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N.C. Lottery conviction sends message about disclosure

North Carolina LotteryNorth Carolina Lottery: N.C. Lottery conviction sends message about disclosure

More indictments may be forthcoming 

Voluntary public servants beware: Withholding information about your past could get you in serious trouble.

Changes in North Carolina ethics laws will make it harder for appointed members of boards and commissions to hide potential conflicts of interests, and the new law stiffens penalties when disclosures are incomplete.

But the five felony fraud convictions given by a federal jury Thursday to a former state lottery commissioner who lied about his past could provide ample motivation for future appointees to be more cautious when disclosing prior relationships.

Lawmakers, government watchdogs and federal prosecutors say it's important that the public has trust in government.

"We view these as crimes against democracy," said Bob Hall, executive director of Democracy North Carolina, a private organization that monitors ethics in government. "If people become convinced that government is rigged, then the whole thing will fall apart."

Kevin Geddings, who once owned a Charlotte public relations firm, told authorities in 2005 that he had no conflict of interest with any lottery company. After he was appointed to the lottery commission by House Speaker Jim Black, a Mecklenburg County Democrat, Geddings said his relationship with Alan Middleton - a vice president at lottery company Scientific Games - was not business related.

Geddings filled out an ethics form not mentioning five years of public relations consulting for Scientific Games and $253,000 of income from lottery companies.

Twelve jurors determined that he committed mail fraud when he sent the form to the state Ethics Commission in Raleigh. He faces 20 years in prison for each of five mail fraud charges, although he likely will serve a much shorter sentence.

"Under the sentencing guidelines, he's going to be looking at five years," said Kieran Shanahan, a former federal prosecutor now in private practice in Raleigh.

He said Geddings could have been eligible for a shorter sentence had he pleaded guilty.

"If you cooperate with the government, you can look at reducing your sentence by, as a rule of thumb, 50 percent. But now, when he looks at the minimum sentencing range, he's not going to have acceptance of responsibility. He's not going to have the option of a motion for reduction of sentence."

U.S. Attorney George Holding declined to discuss whether others might be charged, but said the investigation is continuing. Shanahan predicts more charges.

Prosecution's plans

He noted that Geddings' prosecutors were allowed to use hearsay testimony from Middleton and Meredith Norris, a former Black aide who lobbied for Scientific Games.

Middleton, Norris and Black were said to have met frequently during the months leading up to the lottery's passage in August 2005. Geddings, Middleton and Norris were linked to one another through scores of e-mails talking about the lottery. Neither Middleton nor Norris were called to testify.

"That could be a logical explanation as to why they did it that way," he said of the hearsay testimony. "It's clear that the government is not done. They've got to be feeling pretty good that their methodology is working."

Kevin Geddings, a former member of North Carolina’s lottery commission, stands outside federal court in Raleigh during his fraud trial.Black testified that he did not know about Geddings' ties to the lottery. State and federal investigations related to Black's legislative and campaign activities are continuing, but Black has said he is not the subject.

Meanwhile, the conviction sends a message about hiding past relationships.

"The law has been changed, so it would be more difficult," said state Senate Republican Leader Phil Berger of Rockingham County. "But even if it hadn't changed, I think the result of the trial would put anyone on notice to disclose anything that might be even the appearance of a conflict."

One of the changes - and a defense Geddings attempted to use - is in a requirement asking appointees to disclose anything a "reasonable person" would consider a potential conflict of interest.

The ambiguous requirement was reworded to instruct the appointee to simply disclose any potential conflict of interest.

Another change in the law makes it a crime to provide false or misleading information on the form. Such a breach had been akin to a policy violation.

Berger said there remains a "huge loophole" in public officials' legal defense funds.

"There are no requirements for anything to be disclosed, who gave (or) the amount they gave," Berger said. He said he was speaking in general terms, but a defense fund established for Black "is the one that people are talking about."

The new laws apply to state board and commission members who are within the executive branch. Hall said he would like similar guidelines for members of the legislative branch.

"People involved in public service need to tell the truth and serve the public," he said.

