Wednesday, July 24, 2024

Gambling donations boost local candidates as state GOP cites NHC as top election battleground

The North Carolina Republican Party is planning to spend over $2 million in advertisements to maintain its position in New Hanover County in the 2024 election amid a recent overhaul to the state’s campaign finance laws and an influx of donations from the casino and gaming industries. (Courtesy Port City Daily)

NEW HANOVER COUNTY — The North Carolina Republican Party is planning to spend over $2 million in advertisements to maintain its position in New Hanover County in the 2024 election amid a recent overhaul to the state’s campaign finance laws and an influx of donations from the casino and gaming industries. 

READ MORE: Amid push for more casinos, area legislators benefit from gaming industry donations

ALSO: This came from some political operatives:’ Critics raise questions about last-minute campaign finance overhaul

District 7 has been a top focus of the state’s Republican and Democratic parties in recent elections, but a Monday Axios report projects 2024 spending to surpass past races. The North Carolina GOP is prepared to spend $2.28 million of initial advertisements on Senator Michael Lee’s race to hold the district 7 seat against David Hill. The first ad went live Tuesday.

Port City Daily reached out to Lee’s campaign about the advertising strategy but did not receive an answer by press. 

Jill Hopman, the chair of the New Hanover County Democratic party, said she wasn’t surprised by the GOP’s planned spending for district 7. She said the local party is far more active and organized than it was in 2022 and has begun canvassing with plans to engage every precinct in the county.

“We have an excellent candidate this cycle in Dr. David Hill, a pediatrician and active community member,” she said. “And we live in a very purple, bellwether county. Michael Lee pretends to be a moderate, but his legislative actions prove otherwise.”

Lee and his 2022 opponent Marcia Morgan both raised over $1.5 million during the last election, the majority of which came from state party groups. Lee won with 51.22% of the vote to Morgan’s 48.78%. 

Ann Webb, policy director of nonprofit Common Cause, told PCD she believes it will be more difficult to track both parties’ political spending in the 2024 election due to recent campaign finance changes. Last month, lawmakers overrode Gov. Roy Cooper’s veto to pass House Bill 237, which contains major changes to the state’s campaign finance laws; area legislators Sen. Brent Jackson (R-Pender), Sen. Bill Rabon (R-Brunswick), Sen. Michael Lee (R-New Hanover), Rep. Charles Miller (R-Brunswick) and Rep. Ted Davis Jr. (R-New Hanover) voted in favor of the bill.

Critics such as Melinda Price Kromm, the executive director of nonprofit NC For the People, have argued the bill will allow campaign finance to function as a “money laundering scheme.” Donations from federal committees designated as “527” organizations — including the Democratic Governors Association, the Republican Governors Association, and GOPAC — are required to disclose their donors. 

But under the new law, 527 organizations will be able to distribute unlimited resources to other political committees in their official name without revealing the original source of their funds. According to Propublica, NC-based 527 organizations have received the seventh most contributions of any state in the country. Campaign finance watchdog Bob Hall argues H.B. 237 will increase donations from out-of-state sources who do not want to be affiliated with controversial candidates.

Although H.B. 237 does not allow 527 committees to use corporate-sourced funds on NC committees, critics argue the State Board of Elections will be unable to enforce the rule. The bill repeals a requirement for federal committees to maintain an in-state treasurer to produce records deemed necessary by the State Board of Elections.

“It will benefit wealthy mega donors and candidates and make it harder to keep track of what’s coming into our state,” Webb told PCD.

Bob Hall, the former executive director of nonprofit Democracy North Carolina, recently published a report tracking a major source of out-of-state donations to Republican campaign finance groups in relation to a recent legislative push to expand the state’s gambling industry.

Hall’s June 24 report found gambling industry donors contributed over $1 million directly to North Carolina candidates and over $2 million to two federal 527 committees — GOPAC and the Republican State Leadership Committee — from January 2022 to March 2024. GOPAC and the RSLC distribute funds to other organizations that funded political advertisements in past elections. 

