Demand for the Plasma Games product has remained low, state education officials say, even after the company dangled a chance at a free cruise for teachers and administrators who bumped up participation.
All told, legislators have committed $9.8 million to a pot of money public schools can use to purchase company game licenses, despite state Department of Public Instruction officials saying schools couldn’t show the game is improving student learning.
After state education officials recommended to the NC General Assembly in May that the pilot program be ended, a top state House budget writer attempted to move the project from the education agency’s oversight and continue its funding, documents show.
Plasma Games is another example of this state’s Republican-led legislature inserting provisions into omnibus spending bills that benefit specific private businesses and nonprofits with political ties, a practice that in one case has drawn the attention of a federal grand jury.
Plasma Games has a notable investor — the wife of Republican state Supreme Court Chief Justice Paul Newby. It has also had persistent support from House budget writers.
Newby’s statements of economic interest show that Macon Newby has had an investment of $10,000 or more in Plasma Games since 2020, the year that lawmakers first appropriated money for the Raleigh-based company.
Few people have been more critical to the political fates of state Republican lawmakers than Chief Justice Newby. He presides over a court with final say on redistricting plans for state and federal legislative seats, as well as the legislature’s moves to increase its power at the expense of Gov. Roy Cooper, a Democrat.
Last year, Newby and the court’s Republican majority, for instance, reversed a 2022 ruling by a Democratic majority that found the legislature engaged in unconstitutional partisan gerrymandering. The new ruling allowed Republican state lawmakers to create new House and Senate districts that bolster their hold on the state legislature and are expected in November to undo a 7-7 split in U.S. House seats between Democrats and Republicans.
The new districts are likely to lead to at least a 10-4 Republican majority in a purple state with close races in statewide and presidential elections, political experts say.
House Speaker Tim Moore of Cleveland County is likely to benefit after legislators reconfigured the 14th Congressional District to favor a Republican candidate. Moore is running there against a little-known Democrat.
MULTIPLE YEARS OF FUNDING
Hunter Moore, who is not related to the House speaker, started Plasma Games in 2013 under the name of Athena’s Compass, state incorporation records show.
He had worked for several technology companies, including IBM and Boeing, before going to UNC-Chapel Hill to earn an MBA and “build a company that would improve our economy, national defense, and our children’s future by revolutionizing STEM education,” thecompany website says.
Moore and several others developed the “SciOps: Global Defense” video game, the company’s patent application shows. Students who sign on play scientists fighting evil aliens who have come to sap Earth’s energy resources and destroy the environment.
While battling back, students are intended to learn about science — how lasers work, for example, or what materials make the best protective armor. The gaming platform includes lesson plans and printed materials teachers can use.
Plasma Games first hired lobbyists registered with the state in 2018, state records show. In 2019, Rep. Linda Johnson, a Kannapolis Republican and fellow top budget writer Rep. Jason Saine of Lincolnton filed a bill that proposed spending $3 million on a pilot program for the company’s gaming platform in up to 25 school districts in mostly rural areas. Rep. Craig Horn, a Union County Republican and chairman of the House Education Appropriations Subcommittee, was a co-sponsor.
The legislation never made it out of the House Rules committee to reach a floor vote.
The following year, after Newby’s economic interest statement listed his wife as an investor for the first time, lawmakers included $2.5 million for the Plasma Games pilot program in a COVID relief bill. School districts could draw money from the program to pay for licenses to play the SciOps game. The company charged $6,000 per teacher, who could then give an unlimited number of students access to the game, a commerce report said.
The commerce department told lawmakersin a written report a year later, in 2021, that 20 school districts participated, but roughly half of the 498 teachers who had received licenses for the game had not activated them in time to provide feedback.
For those who did, the results were mixed, the report showed. One teacher reported the game was “very engaging,” while another said students found it “braindead,” “boring,” and “stupid.” Female students showed less interest than males, one teacher said, which mirrors how video games fare among teens in society, according to Pew Charitable Trust research.
