Local News

Secretary Of State's Office Calls For Criminal Probe Into Lottery Controversy

Posted November 3, 2005

— One of the nation's leading suppliers of instant-win lottery tickets and three people on its payroll apparently violated state lobbying laws during this year's statehouse debate over whether to create a lottery in North Carolina, officials said Wednesday.

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The Secretary of State's office has asked state prosecutors to begin a criminal investigation of Scientific Games Corp., company vice president Alan Middleton and consultants Meredith Norris and Kevin Geddings. They could be charged with a misdemeanor, and the three barred from lobbying in North Carolina for two years if convicted.

The Secretary of State's office declined to discuss the exact nature of the suspected violations, referring questions to the State Attorney General's office. Attorney General Roy Cooper has asked the State Bureau of Investigation to help with the probe, a Cooper spokeswoman said.

The request comes a day after Geddings resigned from the state lottery commission and Scientific Games revealed it paid him $24,500 this year for services. Late Wednesday, House Speaker Jim Black, D-Mecklenburg, appointed former University of North Carolina at Charlotte Chancellor James Woodward as Geddings' replacement.

Norris is Black's former political director. Scientific Games paid, or promised to pay, her $40,000 this year, according to the company's filings with the Secretary of State's office.

Scientific Games will cooperate with any investigation, said company spokeswoman Rhonda Barnat, who declined additional comment. Neither Geddings nor Norris' attorney returned calls Wednesday seeking comment.

The news could further taint Black, a four-term speaker in the state House. Federal grand jury subpoenas issued last month requested information from his office about the lottery and video poker industries, although Black's attorney has said the speaker is not a target of a federal investigation. The subpoenas also requested records specifically about Geddings, Middleton and Norris.

Geddings, who runs a Charlotte public relations firm and owns radio stations, is a longtime friend of Middleton. The pair once worked together before Middleton joined Scientific Games, and those ties were scrutinized when Geddings joined the commission. He insisted at the time he had no existing financial relationship with any lottery vendor.

Lottery Commission Chairman Charlie Sanders said Scientific Games' disclosure it paid both Norris and Geddings could hurt the company's chances to land a lucrative contract to run part or all of the state lottery. The commission wants to sell its first tickets by next spring.

"I don't think Scientific Games has helped itself," said Sanders, adding that he felt deceived by Geddings. "He has let down the commission and he has let down the people of North Carolina."

Commissioner Robert Farris Jr. of Wilson, who heads the panel's vendor selection committee, said the New York-based company will remain under consideration. "I'm not prepared to exclude anybody," Farris said.

Wake County District Attorney Colon Willoughby would prosecute any charges related to lobbying violations. A person with no prior convictions could face up to 45 days of community service if convicted, along with the two-year ban on lobbying.

Neither Geddings nor Norris were registered as a lobbyist for Scientific Games with North Carolina officials. Geddings was paid on three occasions, according to the company's filing, including $9,500 on Sept. 23, the day after Black appointed him to the commission.

Geddings also received money from Scientific Games to help prepare Senate Majority Tony Rand, D-Cumberland, for a local forum on lottery legislation, the filing said.

Scientific Games also listed 18 occasions in which Norris spent money on legislators on the company's behalf for restaurants or other food, totaling $4,592.37.

The company said it filed the reports disclosing the payments to Norris and Geddings not because it believed these activities were lobbying under North Carolina law, but "as a demonstration of our commitment to compliance and transparency."

The Secretary of State's office also investigated Norris' relationship with electric and natural gas utility SCANA Corp.; she worked as a company consultant but didn't register as a lobbyist.

While investigators concluded the relationship "can easily be construed to encompass legislative lobbying activities," it also found it difficult to accumulate information on the matter and forwarded its inquiry to the state Attorney General's office as incomplete.

Woodward, the new commission member, served as chancellor at North Carolina-Charlotte from 1989 to July of this year and remains on the school's engineering faculty.

"I am confident his extensive background as an educator and high moral character will ensure that future lottery proceeds truly do benefit the children of our state," Black said in a statement.

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