Tribe a big player in state campaign contributions
A longtime democracy nonprofit director and self-proclaimed “watchdog” of political activity is calling for an investigation into how the Eastern Band of Cherokee Indians reports its donations.
Bob Hall, who served as executive director of Democracy N.C. for 25 years before retiring in 2017, said that he began looking into the issue following introduction of legislation to legalize sports betting.
“I knew the legislature was considering that, so I did some research on political donations and wanted to see how much influence they (the EBCI) may have on the legislature through their money,” said Hall.
Request for an audit
Hall soon found that question was hard to answer, or at least to answer quickly. In 2017, a new state law went into effect that required any political committee raising or spending more than $10,000 to file its campaign disclosure reports electronically. This makes sifting through even the lengthiest reports relatively easy — the start and end date of each report is clearly labeled, the entries are searchable, and the information is displayed in a uniform and easy-to-scan manner.
However, the EBCI is not a political committee. It is a sovereign nation, and it is not subject to the electronic reporting requirement. The tribe mails in paper reports that are then scanned into the Board of Elections website as PDFs. The PDFs are cumbersome, with just two entries per page, and not searchable.
In the letter he sent to N.C. Elections Director Kim Strach requesting the investigation, Hall included a list of all campaign contributions the tribe had made between 2013 and 2018, with two columns beside each to indicate whether the contribution was reported by the candidate, the tribe, or both. Hall said it took “many hours” to compile that report. In verifying Hall’s findings on the EBCI’s reported contributions for the 2018 season, The Smoky Mountain News spent two hours going through the data — continuing that process for an additional four years’ worth of data, and then doubling back to check whether each contribution appeared on the legislator’s reports as well, would have required a considerable time investment.
Hall found that the tribe had donated a total of $1.3 million spread across more than 400 donations in the six years he analyzed. If the EBCI were a political action committee, he said, it would be one of the state’s three largest, alongside the Duke Energy PAC and the N.C. Realtors PAC. He also found more than two dozen reporting discrepancies — that is, instances in which either the tribe did not report a contribution noted by a candidate or a candidate did not report a contribution noted by the tribe.
“That’s why I was calling for a complete audit of their activity,” said Hall. “Not that I’m suggesting there is something illegal. It could just be a matter of some clerical errors or some oversight somewhere along the line.”
Patrick Gannon, public information officer for the election board, said that state law prohibits him from commenting on whether an investigation resulted from Hall’s letter.
Before 2002, the tribe wasn’t allowed to make campaign donations at all. In 1998, the state’s election director ruled that the tribe was barred from making donations due to its status as a corporation. But in 2002, the tribe secured a hearing before the N.C. Board of Elections and argued that it had not used its status as a corporation — it did not file any corporate reports, have a board or corporate directors, or pay federal or state corporate tax. But it is, they told the board, a federally recognized Indian tribe with a government-to-government relationship with the U.S. As such, it should be allowed to donate.
The board agreed with the tribe. In addition to lifting the ban on contributions, the resulting order stated that the tribe is subject to contribution limits — the limit for 2018 was $5,200 per election — and that it “shall not use funds from any business entity they have an ownership interest in, or funds subject to the Indian Gaming Regulatory Act” to make donations.
‘We’re in compliance’
A lot has changed since 2002, when the casino was just five years old. While the tribe isn’t allowed to use its gaming revenue for campaign contributions, the growth of that industry has certainly stimulated other revenue streams to flourish alongside it.
“The level of money is getting so large that they need to go ahead and begin to file electronically,” said Hall.
“Money talks in the legislature, and this is a serious amount of money,” he added.
Principal Chief Richard Sneed said that Hall’s research turned up some reporting errors that should be addressed, but he pushed back against any implication that the tribe’s donations are unduly influential or purposely opaque.
“Those need to be corrected,” he said of the reporting discrepancies, “and we need to make sure we’re paying close attention to the reports, but there were no instances of inappropriate donations. There were no accusations of donations that are larger than what is allowed by law. We’re in compliance on the donations.”
Regarding the difficulty of accessing reports filed on paper versus electronically, Sneed said that’s an issue that should be dealt with by the Board of Elections.
“We don’t make the rules,” he said. “We’re just going by the rules they gave us.”
As to whether the tribe’s sizable campaign contributions will be a factor in whether the legislature legalizes sports betting on the Qualla Boundary, Sneed said there is “no correlation between the two.”
“We didn’t make this,” he said. “We’re just participating in a system that was created by the state and federal government. Is that how it should be? No, I would love it if it was a different system, but it is what it is.”
Comments from legislators
In the 2018 election cycle, the tribe contributed to 69 candidates for state House and Senate seats — 40.6 percent of the 170 total members of the General Assembly. The two versions of the sports betting bill have a combined 31 sponsors, 19 of whom — 61.3 percent — received campaign contributions from the tribe in the last election cycle.
Local representatives said the contributions had no impact on their position on the sports wagering bill.
“It has no relationship to my service to them or any other constituent,” said Sen. Jim Davis, R-Franklin, who received $5,200 in the last election cycle. “I do it because I’m willing to do it. Nobody has ever threatened me with the lack of or promise that if I do something that I will get a campaign contribution. It’s never a quid pro quo.”
“I accept contributions from across the board, from different entities, and I never once had somebody say, ‘We’ll give you a campaign contribution and by the way, we want you to do so and so,’” agreed Rep. Kevin Corbin, R-Franklin, who received $5,000 from the tribe. “I’ve never had that happen. If it did I would give it back to them. I don’t work that way.”
In fact, said Corbin, he’s got multiple examples of bills he’s championed that his donors have opposed. For instance, in March 2018 he received $1,000 from the North Carolina Beer & Wine Wholesaler Association but has twice introduced legislation that would increase school calendar flexibility, something the group opposes. Corbin said he’s taken other votes that have conflicted with the wishes of donors such as Southern States Police Benevolent Association PAC Fund, which gave him $1,000 in February 2016, and various medical groups.
“They actually do not influence me in any way,” said Rep. Michele Presnell, R-Burnsville, who received $5,200 from the tribe in the last election cycle. “I just use them to pay for signs and brochures and things like that.”
Unlike Corbin and Davis, she is not a sponsor of the sports betting bill and when asked her opinion on it said she was not aware of it.
Waynesville Democrat Rep. Joe Sam Queen’s situation is opposite that of Presnell’s. While he has received donations from the tribe in past elections, the Eastern Band did not contribute to his campaign this time around. Nevertheless, he signed on as a cosponsor of the House bill.
“I’m doing it because it’s good for Western North Carolina,” he said. “I think it’s good public policy. It’s a good way to manage and contain a popular kind of gambling that’s in demand.”
Queen doesn’t take it personally that the tribe declined to donate to him this time around.
“They are not a particularly partisan player,” Queen said of the tribe. “They are a self-interested player. They represent their own tribal interests with their PAC monies, and if they think the power structure is Republican, they contribute to the power structure.”
That was evidently the tribe’s read on things in 2018, with Republicans making up 62.3 percent of its donation recipients in that election cycle. Nearly all of those donation recipients won their races — of the 69 General Assembly candidates the tribe gave to, only six lost their election bid.
In Queen’s view, there’s a lot wrong with campaign finance laws overall right now, with money playing too big a role in who wins elections.
“Money in politics is corrosive from any source,” he said. “My friends or your friends. Big, dark money is not good for North Carolina or America.”
But as far as the tribe is concerned, he said, they’re just trying to win the game based on the rules that have been laid out for them.
“They’re playing the hand they’ve been given,” he said.