VIDEO POKER AND POLITICAL CORRUPTION
On June 29, Democracy North Carolina filed a COMPLAINT AND REQUEST FOR
INVESTIGATION (see link at bottom of this page), asking the State Board
of Elections to investigate “certain campaign contributions related
to the video-poker industry which appear to involve political corruption,
money laundering, and a possible conspiracy by members of the industry
to violate campaign-finance statutes.”
EXCERPTS FROM COMPLAINT CONTINUE:
“This complaint is based on research into more than $100,000 in
campaign contributions given during the 2002 election cycle by donors
with ties to the video-poker industry (not counting its lobbyists). The
donors include amusement machine distributors, as well as the owners of
truck stops, strip clubs, pool halls, convenience stores, bars, and ‘gift
stores’ that are basically video-poker game rooms. Our research
shows that many of these contributions came from donors who have been
cited, sometimes repeatedly, for engaging in various illegal gambling
practices or whose illegal operations caused law enforcement officials
to seize their poker machines. Other contributions came from donors who
say they were unaware that a relative or friend in the video-poker business
apparently made a political donation in their name. And others came from
donors who admit they were paid or reimbursed for making a political donation
to help an associate in the video-poker industry.
“Our research indicates that many of the problematic donations have
ties to Southland Amusements of Wilmington or its owner Robert
E. ‘Bobby’ Huckabee III. Huckabee chairs the Legislative
Committee of the N.C. Amusement Machine Association, which is waging a
vigorous fight to stop legislation that would ban video-poker machines
in the state. . . .”
“The pattern of giving indicates that the industry believes it should
focus its contributions on members of the N.C. House of Representatives
and particularly on Rep. James B. Black of Matthews, the House Speaker
in 2001-2002 and House Co-Speaker in 2003-2004. . . . We must emphasize
that we have NO evidence or indication that Speaker Black has any involvement
or knowledge of the apparent illegal campaign contributions described
in this document. In fact, descriptions of numerous donors on his campaign
disclosure reports suggest he did not realize they were connected to the
video-poker industry.”
“The focus of this call for an investigation is not on any recipient
but on the political donors who appear to have violated numerous campaign
finance laws in an effort to funnel tens of thousands of dollars into
the 2002 election. The pertinent violations include:
• exceeding the contribution limit,
• making donations in the name of another,
• making anonymous donations,
• using corporate money for political donations,
• reimbursing individuals who made donations,
• making donations in cash in excess of $100,
• making donations in exchange for material benefits,
• illegal solicitation of donations,
• providing false information,
• coercion of others to commit one or more of these offenses, and
• conspiracy to make illegal donations.”
“The focus of this call for an investigation is not on any recipient
but on the political donors who appear to have violated numerous campaign
finance laws in an effort to funnel tens of thousands of dollars into
the 2002 election. . . . The pattern of corrupt behavior appears to extend
beyond the acts of one individual or company in the video-poker business.
The evidence points to a level of corruption that permeates the industry,
from officials in key positions of its trade association to ‘mom-and-pop’
distributors to owners of the corner store that profits from the industry’s
illegal gambling operations.”
“The priority focus should be on the industry, not the recipients,
because the industry appears to be expanding from illegal schemes for
making money to illegal schemes for gaining an advantage inside the General
Assembly. Politicians trapped in a fundraising arms race with their political
rivals, with no alternative except to rely on private sources of money,
become the target of these schemes. We are concerned that an industry
described as ‘the crack cocaine of gambling’ aims to use its
illegal profits to gain political protection so it can expand and pose
an even greater threat to our democracy.”
Poker
Winnings
Winston-Salem Journal
Friday, July 2, 2004
Huge campaign contributions to Co-Speaker Jim Black paid off in a big
way for the video-poker industry Wednesday. A stacked committee under
Black's control steamrolled Senate efforts to ban video poker and forwarded
a bill, instead, that creates the illusion of gambling reform.
The House Finance Committee replaced Senate-passed legislation banning
video poker in the state with a counterfeit reform bill, and, in the process,
most likely cemented the presence of the video poker industry here for
at least two years. That's because the Senate will likely kill the House
bill, meaning the General Assembly does nothing to stop growth of this
highly addictive form of gambling.
That's exactly what Black, recipient of tens of thousands of dollars in
video-poker industry contributions over the past several years, wants.
Black has sat on efforts to run the Senate's previous video-poker bans
through the House. In May, he said he's worried about thousands of jobs
that would be lost if the vile industry is shut down.
Federal agents have been investigating video poker, and a campaign-finance
watchdog group has filed a complaint alleging numerous violations in the
industry's $121,000 in contributions to Black. The state's sheriffs say
that widespread illegal gambling centers on the machines.
Wednesday, Black stacked the Finance Committee with two new appointees
to assure victory. And he sent his rules chairman, Edenton Democrat Rep.
Bill Culpepper, to the finance committee to make sure that the chairman,
Wilmington Republican Rep. Danny McComas, didn't allow proponents of the
Senate bill a fair hearing. McComas and Culpepper did their jobs well
in fashioning rulings that excluded the ban from consideration.
At key points, liberal legislators, many of whom oppose a lottery because
it would prey on the poor, abandoned those concerns out of loyalty to
their co-speaker. Liberal Democrats such as Durham's Paul Luebke, Cary's
Jennifer Weiss, Chapel Hill's Joe Hackney and Winston-Salem's Larry Womble
voted for the reform bill.
But so did conservative Republicans, the self-anointed guardians of "family
values." With the lobbyist for the N.C. Family Policy Council begging
them to reject the phony reform bill, Republican Reps. Julia Howard of
Mocksville and Michael Decker of Walkertown voted with the gamblers. For
Decker, it was just one more act of treachery to go on a long list of
similar acts.
The video-poker industry knew it had to have some answer to the Senate
legislation. So it cooked up phony reform. Their first bill would have
provided huge amounts of cash to sheriffs to police the industry, with
probably a little left over to buy other stuff for the sheriffs. The sheriffs
didn't bite.
The industry hatched an alternative plan. The bill the committee approved
provides for license fees that flow to Alcohol Law Enforcement (ALE),
which would be responsible for administrative control of video-poker regulation.
There's no way that ALE, even with 20 new agents, can adequately police
the machines, and the industry knows that.
The state's sheriffs said the House bill would be worse than current law.
The county commissioners' association supported the sheriffs. But it didn't
matter. Black has his campaign contributions. The industry got what it
wanted: a stalemate in the legislature that guarantees it will continue
to operate in North Carolina, preying on the poor and corrupting family
values.
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