Dec. 3, 2001
Gamblers Put Money on Politics to Win
By J. Barlow Herget
RALEIGH - Last year, former Gov. Edwin Edwards of Louisiana was convicted for corruption. The handsome, rogue politician’s luck finally ran out, ironically over payoffs from gambling interests.
One writer at his entertaining trial, Carol Flake Chapman, wrote in The New Republic, about the testimony of one of the witnesses: "The scenarios sounded like a cross between Goodfellas and the Marx Brothers." She told of characters who kept $1 million in cash in a freezer at home under the frozen ducks and turkeys. Payoffs were tossed out Cadillac windows, sometimes into dumpsters so that Edwards’ bagman would have to rummage through the trash to find the money.
At the end, Chapman advised, "The trial transcript should be required reading for any state considering the legalization of gambling."
You don’t have to follow Louisiana politics, however, to know that state-sponsored gambling invites a new crowd of special interests willing to bet thousands of dollars in state political campaigns. The money from gambling, whether it comes from video poker, casinos or lotteries, reaches into the millions of dollars.
Politicians see lotteries as an easy way to raise much needed revenue (often for very good purposes) and avoid hiking taxes. The businesses that make, sell and operate gambling equipment or that manage lotteries, like other private companies, are eager to expand their respective markets. To them, it’s just business.
Campaign money from the gambling industry already is flowing into North Carolina. Like bees to honey, the industry has swarmed here, drawn by Gov. Mike Easley’s proposal to start a lottery. But it may surprise citizens to learn that legalized gambling has been here for some time. There is a casino in Cherokee on federal, Indian Reservation land in the west, and there are about 9,000 video poker machines sprinkled around the state. Legislation to ban the machines altogether has failed to get out of committee in Raleigh.
A report in September by Democracy South, a campaign-finance watchdog group in Carrboro, revealed how much money gambling interests have put on the table of North Carolina politics, especially since the lottery became a major campaign issue in the 2000 Election. In 1996, for instance, the industry and its lobbyists donated about $74,000 to parties and candidates in the state. They raised the ante four years later and contributed $418,000.
Democracy South also found that the Cherokee tribe has given another $195,000 to national parties in so-called "soft money" since 1999. Organizations and individuals can give unlimited amounts of money to national parties under the guise of financing "party building and get out the vote" efforts. Often, such money is returned to the state for campaign expenses and advertisements that augment candidates’ own spending. All legal.
The gambling industry is placing its bets carefully. For example, House Speaker Jim Black, D-Mecklenburg, received in the 1998 Election $750 in campaign contributions from gambling interests. As Speaker, he can stop legislation from getting to a vote in the House. So, any bill to permit a lottery referendum by the voters must have his approval. The Senate has approved a lottery referendum bill.
Black himself is opposed to a lottery, but he has equivocated about moving a lottery referendum bill through the House. The gambling industry knows that Black holds the cards on the referendum issue, and in the 2000 Election, the industry’s supporters contributed $55,000 to Black’s re-election.
Not so surprising was the fact that the lottery’s prime champions, Governor Easley, received the largest amount of campaign money, $124,000, according to Democracy South. Like other special interests, the gambling business favors power more than political party affiliation. It’s bipartisan in its contributions.
House Minority Leader Leo Daughtry, R-Johnston, for instance, received $43,150 from gambling lobbyists. Like Black, he is personally opposed to a lottery, but he has muted Republican opposition to a lottery referendum. And should Republicans regain a majority in the House and Daughtry the Speakership, then it would be he who would be gatekeeper on any lottery legislation.
The record here is not unique. As lotteries have become more popular, gambling interests have become more active in financing political campaigns. South Carolina and Alabama, both of which have held lottery referendums, have seen increases in contributions from the gambling industry.
Regardless of the political prospects this year for legislation to put a lottery referendum on the ballot, the gambling industry has become a player at the poker table of North Carolina politics. And given current campaign finance law and trends, they will continue to raise the ante in political contributions.
Barlow Herget is a businessman and former member of the Raleigh City Council.
743 W. Johnson St.
Suite E
Raleigh, NC 27603
919.839.1200