School administrators generally said in the report they liked the program, but they wanted the state to continue paying for it.
State lawmakers continued funding the Plasma Games pilot, but they moved it to the Department of Public Instruction. They allocated another $2.5 million that year in the 628-page state budget for the program, spending first visible in the House’s version of the budget.
The State Board of Education authorized districts and charter schools to pay Plasma Games $60 per student for a license, but the company also told districts and charter schools they could pay a $48,000 license that covered all of their students, DPI officials said.
Interest in the game among students and teachers showed little improvement, DPI said in a May 2023 report to lawmakers. Nearly 80 percent of licenses to use the game, costing a total of $1.4 million, were not activated.
During that school year, the company tried to boost participation by offering school administrators and teachers a chance to win a cruise for two if they could get 85 percent of their students to play the game and fill out a survey, correspondence DPI received from two school districts showed. DPI also reported the company offered students a chance to win $1,000 scholarships for playing the game.
DPI officials questioned those tactics as they might skew the true interest in the product, Michael Maher, a deputy superintendent said in the interview.
“What we are seeing in essence with this program is that districts apply for it because the money is available,” Maher said in an interview in August. “But people aren’t using it and they are not using it in a meaningful way and we don’t have a real way to evaluate whether or not it works.”
CONTINUED SUPPORT DESPITE LOW PARTICIPATION
Despite the problems DPI officials reported in the 2023 report, state lawmakers agreed to a House budget proposal to up the spending to $3 million that year, with another $1.8 million for this year.
One House budget writer subsequently pressed DPI officials to give Plasma Games the money lawmakers allotted, Maher said, at an April 18 meeting this year at the state legislature. Maher and two more DPI officials, Plasma Games CEO Moore and two company lobbyists, and Rep. John Torbett, who is the House’s budget writer overseeing education spending, were present, Maher said.
Torbett and Moore told the DPI officials that the company should be paid the $48,000 per school district or charter school annual fee, as opposed to the $60 per student fee that was more closely tied to usage, Maher said.
“I expressed to Rep. Torbett that part of my obligation is to be a good steward of taxpayer dollars, and that did not feel to me like I would be fulfilling that obligation,” Maher said.
Torbett’s response, Maher said, was “they are owed this money. They had been appropriated it and they should get it.”
Like Hunter Moore and Supreme Court Chief Justice Paul Newby, Torbett, a Gaston County Republican, did not respond to requests to be interviewed about Plasma Games.
At a State Board of Education meeting on May 2, first reported byWUNC, Maher relayed the expectation that Plasma Games be paid the $48,000 rate that hadn’t received board approval. No one signaled their support, an audio recording of the meeting indicates.
“Good luck with that,” said board vice chairman Alan Duncan.
AN EFFORT TO MOVE AWAY FROM DPI
In June, state House budget writers sought to move the program from DPI and shift oversight to the Department of Information Technology. Rep. Donny Lambeth, a Forsyth County Republican, said he introduced the move in House budget bill language at the request of Rep. Saine and legislative staff.
But the proposal didn’t become law because the House and Senate have yet to reach agreement on a budget this year.
Lisa Crawley, a spokeswoman for the Department of Information Technology, said it was not involved in the proposed move or made aware of the lawmakers’ plans.
Lambeth did not know about the pilot project’s troubled history at DPI, or that the chief justice’s wife was an investor in Plasma Games, he said.
The company should have informed him and other lawmakers about the Newby family’s financial ties in seeking public money, he said.
That’s not required under law, Lambeth noted, but “I personally think you have a moral and ethical obligation to disclose that.”
Paul Newby’s required statements of economic interest show Macon Newby, who could not be reached, has investments of $10,000 or more in roughly 40 publicly traded companies and several private companies.
