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NC agents investigate sweepstakes donations to politicians after no elections violations found


RALEIGH, North Carolina — North Carolina law enforcement officers have started probing whether sweepstakes industry businessmen funneled money to politicians to get them to legalize their business, a State Bureau of Investigation spokesman said Tuesday.

The development comes four months after state elections officials said they could find no state campaign finance law violations involving the questioned donations.

The state's top detective agency launched its probe at Wake County District Attorney Lorrin Freeman's request, SBI spokesman Shannon O'Toole said.

Freeman's office prosecutes criminal cases involving state agencies or officials. She asked the SBI to start looking into the industry last month, a step first reported by The News & Observer of Raleigh late Monday.

Freeman asked the SBI for a deeper look after the State of Board of Elections said in July it could find no state campaign finance law violations involving the funds, including more than $270,000 to the campaigns of top North Carolina officials from Oklahoma Internet sweepstakes magnate Chase Burns. Freeman wants the SBI to look into Burns' contributions during the 2012 election cycle, O'Toole said.

Elections officials noted in their July report that they lacked power to interview unwilling players.

For example, the report said elections board investigators could not fully interview sweepstakes operator William George of Rock Hill, South Carolina. He and Mocksville sweepstakes baron David Hagie hired the Charlotte-based law and lobbying firm Moore & Van Allen to "help push a bill legalizing sweepstakes games through the Legislature," George told The Associated Press in 2013.

George said about $40,000 per week in profits from his and other Internet cafes were used then to fund lawyers and lobbyists as operators fought a feared shutdown of the lucrative Internet cafes that dot North Carolina offering games that mimic Las Vegas-style slots.

Gov. Pat McCrory worked at Moore & Van Allen while running for governor. George said the Charlotte firm was picked in 2012 to help push legislation legalizing sweepstakes games because McCrory was considered a shoo-in for governor. In 2013, McCrory denied participating in any discussions about sweepstakes legislation while working at the firm.

McCrory took no questions from reporters Tuesday at a ribbon-cutting event in Raleigh. McCrory spokesman Graham Wilson said the governor had a busy schedule. A McCrory campaign spokesman declined to comment.

The elections board launched its two-year investigation after The AP found that Burns and his wife were among the top donors to North Carolina candidates in 2012, as the industry was lobbying lawmakers to overturn the state's ban on the games.

Court records show the bank account used to issue campaign checks to North Carolina candidates of both political parties received regular transfers directly from accounts tied to Burns' sweepstakes company: International Internet Technologies of Anadarko, Oklahoma. That bank account and others were later seized as part of a criminal investigation into Burns. Prosecutors described the money as the proceeds of an illegal gambling enterprise.

But state elections investigators determined a Burns checking account was originally opened in 2005 as a personal savings account, so officials decided the campaign money came from personal contributions.

Investigators found that Burns paid $7.8 million to Grace, Tisdale & Clifton and $129,000 to Moore & Van Allen between 2009 and March 2013, when Burns was arrested and his accounts were frozen. The Winston-Salem based law firm mailed campaign donation checks to Moore & Van Allen, which would mail the checks to the political committees of candidates.

Bob Hall, executive director of Democracy North Carolina, asked Freeman and Raleigh-based federal prosecutor Thomas Walker to dig deeper after the elections board inquiry closed in July.

Freeman's request for the SBI investigation "is the clearest indication that one of the agencies is moving forward," Hall said.

Hall said he also has met with FBI officials. Shelley Lynch, an FBI spokeswoman in Charlotte, declined to comment Tuesday.

Associated Press writer Gary D. Robertson contributed to this report.

Follow Emery P. Dalesio at http://twitter.com/emerydalesio . His work can be found at http://bigstory.ap.org/content/emery-p-dalesio

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