Fayetteville Observer

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9 comments. Last comment 10 years ago by jim695.
Page 1 of 1
cps10's avatar - Lottery-004.jpg
The Carolinas - Charlotte
United States
Member #21627
September 12, 2005
4138 Posts
Offline
Posted: October 18, 2006, 5:25 pm - IP Logged

Whoopdie-damn-do! Here they are tightening laws when it was their idiocy that cause all of this mess...hence my tagline at the bottom.

The North Carolina Education Lottery - so much a joke that here are their mascots:

Stooges

    Avatar

    United States
    Member #26469
    November 18, 2005
    160 Posts
    Offline
    Posted: October 18, 2006, 8:56 pm - IP Logged

    Whoopdie-damn-do! Here they are tightening laws when it was their idiocy that cause all of this mess...hence my tagline at the bottom.

    It seems to me that Geddings caused his own mess.He could have listed his business dealings,but he didn't.It was his choice.When he was found to have recieved money that was not listed on his disclosure,he tied his own noose.

      cps10's avatar - Lottery-004.jpg
      The Carolinas - Charlotte
      United States
      Member #21627
      September 12, 2005
      4138 Posts
      Offline
      Posted: October 18, 2006, 9:07 pm - IP Logged

      It seems to me that Geddings caused his own mess.He could have listed his business dealings,but he didn't.It was his choice.When he was found to have recieved money that was not listed on his disclosure,he tied his own noose.

      I agree with you...however, if the state had administered a complete background check, this could have all been avoided instead of them making some bogus law regarding disclosure.

      The North Carolina Education Lottery - so much a joke that here are their mascots:

      Stooges

        Avatar

        United States
        Member #26469
        November 18, 2005
        160 Posts
        Offline
        Posted: October 18, 2006, 9:12 pm - IP Logged

        With the law in place,the state doesn't have to rummage around checking out the backgrounds of every potential canidate for the lottery commission.Only those who are selected,will have to be checked out,saving NC some time and money.

          Avatar
          Columbia City, Indiana
          United States
          Member #2978
          December 9, 2003
          381 Posts
          Offline
          Posted: October 19, 2006, 11:17 am - IP Logged

          From the article: 

          "Lawmakers, government watchdogs and federal prosecutors say it's important that the public has trust in government.

          "We view these as crimes against democracy," said Bob Hall, executive director of Democracy North Carolina, a private organization that monitors ethics in government. "If people become convinced that government is rigged, then the whole thing will fall apart."

          __________________________

          How nice.

          I just don't get this blind loyalty to political parties. The Democrats swear that Bill Clinton was the best president we've ever had. Provided his entire tenure is ignored in that analysis, they might be right. The Republicans, on the other hand, routinely ignore the crimes perpetrated by their own members, and take great pains to see that none are prosecuted.

          I've always been a Republican, since I was old enough to vote. However, there comes a time when a person must examine and reevaluate the company he keeps. LosingJeff and I have spent four years trying to get the feds to investigate the Hoosier Lottery. They tell us that they won't involve themselves in the investigation of any state agency, because they depend too much on state cooperation in federal cases, and they "don't want to ruffle anyone's feathers." Their contrary actions to this policy indicate one of two possible scenarios: Either Texas and North Carolina are no longer American states, or Indiana has declared her sovereignty, and our lawmakers forgot to mention it to us.

          Three different law firms have told us that the evidence we've collected "is probably sufficient to convict on at least three federal RICO predicates" (Wire Fraud, Conspiracy to Commit Wire Fraud and Misappropriation/ Conversion of Public Funds). We've done all the work; all they'd have to do is come down here and arrest a bunch of people who have made themselves immune to the state laws they write to govern all of us common folk. Hundreds of millions of dollars have simply vanished from Hoosier Lottery coffers, $175M in federal unemployment benefits just disappeared without a trace, $700M in educational funds came up missing, a $10M grant was made to a charity which doesn't exist (The Gary Youth Foundation, I think), other grants which were announced with fanfare in grand press releases, but were never actually paid; well, the list goes on and on and on...

          If this happened to any other corporation in America, it would lead the news on every station for an entire month. It's not that the feds aren't interested in our evidence that bothers me so much; it's the fact that they just don't want to know about it.

          Crimes against Democracy? These people have no clue...

          Come, Pinky; we must prepare for tomorrow night...

