Oxendine could face felony charge, Georgia ethics officials say

State ethics officials say former Georgia Insurance Commissioner John Oxendine may have committed a felony by loaning $237,000 that he raised for his unsuccessful 2010 gubernatorial campaign to his own law firm.

What’s unclear is whether ethics officials will wind up referring the case to Georgia Attorney General Sam Olens’ office for review.

State ethics officials raised the possibility of criminal behavior in their response to motions filed by Oxendine’s lawyer, Douglas Chalmers.

The Atlanta Journal-Constitution obtained the response through an Open Records Act request. It is part of a two-month-long back-and-forth between ethics commission staffers and Chalmers since additional allegations were made against Oxendine following a report in the AJC on the former commissioner's campaign finances.

The ethics commission is expected to hear arguments Dec. 16 in probably the biggest case before the panel since its staff was gutted and it hired Stefan Ritter, a senior assistant attorney general, to head the watchdog agency.

Ritter has taken a hard line against Oxendine, an expert campaign fundraiser and one-time front-runner in the 2010 gubernatorial race who lost in the Republican primary.

Chalmers said the ethics commission’s staff violated the Open Records Act by releasing its response to the AJC.

“The commission staff’s handling of this case continues to be entirely inappropriate and unfair to Mr. Oxendine,” Chalmers said. “In an attempt to divert attention away from the fact that their previous complaint is frivolous, misstates the law, and must be dismissed, the staff has apparently decided to try to change the subject, using innuendo and insinuation to make outrageous new allegations against him.”

Chalmers has argued that the state missed key deadlines to file new ethics complaints against the ex-insurance commissioner over how he raised and spent money during his failed 2010 campaign for governor.

Chalmers, a lawyer who frequently defends state politicians before the commission, said Oxendine neither collected excess contributions nor illegally spent money raised for races he never ran, as state ethics commission staffers contend. The attorney laid out his arguments in his motion asking the state ethics commission to dismiss a complaint filed against Oxendine over his handling of the 2010 race.

Ethics commission staffers rekindled a pending case against Oxendine earlier this year after the AJC reported that the former commissioner failed to return more than $500,000 worth of leftover contributions from his gubernatorial bid and spent money on Republican runoff and general election campaigns he never actually ran.

Oxendine led the polls throughout much of the 2010 Republican primary race before fading to fourth. He collected about $750,000 in contributions for the runoff and general elections.

Oxendine has been out of politics since leaving office in January 2011, but very little of the leftover money was ever returned to donors, as ethics officials said was required by law.

“He thought he was so far off the grid that nobody would notice,” said Rick Thompson, a former ethics commission executive secretary.

After the AJC report, ethics commission staffers filed an amended complaint against Oxendine, accusing him of improperly spending more than $208,000 raised for the runoff and general elections and accepting more than the legal limit in contributions from about 20 donors.

A month later, Oxendine filed an amended report, showing that he actually had more than $723,000 left over in his campaign account, including a previously undisclosed $237,000 worth of "investments" in his law firm. His latest amended campaign disclosure says all "investments" were returned in October.

“If true, this could be a felony as well as a violation of the Campaign Finance Act,” Ritter wrote in his response to Chalmers’ motion. “There are undisputable reasons why Mr. Oxendine would now like to stop further investigation.”

Under state law, candidates can’t use campaign contributions for personal enrichment or use.

Ethics commission officials say Oxendine has responded to the investigation by attacking the commission’s staff and authority.

The new allegations filed in September were tacked onto another Oxendine campaign finance case that dates to 2009. The former insurance commissioner has called that case a long-running waste of taxpayer money. Ethics commission staffers acknowledge that part of the delay in finishing the 2009 case was that the commission's staff went through several years of upheaval. But they said Oxendine's lawyers also delayed the case.

They also said Oxendine has so far refused to turn over campaign bank records that might answer some of the questions ethics commission staff want answered. And they said Chalmers’ argument that the statute of limitations has run out on the new allegations is bogus.