- Associated Press - Thursday, July 16, 2015

RALEIGH, N.C. (AP) - A member of the North Carolina Board of Elections has resigned over his failure to recuse himself from an investigation into political donations by an Oklahoma Internet sweepstakes magnate represented by his law firm.

Paul J. Foley resigned late Wednesday, less than a week after The Associated Press reported that for 17 months he regularly pressed staff at the agency for details about the probe targeting his firm’s longtime client. He recused himself Sept. 29, but only after elections staff learned of nearly $1.3 million in payments from Chase Burns to the firm where Foley is a partner.

At issue were more than $270,000 in questionable checks from Burns to the campaigns of elected officials. The board concluded Wednesday the donations were legal.

Messages left for Foley early Thursday were not returned. But he said in an email he was resigning “to avoid distractions from the important work of the board.”

Foley was appointed to the board in 2013 by Gov. Pat McCrory. But Foley and McCrory were at odds Wednesday.

McCrory said he asked Foley to resign, but Foley refused. McCrory promised he would use another law citing “misfeasance, malfeasance or nonfeasance” to throw Foley off the board.

At first, Foley issued a statement saying it was inappropriate for the governor to ask a member of an independent board to resign and that he did nothing wrong. But a few hours later he emailed his resignation, shortly before midnight.

Burns and his wife were among the top donors to North Carolina candidates in 2012, as the industry was lobbying lawmakers to overturn a ban on the games.

Advocacy group Democracy North Carolina filed a complaint in 2013 alleging Burns violated state laws against using corporate money for donations.

Court records show the bank account used to issue checks to North Carolina candidates received regular transfers directly from accounts tied to Burns’ sweepstakes company, International Internet Technologies of Anadarko, Oklahoma. That account and others were later seized as part of a criminal investigation into Burns, with prosecutors describing the money as proceeds from an illegal gambling enterprise.

But in a report made public Wednesday, state elections investigators determined the checking account was originally opened by Burns in 2005 as a personal savings account. Therefore, Elections Board executive director Kim Strach concluded, the campaign money flowing to North Carolina politicians from the account should be considered personal contributions.

Foley has been under scrutiny since Friday, when the AP reported he failed to recuse himself from the investigation targeting Burns, who was represented by other lawyers at Foley’s law firm.

Elections board chairman Josh Howard asked state Attorney General Roy Cooper’s office to investigate whether Foley’s conflict of interest tainted the Burns investigation. But Senior Deputy Attorney General Alexander Peters concluded it was proper for Foley to recuse himself from issues involving Burns. He said Foley’s prodding and questioning didn’t harm the probe.

In a statement Wednesday, Foley said he “was never involved with any representation” of Burns or his company and recused himself when he first learned his firm had been paid “significant legal fees” by Burns in September.

But Foley’s written statement did not address whether he was generally aware that his law partners were representing Burns.

A spokesman for McCrory told AP last week that the potential conflict of interest wasn’t disclosed to the governor.

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This story has been corrected to show that Foley resigned late Wednesday, not early Thursday.

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Follow Associated Press writer Michael Biesecker at Twitter.com/mbieseck

Follow Associated Press writer Mitch Weiss at Twitter.com/mitchsweiss

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