KEY PLAYERS
Nathan Deal
The governor faced complaints that he personally profited from his campaign’s aircraft rentals from a company he partly owned, that he illegally used state campaign funds for legal bills related to a federal ethics investigation when he was a member of Congress and that he accepted campaign contributions that exceeded limits. The state ethics commission cleared Deal of major ethics violations in July 2012 while finding he made “technical defects” in a series of personal financial and campaign finance reports. Deal agreed to pay fees totaling $3,350.
Holly LaBerge
Before her appointment as executive director of the state ethics commission in August 2011, she was a lobbyist for the state Public Defenders Standards Council. She reportedly said that the governor owed her after the commission cleared him of major ethics violations in July 2012. Last week, it was revealed that she wrote a memo and sent it to the state Attorney General’s Office that said that in the week before he settlement she had felt pressured by top-level aides to Deal to quickly and quietly bring an end to the case against the governor.
Chris Riley
LaBerge alleges in her memo that Riley, the chief of staff to Gov. Nathan Deal, sent a text to her personal phone while she was on vacation the week before the Deal case was settled that stated: “So since you are at the beach, with your feet in the sand and probably something cold to drink. Does this mean we can resolve all of DFG (Deal for Governor) issues by Monday?:)” Riley also was a founding member of HRPW Investments, a Gainesville partnership that owns the airplane Deal used in his 2010 campaign. Deal’s private business, Gainesville Salvage & Disposal, also was a co-owner of the plane through its subsidiary, North Georgia Aviation. Riley later dropped out of the partnership but was the pilot of the plane when it carried Deal throughout the state during the campaign.
Ryan Teague
LaBerge alleges in her memo that while on vacation she received a phone call from Teague, the governor’s chief counsel. She claims Teague said, “It was not in the agency’s best interest for these cases to go to a hearing … nor was it in their best political interest either.” According to the memo, Teague said the ethics commission might not recover the power to create its own regulations and interpret the law – a power taken away from the commission in 2012 – if the governor’s case was not settled without a public hearing. Teague also has been identified by the governor’s office as the person who called LaBerge in 2011 to see whether she would be interested in heading the commission before the position came open.
Stacey Kalberman
The former executive director of the state ethics commission was forced out of the position in June 2011 after then-Chairman Patrick Millsaps said a looming budget crisis for the commission had required him to cut her salary by 30 percent. Prior to that, Kalberman said she twice asked Millsaps to sign subpoenas involving the commission’s investigation into the complaints against Deal. Kalberman filed a whistleblower suit against the state in June 2012, and in April a jury ruled she was forced from her job for aggressively investigating Deal. Kalberman was awarded $1.15 million.
Sherilyn Streicker
Streicker was Kalberman’s top assistant and the investigator in the complaints against Deal. Her position was eliminated as a result of the commission’s financial difficulties, then ethics commission Chairman Patrick Millsaps said. Like Kalberman, Streicker filed a whistleblower suit against the state in June 2012. Two years later, the state settled the case, awarding her $1 million.
Elisabeth Murray-Obertein
Murray-Obertein was hired by LaBerge to serve as the ethics commission’s staff attorney. In sworn testimony leading up to Kalberman’s case, Murray-Obertein claimed that LaBerge intervened in Deal’s case and bragged that Deal owed her after his case was settled. Murray-Obertein was dismissed from her position in January after a Capitol police officer said he smelled alcohol on her on the morning of a workday. During Kalberman’s trial, she testified that LaBerge told her that commissioners felt Kalberman and Streicker “were delving into the (Deal) investigation too deeply.” Murray-Obertein threatened to sue the state. In June, the state settled with her for $477,500.
John Hair
Hair is a former information technology specialist with the ethics commission who claims he was fired for “frivolous” reasons after he refused to remove documents from Deal’s ethics case file. He said he “blew the whistle” to reclaim his reputation. Hair filed a whistleblower suit against the state in March. In June, the state agreed to pay him $410,000 to settle the suit.
State ethics commission director Holly LaBerge was taking a vacation from a job she’d held less than a year when a text message popped into her personal cellphone from Gov. Nathan Deal’s chief of staff.
“So, since you are at the beach, with your feet in the sand and probably something cold to drink. Does this mean we can resolve all the DFG (Deal for Governor) issues by Monday?:),” Chris Riley wrote in a message sent July 16, 2012, concluding his text with the emoticon for “smiley face.”
