Former insurance commissioner John Oxendine is still fighting ethics charges related to leftover money in his campaign accounts and dating back to his unsuccessful race for governor in 2010. AJC STAFF
Photo: Georgia News Lab
Photo: Georgia News Lab

Campaign reports riddled with irregularities, investigation finds

Candidates for office in Georgia are legally required to disclose the money they raise and spend so the public can monitor where it comes from and how they use it.

But a Georgia News Lab-Atlanta Journal-Constitution investigation found candidates often file reports that don’t provide voters with an accurate picture.

The 18-month investigation found that more than three quarters of the candidates for statewide office in 2006 and 2010 had significant irregularities in their filings, ranging from major accounting errors and inaccurate information to missing reports and failure to properly close accounts. The filings contain extensive miscalculations and hundreds of thousands of dollars in unaccounted for campaign funds. The review also found lax oversight by state regulators at the time.

The case of former Georgia Insurance Commissioner John Oxendine sparked the review. The AJC reported in 2015 that Oxendine had not returned more than $500,000 of leftover contributions from his 2010 gubernatorial campaign and spent money for runoff and general election campaigns he never ran because he lost the primary, prompting the state ethics commission to file a complaint against him.

Many charges were dismissed after Oxendine’s attorney argued the panel couldn’t go after old campaign issues. Other parts of the complaint are now before the Georgia Court of Appeals.

The News Lab-AJC investigation examined the campaigns of 45 Republicans, 41 Democrats, 14 Libertarians, and seven write-in candidates and reviewed hundreds of reports. It excluded those candidates who won their races and remain in office, failed to file any reports or, in two cases, died during their campaigns. It also excluded candidates for the Public Service Commission, who are elected statewide but represent districts.

Only 11 of the campaigns reviewed showed no problems. The investigation found that nearly two thirds of the campaigns had incorrect calculations in their filings. More than a third of campaigns stopped filing reports without properly closing out their accounts, cumulatively leaving hundreds of thousands of dollars unaccounted for.

For example, when then-state Rep. Terry Coleman ran for state Commissioner of Labor in 2010, he quickly raised more than $96,000 for the campaign. He spent more than $14,000 on the race but lost in the primary. Coleman, a one-time Speaker of the state House, then walked away and never filed another report disclosing his campaign’s finances.

That means Coleman, who had been fined twice in the past for campaign finance law violations, left more than $82,000 unaccounted for.

“The law says you’re supposed to continue to file until you have zero in your account,” said Stefan Ritter, executive secretary of the ethics commission.

Coleman did not respond to repeated attempts to reach him for comment.

Former Georgia Speaker of the House Terry Coleman ran unsuccessfully for state labor commissioner in 2010 and stopped filing campaign reports showing what happened to the money he raised for his campaign. AJC STAFF
Photo: Georgia News Lab

The investigation’s findings dovetail with AJC reporting in 2015 and a 2015 ethics commission audit that found significant problems in nearly 60 percent of randomly selected filings. Those included failure to file reports, late filings and improperly reported contributor information.

“If you are entrusting someone with public money, then you ought to be able to see that they can handle [it] in a proper manner,” said William Perry of Georgia Ethics Watchdogs.

Currently, the statute of limitations on campaign finance violations for four-year statewide offices, such as those reviewed as part of the News Lab-AJC investigation, is five years. That means many errors discovered in the investigation are beyond the reach of the ethics commission.

But the ethics commission can act on violations discovered after the statute of limitations has expired if the violations were intentionally concealed, not previously discoverable or if they are ongoing, such as continued failure to file required reports, according to Ritter.

The commission determines which cases to pursue. “Instructions that I’ve received are to try move into the future and not get too hung up in the past,” Ritter said. “But I also don’t want to leave a lot of responsibility or money owed to the state that hasn’t been addressed.”

The AJC-News Lab investigation found that during the period of the review, while the ethics commission routinely cited candidates for late- or non-filing of campaign reports, there were few instances in which it identified or addressed miscalculations, missing or inaccurate termination statements or other problems.

The commission has become more assertive in recent years. In 2015, the General Assembly nearly doubled the commission’s budget, allowing it to hire new staff. It also hired Ritter, a former senior assistant state attorney general, as executive director. Under his leadership, the commission has undertaken several high-profile investigations, including Oxendine’s.

Ritter says there is more to be done.

“I think we’re still talking three to five years before we really see substantial compliance improvement,” he said.

Angela Moore, a Democratic candidate for secretary of state in 2006 and 2010, showed discrepancies in her campaign reports filed with the state. SPECIAL
Photo: Georgia News Lab

Big discrepancies

A review of reports filed by Angela Moore, a Democratic candidate for Secretary of State in 2006 and 2010, found large discrepancies.

The last report filed by Moore’s 2006 campaign lists a negative balance of $118,845.16. The News Lab-AJC review found the balance appears to be more than $378,000.

