a company called International Internet Technologies, which is based in Oklahoma and makes the software video sweepstakes machines run on. In 2013, Burns was convicted of running a money-laundering scheme in Oklahoma and Florida, which funneled hundreds of thousands of dollars to political candidates under the auspices of a veteran’s charity organization. Eventually, the state of Oklahoma seized $3.5 million from Burns and his wife Kristin, and the Lieutenant Governor of Florida resigned as a result of the investigation. But Oklahoma and Florida weren›t the only states that Burns was slinging money into. McCrory and dozens of other North Carolina politicians received a total of more than $235,000 from Burns in the 2012 election cycle, according to the watchdog group Democracy NC.
Burns wrote checks to several different campaigns from several different accounts, some of which may have contained money from IIT, according to Democracy NC. It’s illegal to donate business funds to campaigns under North Carolina election law. Burns also funneled that money through Moore and Van Allen, a law firm that used to employ McCrory. In North Carolina, it’s illegal to donate to campaigns under an identity that is not your own. That’s two counts of illegal campaign financing in North Carolina. Finally, North Carolina law prohibits donating more than $5,000 to any single candidate in a cycle. But Burns allegedly donated more than that amount in at least one instance, to state Senate Leader Phil Berger. Three strikes, you’re out, Mr. Burns.
It’s worth noting that election laws are meant to govern both the politician and the financier, meaning any elected officials who accepted these funds would be implicated in a subsequent investigation.
It’s remarkable there has been so little coverage of this story despite the fact that numerous Republicans (and to be fair, a few Democrats) accepted these funds in 2012, and Burns was found guilty in two other states.
It’s also remarkable that the Republican Party in the General Assembly is bent on outlawing these gaming parlors apparently to protect the financial interest of Chase Burns, and possibly others like him. If the Lieutenant Governor of Florida has resigned due to this scandal already, then the North Carolina State Board of Elections has an obligation to investigate this matter from a criminal standpoint. Politics may always be a contact sport, but democracy shouldn’t be a pay-to-play affair.
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