No one is smiling anymore. The seemingly innocent text led to a phone conversation that has rocked state government and threatened the credibility of top officials, including Attorney General Sam Olens. It has also restoked an election-year fire that the governor had hoped was all but extinguished over the commission’s handling of complaints against his 2010 campaign.
In a memo obtained by The Atlanta Journal-Constitution last week, LaBerge said Deal’s chief counsel pressured her to settle the cases without a hearing and threatened to withhold rule-making authority from the commission, a top priority for the agency.
The memo has raised pointed questions about the conduct of LaBerge, the governor’s staff and Olens, who received a copy of the memo but did not turn it over to former ethics staff members suing the state.
Here are five big questions the memo raises:
1. Was it proper for chief counsel Ryan Teague and Riley to contact LaBerge on an issue involving complaints against the governor’s campaign?
State law and personnel rules prohibit state employees from engaging in political activities at work or using state resources to aid campaigns. The personnel rules specifically prohibit employees from using “coercive political pressure.”
In her memo, LaBerge said she felt pressured by Teague to “make the complaints go away.” At the time, the commission was investigating a series of complaints against Deal’s 2010 campaign for governor, centering on how he raised and spent campaign funds, including how he paid attorneys fees and for air travel.
State and local officials have frequently been fined by the state ethics commission over the past 20 years for doing campaign work or using public resources for campaigns. Local officials are often accused of using their office or government resources to push sales-tax or bond votes. State staffers have been used to send out invitations to fundraisers, and they regularly post tweets with Twitter handles like “Stone4Georgia” or “Beachforsenate.”
“When you are in a state facility and on state time, you have a duty to the public,” said Teddy Lee, a former longtime director of the ethics commission. State employees “don’t always see it that way.”
Deal vigorously defends his staffers, saying they were merely contacting LaBerge to figure out the schedule for an upcoming hearing on his case. Aides said Deal was heading out of town and LaBerge had not returned messages from the governor’s campaign lawyer.
“It was two years that this had been going on. And they were simply urging the staff to proceed in a timely fashion rather than postpone it again,” Deal said.
Neither Riley nor Teague responded to requests for on-the-record comment.
This isn't the first time an issue has been raised regarding Riley, Deal's longtime aide. Congressional investigators in 2010 accused Deal, who had recently resigned his U.S. House seat, of violating ethics rules by using his office to protect a lucrative state program that earned his company big money.
The Atlanta Journal-Constitution found that Riley used congressional email to contact state officials to discuss the plans and to set appointments for Deal to meet with them.
2. Should LaBerge have turned over her memo earlier?
If LaBerge was concerned about political pressure from the governor’s staff, as she now claims, she could have notified Olens or even the U.S. attorney, who could have investigated them. Instead, she kept her concerns confined to a handful of commission members and did not disclose them to the news media.
LaBerge said she drafted the memo on July 17, 2012, after the commission's chairman, Kevin Abernethy, suggested she write up her contact with Teague and Riley.
Nine days later, the AJC sent LaBerge a request under the state Open Records Act for “access to and copies of all records, including interviews, audits, emails, faxes and any and all documents including case files” related to two cases against Deal.
LaBerge released thousands of pages of documents, but not her memo. Reporters from the AJC noticed some documents were missing. It wasn't until after the AJC asked Olens to intervene that LaBerge released thousands of additional pages. But again, the memo wasn't included.
“The memo should have been released in response to the submitted open records request,” said Hollie Manheimer, the executive director of the Georgia First Amendment Foundation. “Exceptions to Georgia’s general rule of releasing public information are very, very narrow, and none would have applied in response to this request.”
Olens enforces the Open Records Act, and the AJC has had to go to him on other occasions to get LaBerge’s agency to release public documents. And when the AJC asked for the memo from LaBerge last week, she referred the request to her private lawyer, Lee Parks.
LaBerge also kept the memo from Olens for about a year, depending on whose version of events you believe. LaBerge said she gave the memo to Olens’ staff in June 2013; Olens’ aides, however, said they did not receive it until August or September 2013.
The timing is critical. In June 2012, a month before LaBerge memorialized her contact with the governor’s staff, two former ethics commission employees filed whistleblower lawsuits against the state, alleging that they were pushed out of the agency for attempting to investigate the campaign complaints against Deal.
The lawsuits dragged on through months of motions and discovery. But LaBerge’s memo was not turned over to the two plaintiffs, former commission director Stacey Kalberman and her top deputy, Sherilyn Streicker.
