Donor tactics not new

In both cases, using the PACs obscured the original source of the contributions, but raised no legal questions.

The 2008 contributions to Oxendine, however, have prompted an investigation by the Georgia Ethics Commission. Georgia law prohibits contributions from companies to officials who regulate them. It also limits the amount that one person or business can contribute to a Georgia candidate in an election cycle. It forbids a single donor from giving money through multiple sources to skirt the limits.

As the state's Insurance and Safety Fire Commissioner, Oxendine has regulatory power over all insurance companies in Georgia, including State Mutual Insurance Company and Admiral Life Insurance Company of America, both headed by Yancey.

The Atlanta Journal-Constitution reported last month that the two companies funneled $120,000 to Oxendine's campaign for governor late last year using the same Alabama PACs. Georgia and Alabama records showed the money went from the insurance companies to the PACs, which then made donations directly to Oxendine's campaign.

The day after the AJC reported the contributions, Oxendine said he would return the money "out of an abundance of caution."

Yancey has not answered questions about any of the donations and did not return repeated calls seeking comment. Watkins declined to be interviewed by phone or in person, but answered questions by e-mail. He defended the PACs and the money that has flowed through them.

"The PACs are the most transparent ones in the country," he wrote.

All the donations to the PACs followed a similar pattern. Companies led by Yancey sent the same amount of money to all 10 PACS, chaired by Watkins' son, Donald V. Watkins Jr. The PACs then sent the money to one destination. In 2006, that destination was the Georgia Republican Party. In 2007 the money went to a PAC run by an adviser to Kincaid. In 2008, it went to Oxendine's campaign.

In the Birmingham mayoral race, State Mutual sent $90,000 —- in 10 payments of $9,000 —- to the PACs on June 27, 2007.

The next day, the PACs gave $90,000 to the PAC run by the mayor's adviser. That PAC had a balance of just $1,030 at the time. It received another $17,500 in contributions from a bank owned by Watkins, or organizations that shared the same address as the bank.

Watkins, Yancey's father and others founded Alamerica Bank in 2000. Watkins continues to run it.

Over the next two months, the PAC run by Kincaid's adviser gave $95,000 to Kincaid's campaign.

Kincaid lost the election.

Under Alabama law, individuals can give any amount to a candidate. Businesses, however, are limited to giving $500. They can give more through PACs.

The donations to Kincaid attracted the attention of the Birmingham News, which published two articles about them in 2007.

In one of those articles, Watkins acknowledged that the source of the donations was the insurance company led by Yancey.

"State Mutual is a national insurance company that does business in Alabama and 42 other states," Watkins told the newspaper. "The company is politically active nationally. Birmingham is the largest city in the state and they [State Mutual] support the present [Kincaid] administration."

Watkins and the elder Yancey, however, had another interest in the city: Their bank's largest customer was the Birmingham city government, according to the newspaper.

At the time, Alamerica had $72 million in total deposits —- $40 million of which came from the city, the newspaper reported.

Watkins says Yancey is no longer an owner of the bank, but would not say when he cashed in his financial stake.

In the case of the donations to Oxendine, Watkins said the decision to contribute to the insurance commissioner was made by the PACs' supporters, whom he has declined to identify —- not Yancey or his companies.

"The PAC campaign contributions are not influenced by donors," Watkins wrote.

In an e-mail, Watkins said the Kincaid and Oxendine contributions were similar in the "transparent manner" in which PACs gave to the candidates.

Watkins has said the 10 PACs are run by a political group he founded in 2002 called the Voter News Network. Watkins described VNN as "a political friendship circle, business guys."

Watkins, meanwhile, describes Yancey as a "close personal friend."

He said he met Yancey's father, Delos Yancey Jr., in 1996. Yancey Jr. and Watkins "shared a passion for business and banking," Watkins said.

Through Yancey Jr., Watkins got to know Yancey III, who took over State Mutual and its subsidiary, Admiral Life, after his father retired.

Watkins met Oxendine in 2001, while he was considering purchasing part of a Georgia insurance company. While his companies have contributed to Oxendine's previous campaigns for Insurance Commissioner, Watkins says he plans to support Attorney General Thurbert Baker, a Democrat, for governor.

Since starting out as a civil rights attorney, Watkins has wide-ranging business interests and has gotten much publicity in recent years for his attempt to purchase two Major League Baseball teams, the Minnesota Twins and the Anaheim Angels.

In April, the Detroit Free Press reported that Watkins and a business associate persuaded Detroit's two public employee pension funds to invest $30 million in a struggling cargo airline. Seven months later, the airline filed for bankruptcy and the pensions lost their money. The pensions are suing Watkins; he has countersued.

Though his legal residence is in Miami, Watkins has had a home in Sandy Springs since 2003. He says he is considering moving some of his businesses' headquarters to Atlanta.

Cover story | Campaign contributions

Check our sources

http://www.johnoxendine.com

http://www.donaldwatkins.com

http://ethics.georgia.gov

http://www.sos.state.al.us