Top donors included Maryland-based Cordish Company, Illinois-based J&J Ventures, Nevada and Rhode Island-based International Game Technology, Kentucky-based Churchill Downs, Georgia-based Primero Games, and Nevada-based Boyd Gaming Corp. Top NC-based donors include Southland Entertainment and Grover Gaming.

Among the ten candidate recipients are three local lawmakers:

  • Sen. Brent Jackson (R-Pender) — $86,000
  • Sen. Bill Rabon (R-Brunswick) — $68,700
  • Sen. Michael Lee (R-New Hanover) — $38,100

The three officials — as well as local lawmakers Rep. Charles Milles and Rep. Ted Davis Jr. voted in favor of H.B. 347 to allow sports betting last year. According to Hall’s analysis, Miller has received $13,350 from gambling interests while Davis has received $11,000. Lee’s most recent financial disclosures also include at least $10,000 invested in stock for Nevada-based Everi Holdings, which produces slot machines and gaming equipment for casinos. 

Almost $2 billion has been wagered in North Carolina since sports betting became legal in March. However, an effort to authorize building four new casinos in the state as part of the 2023 compromise budget failed to gain sufficient support last year. Berger — who has received $53,700 from industry donors — has vowed to continue the fight in upcoming legislative sessions.

GOPAC and the RSLC donated $6 million over the past two years to Virginia-based political committee the Good Government Coalition, which in turn distributed the funds to a group called Citizens for a Better North Carolina, a major funder of political advertisements in past elections. Hall has identified other prominent donors to the groups in other recent reports, including Duke Energy and Pennsylvania-based billionaire Jeffrey Yass.

Hall calculates more than 90% of Citizens for a Better North Carolina’s funds originate with GOPAC and the RSLC. The committee is controlled by Senate president Phil Berger and House Speaker Tim Moore and has spent $24 million to elect Republican candidates since 2020. 

In 2020, Citizens for a Better North Carolina spent $837,740 on ads opposing district 7 incumbent Harper Peterson. Lee lost the seat to Peterson in 2018, but regained it in 2020.

Citizens for a Better North Carolina also paid $48,898 to the Differentiators, a Republican political consultant firm, on mailers opposing Morgan. The Democratic reached a settlement with Lee regarding a defamatory ad released by her campaign ads against the senator last year. 

Citizens for a Better North Carolina is only one prominent group that has financed advertisements for state candidates. The Democrat’s largest group is North Carolina Families First, which receives over half of its funding from Make NC First.

Hall argues the casino push is directly connected to political spending. He filed a complaint with the North Carolina Board of Elections in May 2023 alleging that the video poker industry illegally donated $885,000 to candidates, including those from the Cape Fear region, and party committees from 2019 to 2022. 

Webb told PCD there was bipartisan recognition of the need for greater oversight after Hall’s 2004 campaign finance complaint against House Speaker Jim Black (D-Mecklenburg) led to the official stepping down and being sentenced to five years in prison for bribery. Hall’s complaint included special interests behind Black’s efforts to expand the video poker industry in the state, triggering an investigation that revealed the lawmaker’s $500,000 payment received from an industry lobbyist.

But the state board of elections’ ability to provide oversight and investigate campaign finance violations has diminished, Webb argued, due to stagnant budgeting, inadequate staffing, and campaign finance reforms.

“Over the past several years, we’ve seen a chipping away at the oversight of campaign finance in our state,” she said.

Beyond H.B. 237, S.B. 747 banned outside grants to help finance the agency and S.B. 105 limited its ability to investigate elections. Hall’s 2023 gaming industry complaint and 2021 campaign finance complaint against gubernatorial candidate Mark Robinsion remain pending; H.B. 1029 requires the board to maintain confidentiality on the status of complaints.


Tips or comments? Email journalist Peter Castagno at peter@localdailymedia.com.

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