Sky’s the limit for Ga. PACs

By Jim Walls

For the AJC

Mississippi Gov. and potential presidential candidate Haley Barbour this summer more than doubled his Jackson-based political committee’s bank account. Haley’s Leadership PAC, which collected $148,000 in the previous nine months, pulled in $231,000 after July 1.

Barbour reported the donations not in Jackson, but in Atlanta, where state law allows unlimited corporate contributions to PACs, the common term for political action committees.

Mississippi law caps corporate donations to PACs at $1,000. The sky’s the limit in Georgia, where Barbour’s committee is registered. Barbour’s PAC pocketed seven checks of $20,000 or $25,000 from businesses in his state just in July and August.

There, in a nutshell, is why political action committees love Georgia.

Labor groups formed the first PACs in the 1940s to get around a federal law barring unions from making political contributions directly to campaigns. Today, PACs controlled by corporations, unions and other special interests funnel hundreds of millions of dollars a year into state and federal political campaigns.

Barbour, Gov. Sonny Perdue and hundreds of other elected officials have also formed their own “leadership PACs” to donate to other candidates and to pay for loosely defined nonpolitical expenses. Haley’s PAC, for instance, just paid $3,106 for a list of Republican voters in Iowa.

Georgia’s law regulating PACs is among the most wide open in the country, says Rick Thompson, former executive secretary of the State Ethics Commission.

Many states require PACs to register as soon as they start raising money and to file regular reports on their activity, said Thompson, now a private consultant who stepped down from the ethics panel in 2009.

Not Georgia. PACs here don’t even have to register with the commission until they contribute $25,000 or more to candidates in the same year. (The comparable threshold in Mississippi is $200.)

Other states require PACs to report spending not just for state and local campaigns, but also for federal races and for their own administrative costs. Not Georgia.

Mississippi is among the states that require PACs to report all their income and spending on a regular schedule until they shut down. Not Georgia. A PAC here can raise any sum without reporting the sources, as long as it makes less than $25,000 annually in political donations.

“If I raise $3 million,” Thompson said, “you’ll never know that until the next year that I give more than $25,000 [to candidates].”

What if a PAC spends its money on something other than politics?

Georgia law has “absolutely no restriction on how a PAC spends its money,” Thompson said. The ethics commission issued an advisory opinion to that effect in 2008.

And what if a Georgia PAC with a hefty bank account stops making political expenditures altogether?

“If all of a sudden you decide you’re not going to contribute any more to candidates, there’s no guidance in the law as to what happens to that money,” Thompson said.

That means, as I have noted previously, we may never know how ex-House Speaker Glenn Richardson spends the $220,000 he transferred from his campaign to his PAC in December, just hours before he resigned. Many Georgia lawmakers grumbled, including some within his own party, but nothing was done to prevent other politicians from following suit.

Richardson was fined $500 for failing to register his PAC, the MMV Alliance Fund, as a nonprofit before moving the money over. It has filed no disclosure reports this year and, I presume, it doesn’t have to.

Overall, Georgia’s campaign finance law ranks far ahead of Mississippi’s, primarily for reporting requirements and online access to the information. But specific elements of the Georgia statute, such as the rules for political action committees, clearly fall short of other states’.

Southerners have an old saying, kept alive in part by newsroom cynics, that however bad their state may look in national rankings, there’s usually someone else that looks worse: “Thank God for Mississippi!”

What, do you think, would Mississippians say about the PAC law in Georgia?

Jim Walls, retired investigations editor of The Atlanta Journal-Constitution, runs the watchdog news website Atlanta Unfiltered. Readers may contact him at editor@atlantaunfiltered.com.