Politics & Government

Elections official: Foley knew of sweepstakes tie

Paul Foley
Paul Foley

Former state elections board member Paul Foley, who resigned Wednesday night under pressure from the governor, said he knew about his law firm’s involvement with a video sweepstakes executive the elections agency was investigating soon after taking office in 2013, according to records that surfaced Thursday.

That conflicts with Foley’s statements that he didn’t know about it until elections officials informed him in September 2014 they had discovered the Winston-Salem office of the firm, Kilpatrick Townsend & Stockton, had received nearly $1.4 million from the executive, Chase Burns.

As recently as Wednesday’s board meeting, in which Foley participated by speakerphone from Atlanta, he said in a prepared statement that he didn’t know of the “significant” legal fees until last September. He has declined to discuss publicly how soon he knew of any connection between the firm and Burns.

The documents, obtained through a request for records the elections board shared with the attorney general’s office, show that soon after investigators informed him they had discovered the connection – as elections officials tried to address potential conflict of interest concerns – Foley was adamant that he would not resign.

He said he fully intended to recuse himself when the final report on the video sweepstakes case came before the state board. The board has spent the past two years investigating possible campaign finance violations involving Chase Burns, but has found no reason to refer the case for prosecution.

The records include handwritten notes by elections agency communications director Josh Lawson taken during a phone conversation with Foley in October, and text messages between Lawson and Brian LiVecchi, special counsel to the board.

Lawson confirmed Thursday that, as his notes reflect, Foley told him he knew 14 months earlier that his law firm received video sweepstakes money from Chase Burns. Foley said he had told chairman Josh Howard at the time, according to the notes.

Lawson’s notes also reflect that Foley contradicted himself at one point in the conversation, and said he didn’t know about it. The phone call came after Elections Director Kim Strach, in a phone call with Foley, Lawson, LiVecchi and another board member, told Foley it would be inappropriate for him to continue asking questions about the investigation, as he had been since taking office. The next day Foley called LiVecchi to discuss the matter, text messages between LiVecchi and Lawson show.

The records of the phone calls were sent to the attorney general’s office earlier this year when Howard called for an internal review of Foley’s actions by a senior deputy attorney general there. Alexander Peters’ report, issued in June, notes Lawson’s description of the phone call with Foley. The probe found Foley hadn’t improperly influenced the investigation but left to other agencies to determine if he was being truthful about the connection between his firm and Burns.

Kilpatrick Townsend & Stockton represented Burns in a constitutional challenge to the state’s sweepstakes law that went to the U.S. Supreme Court. Foley said Wednesday that the law firm has thousands of clients and he was never involved in representing Burns.

Foley’s resignation was announced by the elections office shortly after midnight with the release of his letter to the board chairman:

“After much thought and consideration, I ask you to accept my resignation from the North Carolina Board of Elections to avoid distractions from the important work of the board.”

The office also released an email Howard wrote to Strach:

“Board Member Paul Foley has asked me to accept his resignation to avoid distraction from the important work of our Board. I regretfully accept his resignation.

“There has been no finding of wrongdoing by Mr. Foley, and the report we requested from the Attorney General found no improper influence by Mr. Foley over the outcome of the Board's efforts in the matter of Chase Burns and IIT, LLC.

“I appreciate Mr. Foley’s dedicated service to the Board of Elections and the many hours he has committed to the Board and the citizens of North Carolina.”

The vacancy will be filled by Gov. Pat McCrory after he receives three nominees from the state Republican Party chairman, Hasan Harnett. The replacement member will serve out Foley’s term, which expires May 1, 2017.

McCrory said late Wednesday he asked Foley to step down, but that Foley declined, saying he had done nothing wrong. That prompted the governor to say he would pursue legal avenues to force him out. The governor does not have the authority to simply remove him.

Bob Hall of Democracy NC, the watchdog group that raised questions about the video sweepstakes industry, said it was surprising Foley denies he did anything wrong by pumping investigators for information about his employer.

“I've never seen a board member, Republican or Democrat, so miserably fail to recognize their duty to serve the public interest, rather than a selfish business or partisan interest,” Hall said in an email. “The State Board of Elections had no hope of being a credible agency if Foley continued to serve and be accepted as a member by his peers.”

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