Ethics probe of lawmaker Seabaugh quietly vanishes

The State Ethics Commission recently closed one of its oldest cases when it imposed a relatively small $2,500 fine on onetime Senate Majority Whip Mitch Seabaugh for a series of campaign disclosure violations in a case that dates back to 2003.

It brought to a quiet close a case that investigators thought would end with a legal bang. Instead, it ended with a whimper.

Only a few years earlier, state investigators thought they had uncovered so many financial problems with Seabaugh’s campaign reports that they asked Attorney General Thurbert Baker’s office to open a criminal probe — twice.

Commission investigators stated that campaign disclosure forms appear to show Seabaugh repaid himself $21,000 more than he’d loaned his campaign. Investigators said the records showed that he also was reimbursed by the state for purchases he made from his campaign account. In documents obtained by The Atlanta Journal-Constitution, investigators speculated that he used his campaign account to pay for personal expenses including home cable and Internet services and trips. Such payments are forbidden under state ethics law. And they said that he did not disclose thousands of dollars in campaign contributions.

Seabaugh said he didn’t intentionally do anything wrong, but Ethics Commission staff asked Baker to review their investigatory files for possible criminal proceedings. The deputy attorney general working with the Ethics Commission on its cases at the time expressed concerns Seabaugh might be using campaign money for personal expenses. He recommended a full investigation. However, Baker’s office opted not to conduct a formal criminal investigation.

When the case was closed last month, the AJC filed an Open Records Request to review the seven-year investigation. Under state law, such records are not available to the public until after a case is settled.

Candidates are required to file campaign disclosures reports to show who gave their campaign money, and how it was spent. Under state law, campaign money can be used for campaign expenses — not for personal expenses.

Seabaugh, a Sharpsburg Republican, said he did not overpay himself for the loans he made or use campaign money for personal expenses. Seabaugh, an accountant who owns an administrative services business, said the case stemmed from his campaign making errors filling out disclosures. He admitted the disclosures were wrong.

“My campaign staff and I made some mistakes and we wanted to work through it, get it fixed and take responsibility for it,” said Seabaugh, a longtime fiscal hawk in the Senate.

The senator said he had no contact with the commission for five years while the case was investigated, before being concluded last month. During most of the investigation, Seabaugh was part of the Senate leadership team. He is running unopposed for re-election to the Senate this year.

Seabaugh’s attorney, Doug Chalmers, said in the end, many of the serious allegations the commission staff made were “ultimately not proven and established” as fact.

“The Ethics Commission staff initially thought it was a much more serious case than it ended up being,” he said.

But Rick Thompson, the former executive secretary of the Ethics Commission and the man who initially investigated the case, disagreed. He called the recent settlement “the craziest thing I ever heard of.”

“The attorney general’s office sat on this forever. I have no idea why. To me it was pretty open and closed,” he said.

“I am somewhat disturbed that the commission would resolve a case of this magnitude for $2,500,” he added.

Teddy Lee, who was Thompson’s boss at the Ethics Commission at the time, said of the final agreement, “Based on my recollection of the case, I am surprised that was all that was done.”

Baker, who recently lost the Democratic primary for governor, declined to be interviewed.

His spokesman, Russ Willard, said Baker’s office did not sit on the case. He said the attorney general determined a criminal case could not be made.

“When we’re looking at it in terms of surviving motions in a criminal case as well as convincing a jury ... it makes it a case that is not appropriate for criminal prosecution,” Willard said. He said prosecutors would have to show Seabaugh “knowingly and willingly” violated ethics laws, which he said could not be proven.

Seabaugh’s was one of several old cases that the Ethics Commission and Baker’s office have been trying to clear off their books recently.

Over the years, the Ethics Commission has been hampered by case backlogs, a shortage of money, staff turnover and changes in state ethics laws. State lawmakers — frequently the target of ethics complaints — have not always been supportive of tougher ethics statutes, and the commission’s powers are limited by the laws those legislators approve.

Thompson complained two years ago that the attorney general’s office was stalling cases, some dating back to 2001. Baker’s office blamed the Ethics Commission for slowing down the process.

In late 2003, ethics watchdog George Anderson filed a complaint against Seabaugh, alleging a series of reporting irregularities.

The Ethics Commission held a preliminary hearing on the case in 2004 and found reasonable cause to do a full investigation. Seabaugh voluntarily came in and presented Thompson with a box of documents that he said explained the mistakes in his campaign reports.

Thompson said he then had Seabaugh’s bank records subpoenaed and found a series of new problems.

The attorney general’s office represents the Ethics Commission in legal matters and handles the prosecution of cases if necessary.

According to two memos to Baker from Mike Hobbs, the deputy attorney general handling the case in 2006, commission investigators said that Seabaugh’s disclosures suggest he wrote himself campaign checks worth $35,000 to repay $13,625 he loaned his campaign. Investigators’ reports state that campaign records and bank records Seabaugh received state reimbursement for office supplies, 10 World Trade Center medallions, a Kiwanis Club lunch and flags that his campaign also purchased.

In one memo, Thompson of the Ethics Commission asserted that Seabaugh:

● Failed to disclose $52,000 in campaign contributions from 2000 to 2004.

● Did not account for how he spent $11,000 billed to an American Express card.

● Used the account to pay for personal expenses and that thousands of dollars were paid to family members. Paying family members for campaign services is not illegal.

One of the memos said that Seabaugh’s forms and bank records showed his campaign and the state reimbursed him more than $16,000 for mileage between July 2003 and September 2004.

“Given the number of irregularities, and the large amount of money that has been paid to Mr. Seabaugh and members of his immediate family out of his campaign funds, it is my suspicion that Mr. Seabaugh has been using the money for non-campaign purposes,” Hobbs wrote in a Nov. 2, 2006, memo obtained by the AJC through the state Open Records Act. “It is also apparent that Mr. Seabaugh had double-dipped to some extent with his Senate expense reimbursements.”

“It is my recommendation that an inquiry be conducted to bring all information current and to fully explore these matters,” Hobbs said.

Double-dipping in this case refers to the state and his campaign paying for the same thing.

The most consistent accusation by commission investigators was the loan repayment, which appears in several documents. Seabaugh told the AJC it only looked like the repayment was more than the original loan because his campaign didn’t document all the money he personally put into his campaigns. Had the campaign done that, it would have been clear he was only paying himself back for what he spent on his races.

“There were numerous in-kind contributions that we paid out of our pocket that we didn’t disclose properly,” he said. “We just didn’t report it clearly and correctly.”

Hobbs is now in private practice. He said he didn’t follow the case once he left the attorney general’s office and didn’t know it had been settled.

Lee, who was executive secretary of the Ethics Commission when the case was opened, asked the FBI to look into it. However, Hobbs wrote in one his memos that the FBI determined that there was no “appropriate federal statute” that fit the case.

In mid-2009, Thompson announced he was leaving the commission and one of his staffers, Tom Plank, became interim executive director. In June 2009, the deputy attorney general handling the case sent Plank a proposed “statement of matters asserted,” a document to be presented to the Office of State Administrative Hearings that lays out the case.

In it, the report stated that Seabaugh’s campaign reports from 2000-2004 contained 179 “technical violations” and 81 “questionable expenditures that are either not explained or do not appear to be ordinary and necessary in accordance” with state ethics laws.

Potentially, Seabaugh could have been fined more than $200,000 if most of the violations were upheld. Instead, he was fined $2,500 and agreed to repay his campaign $2,500.