The last report for Moore’s 2010 campaign lists a balance of $50,828.71. News Lab-AJC calculations suggest a balance of more than $60,000.

Moore’s last filings in each campaign reported no debt. The review found that the campaigns had combined debt of at least $40,000.

State law requires candidates to continue filing financial reports annually until the campaign is formally dissolved, at which point they must file a termination statement within 10 days. Both of Moore’s accounts are listed as “active” on the ethics website. There is no termination statement listed for either campaign.

The News Lab provided Moore, and all of the candidates interviewed for this story, with a detailed breakdown of calculations, as well as copies of their filings. Moore said she could not confirm the News Lab-AJC calculations because she could no longer find her old paperwork. “After a while, you kind of get rid of all of that stuff,” she said.

State law requires candidates to keep records for three years after the termination of the campaign, and there is no legal basis for candidates who have not terminated their accounts to discard records, according to Ritter.

Moore said she is still making payments toward what she said is approximately $4,000 in campaign debt. She said she did not remember if she reported those payments in her campaign filings and said she wasn’t sure if she had to report recent debt payments to the ethics commission.

“I’m not running,” she said. “After all these years, there’s nothing left to file.”

If candidates make campaign debt payments from their own pocket, they are required to report, according to Ritter. “If you don’t file those we could pursue those,” Ritter said. “And might.”

Karen Handel, pictured with her husband Steve, ran unsuccessfully for governor in 2010. Her campaign reports from the race showed an unreconciled campaign debt. HYOSUB SHIN / HSHIN@AJC.COM
Photo: Georgia News Lab

Unreconciled campaign debt

Former secretary of state Karen Handel reported a zero balance when she terminated her 2010 campaign for governor in 2015. News Lab-AJC calculations suggest that the balance should be more than $122,000.

Handel, who is now running for Congress in the 6th District, also reported having no debts at the end of her 2010 campaign. But campaign records show seemingly unresolved deferred payments totaling about $34,000. A deferred payment is an arrangement in which an individual or entity is allowed to pay for an expense at a future date.

Handel directed questions to Robert Highsmith, who served as legal counsel to the 2010 campaign. Highsmith did not delve into the details raised by the News Lab-AJC review of Handel’s reports. “I won’t quibble with the arithmetic,” he said.

Highsmith noted that the ethics commission had scrutinized Handel’s filings in response to complaints alleging the campaign had accepted excessive contributions, failed to properly account for an in-kind contribution, and failed to file a required report.

As part of an agreement worked out with the commission, the campaign refunded the excess contributions, filed amended reports regarding the in-kind contribution, paid a late filing fee, and filed the missing report. The ethics commission dismissed the complaints in 2013.

“This case was only, ever, always a case of technical accounting errors that were corrected to the unanimous satisfaction of the ethics commission,” he said.

Regarding the apparent indebtedness, Highsmith said it was an error caused by the ethics commission’s filing software when the campaign filed amended reports. But debt from deferred payments first appeared in the campaign’s original filings, not amendments. In its final reports the campaign listed zero debt without reporting any new debt payments.

Former state school superintendent John Barge, who ran for governor in 2014, did not close out his 2010 campaign account for superintendent until earlier this year. BRANT SANDERLIN /BSANDERLIN@AJC.COM
Photo: Brant Sanderlin/Georgia News Lab

Candidates don’t properly terminate accounts

The News Lab-AJC review also found problems in the campaign reports of former state school superintendent John Barge, who was elected superintendent in 2010 and ran for governor in 2014. Barge’s last campaign report for the superintendent’s race, filed in July 2013, shows a negative balance of $2,111.17. AJC-News Lab calculations indicate the balance was more than $25,000.

Barge said that he did not do his own reporting and referred questions to Joel Thornton, his former campaign manager.

Thornton acknowledged the campaign had leftover money from the superintendent’s race, but said they had transferred it to Barge’s 2014 gubernatorial race with permission of the donors, as allowed by law.

At the time of the News Lab-AJC review of Barge’s 2010 superintendent’s campaign filings, there was no indication of a transfer of funds to the governor’s race. Filings for Barge’s gubernatorial campaign, which was not part of the News Lab-AJC review, show a transfer of $12,311.76 in July 2014 from his superintendent’s campaign.

Thornton said he could not explain the discrepancy between the more than $12,000 transfer to the governor’s race and AJC-News Lab’s calculations of more than $25,000 remaining for the superintendent’s race. “I don’t know where that [larger] number comes from,” he said.

Thornton confirmed that he understood AJC-News Lab calculations, but was adamant that there was just over $12,000 left at the end of the 2010 race. “I don’t know why it came out that way [in the calculations],” he said. “We accounted for the money we took in, and we accounted for what we spent.”

Thornton acknowledged that the campaign had not filed the paperwork to close the superintendent’s race account. “One of the mistakes we did make was not filing a termination letter,” he said.

Thornton filed the report and closed out the 2010 campaign early this year, after being contacted by the News Lab.

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AJC staff writer James Salzer contributed to this report.