Lexington County Sheriff James Metts will return about $4,500 in campaign contributions from people and businesses with ties to the Internet sweepstakes industry.
Metts made the decision late Thursday night after The State newspaper showed him an order from a Lexington magistrate that ruled a Phone Time Promotion machine owned by East Coast Vending Distributors was an illegal gambling device and should be destroyed.
As a result of what you sent me, Im going to return the money to those individuals and those companies, Metts said. If they say its illegal in Lexington County, thats good enough for me.
The decision to refund campaign contributions to East Coast Vending and four other contributors comes amidst a firestorm that has erupted in Lexington County over the Internet sweepstakes industry.
Metts earlier Thursday told The State he had suspended Danny Frazier, a Lexington Town Council member and part-time sheriffs department employee, until he has results from a State Law Enforcement Division investigation into Fraziers dealings with the Internet sweepstakes industry. Frazier will not be paid while he is suspended, Metts said.
Meanwhile, Lexington town leaders today are calling on Frazier to account for his alleged dealings with online gambling during a closed-door meeting of council.
The controversy erupted earlier this month when an informant released copies of a recorded conversation between Frazier and an unidentified person who sought advice on setting up Internet sweepstakes machines. In those recordings, which have been made public by WIS-TV and the weekly newspaper The Free Times, Frazier boasts that multiple elected officials are indebted to him and will not seize machines he is affiliated with.
Frazier on Tuesday released a statement saying he made an error in judgment when boasting about his political importance but did not mention Internet sweepstakes in the prepared statement.
The Attorney Generals Office on Thursday told The State newspaper that some of the machines owned by Metts donors have been seized by S.C. law enforcement agencies and have been deemed illegal by magistrate judges.
A machine ruled illegal in January by Swansea Magistrate Scott Whittle belonged to East Coast Vending Distributors, a company co-owned by Brett Blanks and Charles Bishop. Blanks and Bishop also co-own Universal Vending of North Carolina and Universal Music, said their attorney, Taylor Heath.
Bishop gave $1,000 on Nov. 15, and Blanks gave $500 on March 21. East Coast Distribution, Universal Vending of North Carolina and Universal Music each donated $1,000 on March 21, according Metts campaign finance reports filed with the S.C. Ethics Commission.
Another company, Magic Minutes, owned by L.W. and Kathy Flynn, contributed $1,000 in January, according to Metts campaign reports. L.W. Flynn is a former investigator in the Richland County-based 5th Circuit Solicitors Office and a 2010 candidate for Kershaw County sheriff.
SLED has seized machines owned by Magic Minutes and East Coast Distribution.
In January, Whittle ordered a Phone Time Promotion machine owned by East Coast Distribution to be destroyed, ruling that it was an illegal gambling device, according to court documents. East Coast Distribution withdrew its request to contest Whittles ruling, according to a letter from Taylor, the attorney who represents Blanks, Bishop and their three companies.
Magic Minutes has lost court cases in Conway and Camden after law enforcement seized its machines, said Jared Libet, an assistant in the Attorney Generals Office who spends most of his time prosecuting Internet sweepstakes cases.
However, Metts said he had not decided whether he would return the money to Magic Minutes, saying he knows of no definitive Lexington County magistrates decision.
Metts, who is unopposed in November, said contributions from those businessmen and their companies were only a small portion of the money he has raised this election cycle.
If the majority of my money was funded by people doing illegal stuff, yeah, I should be hammered, he said. But its not.
The controversy in Lexington is the latest twist in the effort of video gambling operators to re-establish a foothold in South Carolina. The games, banned in 2000, made a return to the Midlands earlier this summer as operators found what they see as a loophole in the states gaming laws. The S.C. General Assembly failed to close the loophole, and there has been no definitive court ruling on the games legality.
But S.C. Attorney General Alan Wilson and SLED Chief Mark Keel have determined that the sweepstakes machines are illegal. And Richland County Sheriff Leon Lott, Kershaw County Sheriff Jim Matthews and 5th Circuit Solicitor Dan Johnson also have said the games are illegal.
The machines allow users to purchase phone time or Internet usage and then play online poker, slots and keno for chances to win cash. The machines are popping up across South Carolina in two forms: in freestanding Internet sweepstakes cafes and as individual machines placed in bars, convenience stores and other locations that sell alcohol.
Both versions are in Lexington County.
Metts said he has not provided favors to owners of the machines in exchange for political donations.
I am not providing any kind of assistance, protection or whatever you want to call it, Metts said. Every complaint that comes into this office is being looked into.
The Lexington Sheriffs Department doesnt have the expertise to investigate the machines, Metts said. Complaints have been forwarded to SLED, and the sheriff has assigned deputies to assist SLED with raids on machines in Irmo and in a sweepstakes cafe on St. Andrews Road, he said.
Part of the problem with the individual phone minute machines is that there have been cases in which magistrate judges ruled they were legal.
On Thursday, Metts said he had read cases in which magistrates ruled both ways but that he had not seen the Swansea magistrates order until The State newspaper showed it to him.
Magic Minutes owner Flynn and Taylor, the attorney, said Thursday they have won court cases after law enforcement officials seized their machines.
Flynn said he has been successful in challenging a second case in Kershaw County, and that he has worked hard to make sure his phone minute machines comply with state law.
I hate that were linked to that mess over there, he said of the Lexington County debate over sweepstakes.
Taylor said a Richland County magistrate this year ruled that a Phone Time Promotion machine was legal.
Both companies point to a state law that they think allows them to place the machines in establishments that serve alcohol. The S.C. General Assembly considered two bills this year that would have made it clear the machines are illegal but failed to act, Taylor said.
The machines they operate are the phone dispensing machines, which are legitimately legal, Taylor said about East Coasts machines. Theyre being portrayed as some sort of video poker peddler, but thats not all of their business.
The machine destroyed in Swansea in January was a different type than the versions now placed in bars and stores, Taylor said.
They just didnt think it was worth fighting over, he said of the failure to appeal the destruction order.
Blanks and Bishop did not donate to Metts with the expectation that they could avoid prosecution over their machines in Lexington County, Taylor said.
Theyve participated in the political process like any other citizen, Taylor said. Theyve made no scheme or ring or plot to have elected officials look away.
Flynn said he has known Metts for years through his law enforcement work and often has contributed to the sheriffs campaigns. Flynn said he just happened to have his Magic Minutes checkbook on hand the day he made a donation.
I didnt even have any machines over there when I gave him the donation, he said.
As for Fraziers future, Keel would not comment on SLEDs investigation. Metts said Frazier will remain suspended without pay until he is informed of the results of SLEDs investigation.
And, at tonights Lexington Town Council meeting, members plan to meet in executive session with Frazier to discuss all the noise floating around, Mayor Randy Halfacre said.
We need clarification, Halfacre said. We need to have a better understanding of whats going on. Weve got a lot of little brushfires that could become a firestorm.
Efforts to reach Frazier on Wednesday and Thursday were unsuccessful.
Council doesnt have the authority to discipline Frazier, although it could reprimand him or urge him to step down from the elected post he has held since 2005.
Halfacre is upset at the image emerging of Fraziers alleged business ventures with online gambling. The pair are close political allies.
Im disappointed in the events that have taken place, Halfacre said. I had no clue.
Reach Phillips at (803) 771-8307, Flach at (803) 771-8483.