RALEIGH - Sweepstakes operator William George says a longtime business partner asked him early last year to write a $4,000 check to the campaign of Pat McCrory, then the presumptive Republican nominee to become North Carolina’s next governor.
They feared a shutdown of the lucrative Internet cafes across the state offering games that mimic Las Vegas-style slots. State lawmakers had voted to ban electronic sweepstakes in 2010 and the industry’s two-year legal fight appeared headed for defeat before the N.C. Supreme Court.
They sought a new law that would reverse the ban and legalize the games. George, who lives in Rock Hill, S.C., says associate David Hagie assured him McCrory and the Charlotte lobbying firm where the candidate worked, Moore & Van Allen, would help get such a law passed.
“If we needed to write a check to Pat McCrory, I wrote a check to Pat McCrory,” George told the Associated Press in an exclusive interview.
George, 67, said he handed his donation to Hagie, who he then saw add it to a stack of checks from other sweepstakes operators. Those checks and others are the subject of a sworn complaint to the N.C. Board of Elections, which is investigating whether some 2012 political donations from sweepstakes operators violated state campaign finance laws.
The probe is the latest fallout from an investigation into Oklahoma sweepstakes software developer Chase Burns, who last month was arrested on felony charges stemming from a Florida-based veteran’s charity prosecutors allege was used as a front for a $300 million gambling operation.
The elections board was scheduled to meet by telephone today for the first time since the April 22 complaint was filed, and a new five-member board McCrory appointed takes office Wednesday.
George said Hagie delivered the checks to a Winston-Salem law firm — Grace, Tisdale & Clifton. The law firm was to forward the checks to lobbyists to send to the McCrory campaign, George said. Grace, Tisdale & Clifton represents Burn’s company, International Internet Technologies.
Hagie, 53, did not respond to interview requests. Records show he lives in a 130-acre estate outside Winston-Salem with an appraised tax value of more than $2.1 million.
Michael Grace of Grace, Tisdale & Clifton denied George’s allegations Monday night, saying that his firm did not handle any of the checks.
“Our client did not engage Moore & Vann Allen to help them on statewide lobbying efforts until August 2012,” Grace said.
Grace said he would be shocked to find that Moore & Vann Allen had done anything wrong, adding that it is one of the best lobbying firms in the state. Grace also said his firm does not engage in lobbying, but will recommend such firms to clients.
George and Hagie have had long careers operating businesses with games that sometimes skirt state law prohibiting gambling; both have been convicted of gambling-related infractions.
Hagie and Burns hired Moore & Van Allen to help push a bill legalizing sweepstakes games through the Legislature, according to George, and they picked the firm because McCrory was considered a shoo-in for governor.
George said he never met with McCrory or anyone else from Moore & Van Allen, but about 3 percent of the profits from his and other Internet cafes were diverted to a fund to pay for lawyers and lobbyists. He estimated the bill ran about $40,000 a week.
Donors with ties to the sweepstakes industry have given more than $520,000 to North Carolina politicians since 2010, the year the legislature passed the ban.
McCrory’s campaign received more than $82,000, according to disclosure reports. The campaigns of House speaker Thom Tillis and Senate leader Phil Berger received more than $87,000 and nearly $60,000, respectively. McCrory’s campaign has given $18,000 to charity to offset checks from Burns and other donors facing criminal charges. Tillis and Berger have also said their campaigns will donate Burns’ donations.
“We didn’t give them money because we liked them,” George said. “We just knew they were powerful people up in Raleigh and they could get done what we wanted to get done. You give them your money and they’re supposed to do what they say they’re going to do.”
A bill introduced in the House last month by two lawmakers who had received donations from Burns and others would legalize and tax sweepstakes games.
In a March 15 interview, McCrory denied engaging in any conversation about sweepstakes legislation while working at the Charlotte firm. The governor has declined requests for a follow-up interview, but a spokeswoman clarified that as a candidate McCrory “met with representatives both for and against the sweepstakes issue.”
Bank records gathered by Florida investigators and reviewed by the AP show the Oklahoma checking account Burns used to make his North Carolina political donations received large deposits of cash directly from his company, IIT. State law forbids corporate money from flowing “directly or indirectly” to fund political candidates.
The April 22 complaint was filed by the campaign finance watchdog group Democracy North Carolina. It suggested that the overall pattern of the donations received by the McCrory campaign on March 3, 2012, raised concerns lobbyists were involved in collecting or delivering checks to the campaigns. It is illegal under state law for lobbyists to deliver “bundled” contributions from multiple donors to a single candidate.
Randel E. Phillips, general counsel at Moore & Vann Allen, said the firm played no role in delivering the March 3 donations to McCrory’s campaign.
George said he wants the public to know that sweepstakes parlors employ 7,000 people and the proposed legislation would add $500 million to state coffers.
No matter what happens legislatively, he said the machines in his cafes have new software complying with the 2010 sweepstakes law and subsequent court rulings.
“We’ve grown leaps and bounds in a recession,” George said. “We just want to operate just like any other business.”
Journal reporter Michael Hewlett contributed to this story.