Oxendine orders $120,000 returned

Republican gubernatorial candidate John Oxendine said Monday he will return $120,000 in questionable campaign contributions less than a day after The Atlanta Journal-Constitution reported on them.

In a statement, Oxendine, the state’s insurance commissioner, said the contributions from 10 Alabama-based political action committees originally appeared to be “from different entities, not controlled by the same person or people. Under those facts, as we understood them, accepting these contributions was perfectly legal.”

The AJC reported Sunday that two Georgia insurance companies with the same boss funneled $120,000 —- about 10 percent of the candidate’s reported contributions —- to Oxendine’s campaign for governor.

The money was received from the two insurance companies through 10 political action committees set up by Donald V. Watkins, who sits on the board of directors of both firms.

Oxendine regulates Georgia’s insurance companies and licenses insurance agents. Georgia’s Ethics-in-Government Act bars public officials from taking money from the companies they regulate. The law also prohibits funneling money through PACs to get around contribution limits of $12,200 per candidate in an election cycle.

Oxendine said he had been confident the contributions were legal under state ethics laws. But, after the AJC questioned the money’s origin, he said he decided both to return the cash “out of an abundance of caution” and ask the Ethics Commission to give a legal opinion about the contributions.

“Based on facts that have recently come to light, previously unknown to us, we have concerns whether our understanding of the facts were complete,” Oxendine said. “Last week, before these facts fully came to light, we filed an advisory opinion request with the Georgia State Ethics Commission.”

The AJC interviewed Oxendine about the contributions twice before publishing its findings.

“Although my staff and legal counsel, Stefan Passantino of McKenna Long and Aldridge, advise that we have done nothing illegal, based on the facts as we know them, I am concerned Georgia voters might see this as politics as usual,” Oxendine said. “Therefore, last week, immediately after my initial awareness of this matter, I ordered the process be set in motion to return every single contribution in question and seek advice as to our rights and obligations to the State Ethics Commission.”

Also on Monday, George Anderson, the executive director of the Ethics in Government Group, filed a complaint against Oxendine with the commission.

Anderson, who often files ethics complaints against candidates and elected officials, said Oxendine violated the state Ethics in Government Act and should be fined and forced to admit “illegal acceptance of said PAC contributions.”

Watkins responded via e-mail Monday, saying the newspaper had distorted the PACs’ purpose. He said if the Oxendine campaign does return the money, they would donate the funds to Atlanta mayoral candidates of its choosing. He said Oxendine’s decision was political, not legal.

Richard H. Burton, vice president and corporate compliance officer for Admiral Life Insurance Company of America, would only say if Oxendine “returns the money, it’s to the PACs. They are not our PACs.” Admiral and State Mutual Insurance Co. are the two firms involved.

Oxendine is one of six announced candidates for the 2010 Republican gubernatorial primary. A top Republican activist downplayed the impact on Oxendine’s campaign.

“Has he taken a hit? In the short term, yes,” said Chuck Clay, a former state senator and former state GOP chairman. “But in the long-term, particularly in a primary, the people who vote in a primary, on both sides, they’re a pretty grizzled lot.”

Still, Clay said, Oxendine did the “politically and ethically prudent” thing in returning the money.

“You don’t want to be seen as captive to a single interest group,” said Clay, who is not supporting any candidate yet. “He’s got ample time to make sure that’s not the case.”

Staff writer Cameron McWhirter contributed to this report.