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Ethics Concerns Raised About N.C. Lottery

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RALEIGH, N.C. — It's been only six weeks since North Carolina lawmakers approved a state lottery, but a pair of ethical questions have already popped up, months before tickets go on sale and the first jackpot is rewarded.

Critics contend two people with political clout -- a newly appointed lottery commissioner and an adviser to state House Speaker Jim Black -- apparently failed to fully disclose their ties to Scientific Games Corp., one of the nation's leading gambling companies and one expected to compete for millions of dollars in state lottery contracts.

"In some ways, the reality of the lottery is starting to set in," said John Rustin, director of government relations with the North Carolina Family Policy Council, a group that fought unsuccessfully to keep North Carolina the only state on the East Coast without a lottery. "While there have been some ethical questions raised ... it's likely to be just the tip of the iceberg of what we may well see down the road."

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The first ethical dilemma concerned lottery commissioner Kevin Geddings, the only member of the state panel that will oversee the lottery who has any gambling experience.

Geddings initially denied he had ever worked with Alan Middleton, a vice president at Scientific Games. But records later revealed he hired Middleton several years ago, before Middleton worked at the company, for a public relations projects. Geddings later said he may have misunderstood questions about the relationship, and at the first meeting of the lottery commission, he agreed not to cast any final votes on vendors.

Then, on Friday, The News & Observer of Raleigh reported that a review of records from Black's office found that Meredith Norris, his unpaid political director, arranged at least one dinner between Black and Middleton at a Raleigh restaurant. She also helped Middleton recruit House and Senate members for a yacht outing along the Seattle waterfront during a legislative conference days before the final lottery vote.

She did both while employed as a consultant for Scientific Games, a job she has said she didn't disclose to state officials because she only monitored lottery legislation for the company and didn't attempt to lobby Black or other lawmakers.

But Secretary of State Elaine Marshall said Friday it's unclear whether Norris was merely a consultant, and her office is now investigating whether Norris should have registered as a lobbyist.

"There's enough question that has been raised," Marshall said.

Scientific Games fired Norris last month, after it was revealed she was working for the company. A company spokeswoman did not immediately return a call seeking comment Friday.

Reached Friday, Norris declined to make an immediate comment. She could temporarily lose her right to register as a lobbyist in the state if Marshall's investigation concludes she was working as unregistered lobbyist.

Julie Robinson, a spokeswoman for Black, defended both Norris and Geddings on Friday. Geddings didn't hide his business dealings and Norris only worked as a consultant, she said. Scientific Games had no more influence over the legislation creating the lottery than any other group supporting or opposing the game, she said, including the company's main rival, GTECH Corp.

In a statement issued by his office, Black said, "I have always had an 'open door' policy when it comes to legislators, lobbyists, organizations and constituents who are interested in an issue before the Legislature, and I seek out information on all sides of every issue."

Charles Sanders, the chairman of the lottery commission who pledged at its first meeting that transparent, ethical conduct would mark the commission's work, said the law creating the lottery in North Carolina gives every vendor a fair chance to win the state's business.

Still, he is concerned about appearances.

"I'd just as soon not have this type of story going around because I think it raised questions in people's minds about just whether the lottery is going to be entirely fair or not," Sanders said. "I think that's unfortunate because it's not true. The lottery is going to be run to the highest ethical standards."

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