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Questions rise about N.C. lottery access

Oct 17, 2005, 7:09 am

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North Carolina Lottery

Meredith Norris, a top political aide to House Speaker Jim Black, hired two Charlotte lawyers Friday as Secretary of State Elaine Marshall investigated whether Norris lobbied on behalf of a major lottery company without being registered to do so.

"Ms. Norris is very confident that she has not violated any lobbying laws," Thomas Walker, one of her lawyers, said Friday.

The probe advanced as Republican leaders called for an investigation by Attorney General Roy Cooper or an independent inquiry into how the lottery company, Scientific Games, was able to insert language into the state's new lobbying law through Black's office. Cooper's office said it awaits Marshall's report.

"It appears that this company was given the inside track over anyone else who might want to participate in directing the lottery here," said Rep. Joe Kiser, of Lincoln County, and the House Republican leader.

Black, a Matthews Democrat, said he and General Assembly staff received information from all sides of the lottery issue, including Scientific Games' chief competitor.

The allegations and probe come just as the lottery was stirring to life, with lottery commissioners holding their first meeting last week, and raise doubts about a game for which integrity is essential to success. North Carolina is one of the last states to create a gambling enterprise and not the first to endure controversy. State numbers games across the country scoop up millions, but have suffered scandals and squabbles over how the money is used.

Marshall is looking for evidence that Norris tried to influence legislation without formally disclosing she was a lobbyist, which would trigger certain restrictions on her interactions with legislators.

The players in the lottery drama include:

  • Norris, 31, Black's unpaid political director.
  • Marshall, who will turn over the results of her inquiry to the attorney general.
  • Alan Middleton, vice president at Scientific Games, one of the two major lottery companies in the United States.
  • Charles Sanders, chairman of the state Lottery Commission.

Norris, who formerly worked on Black's staff, sets up fundraisers and meetings for him, among other duties that keep her looped into his inner circle. That position is a notable plus for her job as a lobbyist who sometimes needs the speaker's ear for a client.

She also worked as an outside consultant to Scientific Games, though the company fired her after a newspaper report of her work for them. Norris was not registered as a lobbyist for the company.

E-mails released by Black's office show that she arranged at least one dinner between Black and Middleton. She also invited lawmakers, on Middleton's behalf, to a yacht cruise in Seattle during a meeting of the National Conference of State Legislatures in August, two weeks before the lottery won final approval. No one showed up, Middleton said.

Middleton, through Black's office, successfully proposed several additions to the proposed lottery law, requirements for the type of company to be hired to run the state lottery.

The new language included requiring the state Lottery Commission to investigate the ethical reputation and criminal background of lottery vendors and award the contract to the firm that "maximizes the benefit to the state," not just the one that offers the lowest bid.

When pursuing contracts in other states, Scientific Games has highlighted legal troubles of its chief competitor, Rhode Island-based GTech, where a former employee was convicted in a kickback scheme. In some cases, GTech has underbid Scientific Games.

Competition aside, John Hood, president of the conservative John Locke Foundation and an occasional critic of Black, said filtering out lawbreakers and getting the most for your money seem hard to disagree with.

"I was thinking, 'Well, what's wrong here, exactly?' " Hood said. "Some people might get outraged about it, but I'm not sure why."

Black issued a statement Friday saying he has an open-door policy to get information from all sides, and that General Assembly bill drafters also met with representatives from GTech, Scientific Games' chief competitor.

"My staff and I, as well as other legislators, General Assembly staff and bill drafters, were available to all interested companies, organizations and constituents who wanted to offer their suggestions on the lottery," Black said in the statement.

Middleton, the Scientific Games vice president who wrote the changes, said the law creates the toughest standards in the nation for a lottery vendor and N.C. lawmakers should be proud.

"I'm not ashamed at all to suggest to the legislature that they should have tighter language for our industry, language that shouldn't judge only by the cheapest bid, but by a bid that will produce the most money for education," Middleton said. "It's not to get at any competitors. It's to strengthen corporate conduct."

Middleton already drew attention because he is a longtime friend of -- and previously did work for -- Charlotte's Kevin Geddings, a member of the N.C. Lottery Commission, which will select the lottery company.

Sanders, the former Glaxo CEO who chairs the Lottery Commission, said the questions about Middleton's involvement in the legislation are "unfortunate," but the changes in the law don't affect how the commission will select a lottery vendor. Steps such as a criminal history check would be taken anyway, he said.

"The question is whether the law is written in a way that constrains our ability to do what we ordinarily would do," Sanders said Friday, "in selecting the best vendor, the most responsible vendor, the most ethical vendor. I don't think it favors one over another."

Gov. Mike Easley has confidence the commission will select the right vendor, said Dan Gerlach, Easley's top economic adviser.

"This is why the governor wanted an independent lottery commission," Gerlach said, "and (appointed) high quality people with substantial business experience to do what we want the lottery to do -- generate money for education."

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