          Jim

            Avatar
            Columbia City, Indiana
            United States
            Member #2978
            December 9, 2003
            381 Posts
            Offline
            Posted: October 19, 2006, 11:17 am - IP Logged

            From the article: 

            "Lawmakers, government watchdogs and federal prosecutors say it's important that the public has trust in government.

            "We view these as crimes against democracy," said Bob Hall, executive director of Democracy North Carolina, a private organization that monitors ethics in government. "If people become convinced that government is rigged, then the whole thing will fall apart."

            __________________________

            How nice.

            I just don't get this blind loyalty to political parties. The Democrats swear that Bill Clinton was the best president we've ever had. Provided his entire tenure is ignored in that analysis, they might be right. The Republicans, on the other hand, routinely ignore the crimes perpetrated by their own members, and take great pains to see that none are prosecuted.

            I've always been a Republican, since I was old enough to vote. However, there comes a time when a person must examine and reevaluate the company he keeps. LosingJeff and I have spent four years trying to get the feds to investigate the Hoosier Lottery. They tell us that they won't involve themselves in the investigation of any state agency, because they depend too much on state cooperation in federal cases, and they "don't want to ruffle anyone's feathers." Their contrary actions to this policy indicate one of two possible scenarios: Either Texas and North Carolina are no longer American states, or Indiana has declared her sovereignty, and our lawmakers forgot to mention it to us.

            Three different law firms have told us that the evidence we've collected "is probably sufficient to convict on at least three federal RICO predicates" (Wire Fraud, Conspiracy to Commit Wire Fraud and Misappropriation/ Conversion of Public Funds). We've done all the work; all they'd have to do is come down here and arrest a bunch of people who have made themselves immune to the state laws they write to govern all of us common folk. Hundreds of millions of dollars have simply vanished from Hoosier Lottery coffers, $175M in federal unemployment benefits just disappeared without a trace, $700M in educational funds came up missing, a $10M grant was made to a charity which doesn't exist (The Gary Youth Foundation, I think), other grants which were announced with fanfare in grand press releases, but were never actually paid; well, the list goes on and on and on...

            If this happened to any other corporation in America, it would lead the news on every station for an entire month. It's not that the feds aren't interested in our evidence that bothers me so much; it's the fact that they just don't want to know about it.

            Crimes against Democracy? These people have no clue...

            Come, Pinky; we must prepare for tomorrow night...

            Jim

              cps10's avatar - Lottery-004.jpg
              The Carolinas - Charlotte
              United States
              Member #21627
              September 12, 2005
              4138 Posts
              Offline
              Posted: October 19, 2006, 1:34 pm - IP Logged

              From the article: 

              "Lawmakers, government watchdogs and federal prosecutors say it's important that the public has trust in government.

              "We view these as crimes against democracy," said Bob Hall, executive director of Democracy North Carolina, a private organization that monitors ethics in government. "If people become convinced that government is rigged, then the whole thing will fall apart."

              __________________________

              How nice.

              I just don't get this blind loyalty to political parties. The Democrats swear that Bill Clinton was the best president we've ever had. Provided his entire tenure is ignored in that analysis, they might be right. The Republicans, on the other hand, routinely ignore the crimes perpetrated by their own members, and take great pains to see that none are prosecuted.

              I've always been a Republican, since I was old enough to vote. However, there comes a time when a person must examine and reevaluate the company he keeps. LosingJeff and I have spent four years trying to get the feds to investigate the Hoosier Lottery. They tell us that they won't involve themselves in the investigation of any state agency, because they depend too much on state cooperation in federal cases, and they "don't want to ruffle anyone's feathers." Their contrary actions to this policy indicate one of two possible scenarios: Either Texas and North Carolina are no longer American states, or Indiana has declared her sovereignty, and our lawmakers forgot to mention it to us.

              Three different law firms have told us that the evidence we've collected "is probably sufficient to convict on at least three federal RICO predicates" (Wire Fraud, Conspiracy to Commit Wire Fraud and Misappropriation/ Conversion of Public Funds). We've done all the work; all they'd have to do is come down here and arrest a bunch of people who have made themselves immune to the state laws they write to govern all of us common folk. Hundreds of millions of dollars have simply vanished from Hoosier Lottery coffers, $175M in federal unemployment benefits just disappeared without a trace, $700M in educational funds came up missing, a $10M grant was made to a charity which doesn't exist (The Gary Youth Foundation, I think), other grants which were announced with fanfare in grand press releases, but were never actually paid; well, the list goes on and on and on...

