Will elected officials profit from planned NC casino? Some lawmakers want to find out
CORRECTION: Earlier versions of this article named the wrong Cleveland County manager who offered investment advice to former county commissioner Eddie Holbrook. Former manager Jeff Richardson, not current manager Brian Epley, advised him, Holbrook said.
A group of North Carolina legislators has called for an investigation into current and former local elected officials potentially profiting off the Catawba Indians’ planned casino through their votes on the project and their landholdings.
Two Kings Casino Resort is scheduled to open with a temporary facility this fall off Interstate 85 in Kings Mountain.
“Multiple elected officials and former elected officials who took action on this project stand to benefit from the casino investment,” 14 Democratic House members wrote state Attorney General Josh Stein.
The letter cites “a nearly untraceable network of LLCs” that own land surrounding the casino property and calls out Kings Mountain Mayor Scott Neisler for his family’s extensive nearby landholdings.
No other officials are named in the letter sent by state Rep. Susan Fisher of Buncombe County.
Public records reviewed by The Charlotte Observer show that former longtime Cleveland County commissioner Eddie Holbrook also has a financial stake in land near the casino.
‘I will take an oath’
Holbrook is listed as an officer of E5 Holdings LLC, which owns 22 acres directly across from the casino property, records show.
Holbrook told the Observer on Friday that he voted to support the casino project because of the potential economic benefits to the county. He lost reelection in November 2018 after 12 years on the board.
He said he bought a 10% stake in E5 Holdings, which he said was created after he’d left office as a commissioner. Records confirm E5 Holdings was formed in 2020 in Nevada.
Public records also show E5 Holdings is affiliated with LLCs formed by Wallace Cheves, the developer of Two Kings Casino Resort.
Charlotte-based CHT Enterprises LLC, for instance, is listed as a managing member of E5 Holdings, according to filings by E5 Holdings with the state of Nevada.
In its Nevada business filings, CHT Enterprises lists Blue Sky Cos. as one of its managers. On his Linked In page, Cheves says he owns Blue Sky Cos.
“I never considered it anything at all unethical,” Holbrook said. “My wife and I also purchased an interest in a hotel development in Cleveland County. I voted for (the casino) project because I thought it was good for the county, and it was an opportunity for the county to experience growth in jobs and other things.”
Holbrook said he checked with County Manager Brian Epley, who checked with the UNC School of Government before he invested in the projects. As long as the stakes were 10% or under, he was legally allowed to invest, Holbrook said Epley told him.
And “all we did as a board was say we’re in support of the project, but it was a federal government decision,” Holbrook said.
Holbrook was surprised to learn he’s listed as an officer of E5 Holdings.
“I will take an oath I never did anything purposely wrong when I was serving,” he said. “I tried to do everything properly. I value my integrity and reputation, to be quite honest with you.”
Mayor’s family landholdings
Neisler Brothers Inc. owns about 780 acres between 1 and 2 miles from the casino site, the Observer review of public records shows.
The mayor was listed as treasurer of the company in its annual state filings until its most recent report in June 2020, according to the review.
“It’s really just a matter of transparency when you have this number of LLCs and private individuals who are involved in the creating of this ability for a casino for the Catawba,” Fisher told the Observer on Friday.
“You don’t have any names” of investors in the limited liability corporations, she said. “How can you find out what’s going on with a potential for so much money, so much public money, and no one can find answers?”
Neisler told the Observer no conflict of interest exists in his role as an elected official.
He never voted on the project, he said, and most of his family’s landholdings can’t be developed, because they’re under mineral rights. “You can’t sell it, because they’re mining mica out of it,” he said.
Neisler said he owns just two shares in Neisler Brothers, worth $2,000 apiece.
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He called the letter to Stein “just another heavy-handed attempt by the Cherokees to keep a monopoly in North Carolina.”
“It’s a money thing with the Cherokees,” Neisler said. “This is just a continuation of just trying to smear me.”
Cherokees’ casinos and Catawbas’ plan
The Eastern Band of Cherokee Indians owns the only other casinos permitted by the state.
Harrah’s Cherokee Casino operates west of Asheville, near Maggie Valley about three hours west of Charlotte. Harrah’s Cherokee Valley River Casino is a four-hour drive from Charlotte near Georgia and Tennessee.
On Thursday, North Carolina’s first legal sports betting venues opened in the casinos.
In January, Gov. Roy Cooper and the Catawba Indian Nation signed a revenue-sharing agreement that cleared the way for Vegas-style gaming to be offered at a planned resort in Kings Mountain.
Federal approval is still needed for the type of gaming agreed to by Cooper, but the deal with the state meant construction could start at the site, according to the Catawbas.
A judge has yet to rule on a lawsuit by the Cherokees to stop Two Kings Casino Resort.
Transparency questions
Fisher said the aim of her letter “is not necessarily to call out people who might have a conflict, because I don’t know who they are. What I’m asking the Attorney General’s office for is just to get to a more transparent process.”
Stein spokeswoman Laura Brewer said any investigation would have to be done by local authorities.
“Our office does not have authority to launch an investigation like this unless we are asked by the DA,” she said in an email.
Fisher said legislators have a commitment to the Cherokees and North Carolina residents ”to provide transparency when other tribes want to put casinos in our state.”
“We know South Carolina turned them down for a casino,” she said of the Rock Hill-based Catawbas.
“Who is the actual investor?” she said of those with financial stakes in the LLCs. “There are no names, and we would just like to know. And there are public decisions being made around this compact (with the Catawbas) and who was involved.”
This story was originally published March 20, 2021 at 6:00 AM.