Ethics commission: State has defanged its watchdog

The state ethics commission is an agency in free fall.

That is not news to local officials who complain of its slow, inefficient bureaucracy, or state officials who kick it around like a political football, or even good government groups wailing at its ineffectiveness.

Still, the completeness of its collapse is striking. In five years, the commission’s funding declined 41 percent, and its staff was cut by a nearly equal percentage. The number of cases it handled plummeted even more. Civil penalties it levied for ethics violations dropped 94 percent.

The commission — the only independent agency in the state that monitors rules on campaign cash and government lobbying — was at its most aggressive in 2008, issuing record fines and even beginning a regimen of random audits of candidates’ files. After that banner year, the decline began.

“There is no question in my mind they are being strangled by the Legislature in order to keep them from enforcing the ethics law,” said attorney Michael Jablonski, who often represents Democratic clients before the commission. “These are people who want to do their job. They just are not given the resources to do it.”

Marshall Guest, spokesman for House Speaker David Ralston, R-Blue Ridge, noted last week that the commission’s budget is about $250,000 larger than it was last year — the commission’s first budget increase since 2008. Guest said the increase went to hire a new auditor, a data programmer and for computer upgrades.

Taking a longer view, Guest said the commission’s budget today is 60 percent larger than it was in 2005 when Republicans took over both legislative houses.

“Even with the commission’s added responsibilities, overall, this is a dramatic step up in state funding given the economic downturn,” he said.

Members of the commission say it’s not surprising that the agency accomplishes less, given the reductions of the past five years. But Chairman Kevin Abernethy says the commission is doing a better job this year and will continue to improve.

The agency – formally called the Georgia Government Transparency and Campaign Finance Commission – is a small state office with big responsibilities. According to its description in the state budget, the commission’s purpose is to “protect the integrity of the democratic process.”

The commission does that, in part, by collecting campaign finance reports for state and local candidates and political action committees; registering lobbyists and receiving their spending reports; and investigating complaints alleging violations of the laws involving those reports.

If a candidate is hiding campaign contributions or if a PAC is funneling money into legislative campaigns and not reporting it, the ethics commission is supposed to investigate and correct it. If a lobbyist is wining and dining a public officials but isn’t registered or doesn’t disclose the expense, the ethics commission can sanction him or her.

But records show the commission isn’t performing those duties as it once did.

A high, and a crash

The Atlanta Journal-Constitution reviewed budget, staffing, revenue and case resolution records over the past decade to measure the arrhythmic pulse of the ethics commission over time. What the AJC found was a close parallel between the commission’s funding and its output.

In 2008, the commission closed 116 ethics cases, collecting $195,000 in civil penalties.

That year, the commission had a budget of $1.9 million and 18 staffers, including several investigators, a certified fraud examiner, and multiple employees dedicated to keeping the agency’s farm of computer servers humming. Using the measures of resources and production, that year was a high-water mark for the ethics commission.

In 2011, the commission closed just 15 cases, according to a database of resolved cases on the ethics commission website. On May 22, 2008, the commission closed 16 cases in one day.

On that day, commissioners assessed more than $172,000 in fines, including a record $80,000 penalty against the Georgia Association of Realtors for failing to disclose $585,000 in campaign donations made through the group’s PAC. The commission also fined two members of the Georgia Board of Regents a combined $77,750 – one for making “proxy” donations to campaigns through family and friends to get around contribution limits and another for failing to disclose his business interests, including one that got a lucrative contract with the university system. Smaller fines were levied against state and local public officials and candidates for less extreme abuses.

The commission’s executive secretary that year, Rick Thompson, said the agency had turned a corner.

“There has been a lot of talk in the past few years that the commission is a paper tiger, ” he told the AJC at the time. “With the hard work of the commission staff and the strong support of the commissioners, that should be rapidly changing.”

Change came, but not the way Thompson predicted.

‘Punitive’ and ‘silly’

The more aggressive approach to handling complaints was rewarded with a 20 percent budget cut in 2009 and another 24 percent cut in 2010.

The commission responded to the cuts by doing less with less.

In 2009, the number of resolved complaints dropped 41 percent to 69 cases. By 2010, the commission was working with a staff nearly half the size it had just two years before, and the number of resolved complaints dropped to 14 for the entire year.

In 2011, the commission assessed just $10,850 in civil penalties, according to state records. That’s a 94 percent decrease from 2008.

While it is true that state offices have experienced budget cuts in recent years, few have seen their budgets slashed like the ethics commission.

The Georgia Real Estate Commission, which licenses agents and brokers and investigates real estate complaints, has had its budget cut 17 percent since the 2008 fiscal year, compared to 42 percent for the ethics commission. The Georgia Drugs and Narcotics Agency, which inspects pharmacies and investigates complaints related to the distribution of prescription drugs, saw its budget increase by 34 percent since fiscal 2008.