              If this happened to any other corporation in America, it would lead the news on every station for an entire month. It's not that the feds aren't interested in our evidence that bothers me so much; it's the fact that they just don't want to know about it.

              Crimes against Democracy? These people have no clue...

              BRAVO Jim!!

              That is one of the best posts I think I've read here...as a lifelong Republican, I share a lot of the views you do it seems! Thank you for the eloquent post and best of luck to you!!

              The North Carolina Education Lottery - so much a joke that here are their mascots:

              Stooges

                Avatar

                United States
                Member #26469
                November 18, 2005
                160 Posts
                Offline
                Posted: October 20, 2006, 10:44 am - IP Logged

                Does Indiana not have an Attorneys General?Why hasn't he/she looked into this matter?It seems like there are many unanswered question in Indiana.In NC,at least one big question has been answered.

                  Avatar
                  Columbia City, Indiana
                  United States
                  Member #2978
                  December 9, 2003
                  381 Posts
                  Offline
                  Posted: October 21, 2006, 1:33 pm - IP Logged

                  NCPicks:

                  Yes, Indiana has an attorney general, and he has been apprised of the situation. His response, however, serves to illustrate the mentality we're up against. He wrote back and told us that, if any wrongdoing is proven, his office will be defending the crooked lottery officials.

                  We've contacted congressmen, senators and our governor, met with state representatives, lottery officials, prosecuting attorneys, the Marion County Grand Jury, the state police and many, many others. No one wants to get involved. Almost every appointment we've had with TV and print reporters were mysteriously canceled at the last moment with no explanation. When we'd call back to reschedule, these reporters wouldn't come to the phone, and our emails simply go unanswered.

                  Of the countless reporters we've contacted, only Kevin Leininger of the Fort Wayne News-Sentinel has had the guts to go forward with this story. Kevin has written two articles on the subject, but the Indianapolis papers failed to pick them up.

                  We've contacted the FBI, who threw us out of the federal building in Indianapolis, without even hearing our complaint, and warned us not to come back. Since the Hoosier Lottery is a corporation and not a state agency, we contacted the SEC as well. They weren't interested. We called a federal fraud attorney in New York. He was genuinely interested for the first couple of weeks, saying he would take our case on a contingency basis because "he didn't like what was going on down there." Then, for no reason, he stopped taking our phone calls, and he refuses to answer our emails. We've written several times asking for our case file back, but no answer is forthcoming. We filed a complaint with the New York Disciplinary Board and the New York State Bar, but we haven't heard anything from them, either.

                  We've even contacted Oprah Winfrey and Geraldo Rivera (yes, we are desperate) to try to get this exposed.

                  We need a federal investigation, because the Marion County prosecutor, Carl Brizzi, isn't going to allow an all-out investigation with full disclosure; too many of his superiors will go to jail, and he'll have to explain why these people weren't brought to justice three years ago. We offered Brizzi a copy of our entire file, but he refused it, saying he didn't even want to know about it. Consequently, every time something does come out about the Hoosier Lottery, fingers are pointed at underlings who are forced to pay for someone else's crimes. All of our congressmen, senators, representatives, prosecuting attorneys, judges and elected or appointed agency heads are immune to prosecution for any violation of state laws, whether they be criminal or civil; they simply can't be held accountable for their actions. Their careers, however, would be ruined should this corruption be exposed. They're NOT immune at the federal level, though, so an FBI investigation is necessary in order to obtain any type of justice for these crooks.

                  This agency has very little, if any, regulation and oversight. There are no laws mandating where the money is supposed to go or how it should be allocated. Hundreds of millions of dollars per year simply vanish from their coffers. I would think that in itself would be enough to capture the interest of the FBI, but no one except LosingJeff and I seem to want to know where the money is going.

                  Sooner or later, some important people are going to have a lot of explaining to do. I just hope it comes to pass during my lifetime.

                  Come, Pinky; we must prepare for tomorrow night...

                  Jim