3. What should Olens have done with the memo once he got it?
From the beginning, Olens was in a tight spot. As attorney general he was charged with enforcing open records laws. As the state’s top lawyer, he was also responsible for defending LaBerge and the commission against the whistleblower lawsuits.
Olens says the memo did not meet the demands for documents made by the plaintiffs’ lawyers and did not have to be turned over. Specifically, Olens said it didn’t meet Kalberman’s request for “correspondence” or for Streicker’s demand for documents “concerning the violation of any law, rule, or regulation.”
Many outside attorneys disagree.
Bob Wilson, a former DeKalb County district attorney who has served as a special prosecutor for the state, said the fact that LaBerge’s memo references text messages from Teague and Riley clearly meets the threshold of correspondence.
Olens’ argument, Wilson said, “will not hold water. It is ice that will not carry his weight. This document should have been produced.”
But Ben Easterlin, a partner at King & Spalding in Atlanta, said Olens made the right decision.
“Considering the context and the timing of the request and the specific wording of the request, I thought the memo would not be responsive to any of the discovery documents that were presented by the Kalberman and Streicker cases,” Easterlin said.
Although Olens determined the memo was not “correspondence,” LaBerge copied text messages from her phone and pasted them into the document. Whether Olens or his staff asked LaBerge to produce those texts separately is unknown.
Olens has said he can’t discuss the situation further because LaBerge is technically still his client and she and her attorney have refused to waive attorney-client privilege.
Ultimately, the Attorney General’s Office gave the memo to the AJC last week after it filed an Open Records Act request.
4. Should Olens or other state officials have called for an independent investigation, and should they do so now?
Olens said he shared the memo with his chief prosecutor, who concluded that no state laws had been broken.
State law allows the attorney general to designate a private lawyer as a special assistant attorney general to handle a specific case. This happens often with civil cases. Those lawyers, however, report to, and are paid by, the attorney general.
Could any attorney Olens chooses, supervises and pays be considered independent? Nothing in state law allows Olens to hand a case off to a local district attorney, for example, and unlike federal law, there is no mechanism in state law for appointing a special independent prosecutor.
There are, however, code sections in state law that allow the governor to appoint special prosecutors, as then-Gov. Sonny Perdue did when he hired Wilson and former Attorney General Mike Bowers to investigate the Atlanta Public Schools cheating scandal.
In this situation, however, would Deal — who steadfastly claims he and his office have done nothing wrong — want an independent investigation, and how could he ensure any investigator he named would be independent?
Finally, state law allows the General Assembly to also conduct investigations with the same power as the attorney general. The code section, however, does not spell out how the Legislature would decide to do that, and lawmakers don’t return to session until January.
Whether or not a new investigation is launched, investigations are already being conducted by the State Auditors Office, the state Inspector General and the FBI.
5. Who benefited from the memo staying hidden?
The memo’s concealment may have prevented Deal and/or his staff members from having to testify in the whistleblower lawsuits, including one that ultimately went to trial earlier this year.
The judge overseeing the case rejected a motion to have Deal or his staff testify in the cases. A crucial factor in the judge’s ruling was that the plaintiff had not demonstrated that the men engaged in any type of coercion.
Both former employees prevailed in their cases; Kalberman was awarded $1.15 million after a jury sided with her, and Streicker settled her case for $1 million. Two others former employees settled for nearly $500,000 each. But attorneys for the four are now calling foul.
Had it remained hidden, Deal’s re-election would have been helped by keeping a potentially embarrassing memo out of public view.
Legally, Olens and the state benefited from not having the issue come up in the trial. LaBerge and her attorney have said the memo would have helped the defense, not the plaintiffs.
Now that it’s become public, the memo could prove a springboard to reopen the court settlements and lead to legal complaints against Olens, his staff and/or Teague.
Deal and LaBerge also now say the argumentative nature of the phone call with Teague, as well as LaBerge’s conclusion that Teague threatened the agency, shows the governor’s office didn’t control her.
Teague, LaBerge wrote, wanted her to agree to a $1,500 settlement with no admission of violations. She said she had, the day before, offered Deal’s private attorney a $5,400 settlement. It was then that Teague allegedly said “it was not in the agency’s best interest” for the cases to go to a hearing.
Deal ultimately agreed to pay $3,350 in fees for technical defects in his disclosures.
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