Among the private companies is NewTuck LLC, an investment firm she owns. It lists investments of at least $10,000 in 15 other companies, including Plasma Games and North State Media, the publisher of the right-leaning North State Journal.
FAMILY TIES
Saine, who first sought the funding for Plasma Games, has a tie to Paul and Macon Newby’s family. Their daughter Sarah is the NCGOP’s finance director, and has worked for the social welfare group, Greater Carolina, which was founded by a legislative aide to Saine. She was listed as the contact on Greater Carolina’s distillery tour in Kentucky that included lobbyists and lawmakers and is now the subject of a lobbying and ethics complaint.
Sarah Newby was also listed in 2022 as a fundraiser for the Carolina Leadership Coalition, another social welfare group which has ties to Speaker Moore. She declined comment. Her attorney, Lawrence Shaheen Jr. said she is bound by confidentiality agreements with her clients.
Such groups have been called “dark money” organizations because they can accept unlimited donations from undisclosed donors.
Hunter Moore has also made political donations to Republicans before and after the money rolled in for the Plasma Games pilot.
In 2018, he gave $100 a contribution to Rep. Johnson, who died in 2020. He gave $700 in contributions to Newby in 2019, after the initial bill had been filed that year. Moore also gave $35,000 to the NCGOP and $5,600 to the N.C. Senate Majority Fund in October 2022, WUNC first reported.
Saine, in a text message, said he did not know about Macon Newby’s investment in Plasma Games, but did not respond to a request for an interview.
Plasma Games has sought to sell its educational gaming to schools in several other states, including Alabama, Kansas, Kentucky, South Carolina, Tennessee and Virginia. West Virginia used federal money to offer it in Morgan County schools, the Morgan Messenger reported in 2021.
But it’s not always been welcomed. South Carolina’s governor vetoed a $1.5 million budget appropriation for Plasma Games in 2022, The Post and Courier of Charleston reported. He and other lawmakers said the company should seek the money not from a direct appropriation but from a competitive grant program in the state’s education department.
IN THE DARK
The N&O’s Power & Secrecy series has reported multiple cases where politically connected North Carolina businesses and nonprofits have benefited in recent years from earmarked spending in state budgets and other omnibus spending bills.
A federal grand jury is investigating money state lawmakers gave to a nonprofit to start a domestic violence monitoring program, a subpoena obtained by The N&O shows.
When asked, Democrat lawmakers expressed frustration over the way their Republican colleagues have funded Plasma Games. They were not aware of Paul Newby’s family ties to the company, they said.
“The more we’re finding out the more it seems to be unethical,” said Rep. Marcia Morey, a Durham Democrat on the House budget committee and a former chief district court judge.
The money to Plasma Games is part of a bigger issue Democratic lawmakers have with the Republicans’ spending, said House Minority Leader Robert Reives, a Chatham County Democrat.
“We’re doing business with companies that don’t have to put in bids, they automatically get these contracts, and we don’t know who these businesses are,” Reives said. “There’s no vetting, there’s no openness about who we are dealing with and that makes me uncomfortable.”
Lambeth, who has been a top state Republicanbudget writer since 2015, blamed the budget process for the lack of transparency.
The way budgets are developed needs a “wholesale overhaul,” he said. Among possible solutions would be separate staffs for House and Senate budget writers who would work through the year on the spending plan and have more time to vet requests for money.
“We do move fairly fast and there is not a lot of time to question and slow the process down,” he said.
Several lobbyists have represented Plasma Games in the N.C. General Assembly, including Dylan Reel, a former general counsel to House Rules Chairman Destin Hall who “provided legal advice and strategy” to Speaker Tim Moore “throughout the redistricting processes and subsequent litigation,” according to Reel’s bio.
Another is Franklin Freeman, a former top aide to then Gov. Mike Easley, a Democrat who held office from 2003 to 2009. Freeman and Goodman work for McGuireWoods while Reel recently left it to join a law firm.
The three lobbyists did not respond to phone messages.
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