Opinion: Daily Journal

The Scandal & the Non-Scandal

RALEIGH – The Raleigh News & Observer has uncovered what appears to be significant wrongdoing in state government. But unless I am missing something, the wrong done cannot be found in the text of the resulting legislation, the bill authorizing the creation of a state-run lottery in North Carolina. This is, in short, not a “lottery scandal,” though that is how the story came to sound as it made its way to the general public via wire copy and broadcast summaries. The scandal – and such terminology does not appear premature – lies squarely in the inner workings of House Speaker Jim Black’s political machine.

Scientific Games of New York is a major player in the national gambling industry. Its chief rival for state lottery business is Rhode Island-based GTECH. Both companies have sought passage of a North Carolina lottery for years, for the obvious reason that there’s big money to be made setting up and managing a government gambling monopoly in the largest state without one.

GTECH has traditionally employed contract lobbyists in the state to advance its interests. This year, Scientific Games hired longtime Black aide Meredith Norris to “monitor” the lottery debate in the legislature. What Andrew Curliss and Dan Kane, intreprid reporters for the N&O, discovered after securing hundreds of pages of documents and correspondence from Black’s office is that Norris’ activities were essentially indistinguishable from those of a lobbyist helping to secure passage of favorable legislation. Yet she was not registered as a lobbyist for Scientific Games.

This is hardly a paperwork error or legal technicality. We have lobbyist-registration rules for a reason – to identify potential conflicts of interest or relationships that an informed public may view as undue influence by special interests. Norris received compensation from a private firm with an interest in the outcome of a particular, controversial bill while at the same time acting as a sort of shadow staffer for the speaker of the House. As Kane reported, she helped set up meetings between key lawmakers and the vice president of Scientific Games. She emailed House members to thank them for voting for the lottery. Was she doing these things as a paid company rep or as Black’s close confidante? This is an important question, and one that is impossible to frame unless the relevant information is publicly disclosed.

There are only three reasons I can imagine why Norris would not have registered as a lobbyist for Scientific Games. One, she forgot. Uh, no. Two, she (and Scientific Games) honestly believed that she was not lobbying for the company, which if true demonstrates scandalously poor judgment. Or three, she didn’t want to register because of a concern that public disclosure would reveal a set of problematic conflicts of interest.

Let’s hold that last note for a moment. Norris’ role as the unpaid but powerful political director for Speaker Black should never have been mixed with her role as a lobbyist. Kane shows that the lottery case was hardly an isolated incident. Norris took money from JR Tobacco to combat a cigarette-tax hike while also seeming to speak for Black on the same issue. She took money from the N.C. Economic Development Group* while also directing Black’s staff to stick the board’s legislative agenda into a bill and drafting an op-ed from Black on a related matter. And Norris received pay from Electricities while simultaneously telling Black’s staff that the speaker wanted language favorable to Electricities inserted in the technical-corrections bill.

Interestingly, none of these causes actually succeeded. Cigarette taxes went up significantly this year. The economic-development and Electricities provisions never became law. And to return to the lottery case, the language suggested by her client Scientific Games did make it into the 2005 lottery bill – but that language was, as far as I can tell, unobjectionable. It did not give Scientific Games an unfair or even a noticeable advantage in upcoming bids (though that may have been the intention). If a properly registered lobbyist, who didn’t also serve as political director for the speaker, had proposed similar language to ensure a full and fair accounting of the strengths and weaknesses of lottery bidders, I don’t think its inclusion would have have raised many eyebrows. What was shocking here was Norris’ dual role and Black’s apparently blasé or perfidious attitude about it.

That’s what I tried to say during an interview Friday with The Charlotte Observer. Unfortunately, here’s what ended up in the paper Saturday: “I was thinking, ‘Well, what’s wrong here, exactly?’” [John] Hood said. “Some people might get outraged about it, but I’m not sure why.”

Just to be clear**, I was referring to the text of the resulting legislation, not the damning story of wrongdoing and influence-peddling uncovered by the N&O. I can well understand why people are outraged about the latter – because I’m one of them.

Hood is president of the John Locke Foundation.

*Correction: in the original version of this column, I described Norris’ client as the NC Economic Development Board. In actuality, it was the NC Economic Development Group. The two similarly sounding organizations are distinct, the latter serving as a consortium of the regional economic development partnerships, which are state-funded nonprofits. I regret the mix-up.

** By the way, I’m not suggesting that the Observer sought to misrepresent my views. In a story with lots to cover and not a lot of room to cover it in, there was probably not enough space to present comprehensively my “on the one hand, on the other hand” statement about what was and was not scandalous about all this. Given how many Charlotte-area readers contacted me over the weekend to ask whether I had gone loco, or perhaps onto the speaker’s expansive payroll myself, I should have found a pithier way to make my point.