Georgia’s poorly funded ethics commission has plenty of company. In a report released last month, the Center for Public Integrity, a nonprofit investigative news agency, found state ethics offices around the nation overloaded with complaints they cannot investigate with their tiny budgets.

While cutting its budget, the General Assembly dealt the agency another blow by stripping rule-making authority from it. This meant, in effect, that the commission could not write new regulations.

Atlanta attorney Bill Jordan, who chaired the ethics commission at the time, said he never believed the budget cuts were some kind of conspiracy to weaken the office, but he said taking away a power common to every other executive branch office was both “punitive” and “silly.” Abernethy, the current chairman, has urged the Legislature to restore the commission’s rule-making authority.

Turnover at the top

In addition, the commission has suffered from rotating administrations. Teddy Lee, the commission’s long-serving executive secretary, held that office from 1990 to 2006. Thompson was top administrator through October 2009, but when he left the commission didn’t hire his replacement — Stacey Kalberman — until six months later.

Kalberman said cases didn’t move in the interim period and it took a while for her administration to get up and running.

“We started getting through a lot of cases in 2010, particularly when Sherry got there,” she said, referring to her deputy Sherilyn Streicker. “Don’t forget that 2010 was also an election year and we had tons of cases filed. We were doing a lot of intake.”

Kalberman left amid a struggle with commissioners over her pay, which the commissioners wanted to reduce by a third. The threatened cut came as Kalberman was investigating the campaign finances of Gov. Nathan Deal.

When Kalberman left, the commission also fired Streicker and eliminated her position. Both have sued the state and the commissioners and Deal’s office have denied their departures were related to the investigation.

A year later, the ethics commission cleared the governor of major violations, which effectively ended more than two years of state complaints and investigations. Deal agreed to pay $3,350 in administrative fees for a series of “technical defects” in his financial and campaign disclosures. A commission staff draft of an earlier proposed agreement recommended $70,000 in fines, but that never made it to the commission for a vote.

If dealing with a smaller budget, reduced authority and administrative changes weren’t enough to wound the commission, the General Assembly dramatically increased the agency’s paperwork duties. Ethics law changes passed in 2010 made the commission the repository for campaign finance filings for local officials as well as candidates for the Legislature and statewide office, exponentially increasing the number of officials filing directly with the office.

Budget cuts have infringed on some of the commission’s basic functions, like putting campaign finance data online.

Currently, reports mailed in by candidates are not being scanned into the online system. Anyone who wants to see them must come to the commission’s downtown office and pay search and retrieval fees, according to a message on the commission’s website.

State law requires that the commission review every report filed with it. That’s never been done, mostly because the Legislature keeps increasing the number of reports the commission is responsible for while decreasing its budget.

Holly LaBerge, the commission’s current executive secretary, said the commission set a goal of randomly auditing 10 percent of reports filed, but due to limited staff that project has been set aside in favor of reviewing complaints filed with the office.

‘At the mercy of legislators’

The commission’s aging network of computer servers has become increasingly creaky, and officials who rely on it to file their required paperwork complain of outages during peak times. Brian Hess, a Marietta-based information technology consultant who built the system, blamed the computer system’s unpredictability on budget cuts.

“You know the Legislature on ethics,” he said. “In front of people, ‘We support it.’ And behind their backs they don’t fund it.”

Hess worked for the commission as its computer chief during Thompson’s administration. At the time, the system had built-in redundant servers and a full IT staff supporting it.

“Before I left it was just me and one other guy,” he said.

This summer, LaBerge signed contracts to spend up to $240,000 a year to acquire server space for the commission’s massive databases and to shore up the system’s operations.

That the ethics commission is perpetually underfunded is just part of the problem, Sen. Josh McKoon, R-Columbus, said. Where it gets its money is another, he said.

“It’s difficult for there to be an independent investigative agency if they are annually at the mercy of the legislators that they are supposed to regulating,” he said. “They are the only ones who are in a position to regulate members of the General Assembly… . Unfortunately they’ve been largely sidelined by the changes that have been made in the law over the last couple years.”

A number of states, including Alabama, have dedicated funding sources for their ethics commissions, a move intended to keep politics out of their annual budgets.

House Majority Whip Ed Lindsey, R-Atlanta, who has penned several fixes to the state ethics law in recent years, gave the current commission a “B-minus to B” grade but said anything less than an A is unsatisfactory.

“Most of the problems involve timeliness,” he said. “That can certainly be aided by additional funding and we are looking into the issue of how much and where is the best place to spend it.”

He doesn’t buy the idea that the ethics commission had a “golden era,” in part because of changes in the state ethics law are always putting new burdens on the commission.

“Since 2005, we have expanded the transparency requirements, but there has been a constant public thirst for more – as is the people’s right as the owners of the government,” he said. “For that reason, I want to focus on where we are and where the public believes we need to be. That should be our focus this fall as we head toward next January.”

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Staff writer Daniel Malloy contributed to this report.