In N.C., Scandal Arrives Before New State Lottery

"I felt unclean," said Sen. Fletcher Hartsell, a moderate Republican from the NASCAR hub of Concord, who voted against the lottery.

The sleight of hand used to pass the lottery foreshadowed the mess that followed, he said. "It literally did fulfill the worst-case scenario."

The unraveling began with the disclosure that Meredith Norris -- who stepped down as top political aide to Black after the controversy broke -- had been working as a consultant for Scientific Games Corp., one of the two major lottery companies in the country. Soon the North Carolina secretary of state, who regulates lobbyists, was investigating whether Norris was more than a consultant and had lobbied for Scientific Games without being properly registered. The company later filed reports showing Norris submitted expense reports to the company for thousands of dollars worth of meals with legislators. Then the FBI stepped in.

Black's office received subpoenas for hundreds of documents covering a range of people and subjects, including the lottery's passage, Norris, her clients, Scientific Games and one of its lobbyists. FBI agents also asked for records from a country club where Black held meetings.

Black curtly brushed off Republican calls for his resignation and emphasized that the grand jury has not charged anyone. "Why should I step down?" he asked in an interview. "I've not been accused of anything. I'm still doing a good job. . . . Everywhere I go, I'm facing larger crowds than I ever have and they're as supportive as ever."

Longtime Democratic political researcher Joe Sinsheimer is not among them. Sinsheimer, who said he was outraged by the revelations about Black, has started a Web site, http://www.jimblackmustgo.com , and has been digging up and promoting unflattering nuggets about Black.

Others are also weighing in. Secretary of State Elaine F. Marshall, a tough pol who trounced racing legend Richard Petty in her 1996 campaign, concluded that Norris, Scientific Games and its lobbyist had broken the law. Marshall handed the case over to the state attorney general for possible prosecution.

Scientific Games revealed the $24,500 it paid to one of the nine new lottery commissioners for lobbying.

"What do you expect the private sector to do when the competition is for a billion-dollar instant business that's a monopoly, that's guaranteed by contract with the full faith and credit of the 10th-largest state in the country?" asked Mavretic, the former House speaker. "What do you think private industry would do to get such a deal? They'd shoot their mothers."

Kevin Geddings, the commissioner who resigned, had omitted the Scientific Games payments from his signed disclosure form and denied any financial ties when asked by the commission chairman and the governor's staff. Geddings was one of two commissioners appointed by Black.

Another commissioner already had resigned because of the workload, and a third -- also appointed by Black -- stepped down after receiving a subpoena from the grand jury. He testified two days later.

The lottery commission has targeted an April 5 start for North Carolina's game, four months after the executive director began work. Only Tennessee has started its lottery so quickly, but Easley said the disruption over the lottery commissioners is over. Once the game is underway, he said, it will soon be generating money earmarked for teachers, schools and scholarships.

"The big deal is what it pays for, what it provides, the opportunity it provides," Easley said, "and that is the only reason why I have ever had any interest in supporting it. It's just a means, it's a process."

The Tar Heel state is predictably suffering through exactly what other states endured when they stepped into the gambling world, said Daniel T. Blue Jr., a Democrat and former state House speaker. It is the price for raising an estimated $425 million a year in education money.

"It's the age-old smell test: Even if you don't see it, if it smells bad, you tend to be repulsed by it. You keep suspecting there's something that's bound to create the stink," Blue said. "Is the money worth all the stain against the state's reputation?"

The answer may be yes. Recent North Carolina polls continue to show overwhelming public support for the lottery.