Former Georgia Insurance Commissioner and Republican gubernatorial frontrunner John Oxendine has now been fighting ethics complaints for almost a decade. Curtis Compton ccompton@ajc.com

Oxendine ethics case approaches end of decade-long journey

A decade ago, Georgia Insurance Commissioner John Oxendine led the polls in a crowded Republican race for governor, an office to which he’d long aspired.

That same year, 2009, Oxendine’s campaign was hit with an ethics complaint alleging that he’d taken illegal campaign contributions. It didn’t hurt him in the polls, but he nonetheless went on to lose the Republican primary. And ethics charges have dogged him ever since.

The longest-running ethics saga in Georgia history may finally be nearing at least the beginning of the end next week, but it’s unclear whether that’s good or bad news for one of the state’s most colorful politicians of the past quarter century.

Oxendine has been fighting ethics charges sparked by two Atlanta Journal-Constitution investigations through numerous legal hearings, an at-times dysfunctional Georgia Government Transparency & Campaign Finance Commission and the two terms of the man he failed to beat in the 2010 primary for governor, Nathan Deal.

Most recently Oxendine was back in the news when the AJC reported that he donated $14,000 to Jim Beck just before the newly elected insurance commissioner was indicted on charges of stealing $2 million from his former employer, in part to fund his campaign for office last year. Oxendine, an AJC review found, was Beck’s biggest donor between last year’s GOP primary and his indictment.

Next week Oxendine is finally expected to have his day before the ethics commission on charges he illegally diverted campaign money for his personal use, that he spent money he raised from donors for races he never ran, and that he collected contributions well over the legal limit from a Georgia insurer.

For Oxendine, and the commission’s staff, the finale has been a long time coming.

“I am trying to finish this before I vest in the pension system,” said Robert Lane, a commission lawyer who has headed the investigation and prosecution of the case for several years. State employees become eligible after 10 years, but Lane hasn’t been with the commission that long.

Oxendine and his lawyer, Doug Chalmers — who also represents Beck in his criminal case — declined to comment for this story. However, Oxendine has, in the past, called the charges frivolous.

“After wasting hundreds of thousands of taxpayer dollars, they have refused to produce one shred of evidence or even allow the case to appear before a judge,” he said in a 2015 statement. “If they never take the case to a judge, they never have the embarrassment of losing.”

But William Perry of Georgia Ethics Watchdogs said the case points to a hole in the state’s campaign finance laws. He said Oxendine has taken unusual advantage of state law by spending hundreds of thousands of dollars in leftover funds raised for his failed 2010 campaign on lawyers to stall charges brought against him.

“It shows the flaw in the system that he has been able to prolong this so long using campaign funds,” Perry said.

If the commission finds probable cause to move ahead with the complaints next week, it’s unclear whether it will be responsible for prosecuting the case. Commission staffers have said that Oxendine’s case may wind up being handled by a district attorney or the U.S. Attorney’s Office, rather than their agency, which oversees laws governing campaign finance and lobbying.

Political rise and fall

Oxendine, the son of a longtime Gwinnett County judge, was a fairly recent Republican convert when he signed up in 1994 to challenge then-Insurance Commissioner Tim Ryles. Ryles, a Democrat, had angered insurance companies by refusing to grant auto insurance rate hikes after years of skyrocketing premiums.

Oxendine saw an opening to challenge Ryles as a Republican. As it turns out, 1994 was a year of Republican revolution, led by Georgia Congressman Newt Gingrich. Oxendine and an unknown Columbia County educator named Linda Schrenko benefited, ousting incumbent Democrats at a time when that party ran state government.

Schrenko, who was elected state school superintendent, went to federal prison in 2006 after a failed gubernatorial bid and a bungled scheme to pilfer federal grants meant to provide software and other services to deaf and honors students.

Oxendine reversed Ryles’ ban on rate hikes from insurance companies.

But he also cultivated a pro-consumer, populist image, showing an awareness of how to get publicity and going after insurers when he decided they’d gotten out of line. He lobbied against attempts to flip a state law mandating that auto insurers first get the commissioner’s approval before raising rates. He succeeded until 2008, when state legislators reversed the law, making it easier for companies to pump up premiums.

Always accessible to the media and consistently a good quote, Oxendine was frequently mentioned as a likely candidate for higher office. But the headlines he attracted weren’t always positive.

In 2001 he was accused of using the blue lights and siren on his state car to help him quickly get to civic club meetings, ribbon-cuttings and dinner engagements. State investigators said “repeated misuses” of emergency equipment were found during an investigation after an accident in which Oxendine wrecked a state car. He had the blue lights and siren removed from his vehicles.

He then faced criticism for having his agency buy another new car — with $6,300 in upgrades — after the state’s top purchasing agent turned down his request during a state budget crunch.

Oxendine’s re-election campaigns in 1998, 2002 and 2006 were heavily funded by the people his office regulated, insurance and small loan executives, and those who provided services to those businesses. That came in handy in his 2010 race for governor, when he was relatively flush with cash from industry officials he had worked with for years.

While polls suggested the relatively well-known Oxendine was the front-runner in the GOP field, he wound up coming in a disappointing fourth in the primary. Deal won a primary runoff and later the general election.

In his last full day in office — after 16 years on the job — Oxendine issued himself several licenses to sell insurance and adjust claims without taking the mandatory classes or licensing tests almost everybody else is required to take.

Ethics troubles

Oxendine’s campaign faced ethics questions even before his last election.

In May 2009, an AJC investigation reported that two Georgia insurance companies with the same boss funneled $120,000 — about 10 times the legal limit — to Oxendine’s campaign. Oxendine said he would return the money, but a complaint was filed against him and the companies with the ethics commission.

That ethics complaint against the insurers accused of giving the money to Oxendine was dismissed in 2014 because the ethics commission’s staff had made so little progress on it, in part because of staff turnover and seemingly endless drama at the agency.

But the commission didn’t dismiss charges against Oxendine, the recipient of the donations.

The case remained largely dormant until the AJC reported in 2015 that he never returned more than $500,000 worth of leftover contributions from his gubernatorial bid and spent money raised for Republican runoff and general election campaigns that he never ran because he lost in the GOP primary.

Oxendine amended his reports in October 2015 to show more than $700,000 left over, including $237,000 in loans to his law firm.

Following the AJC report, ethics commission staffers filed an amended complaint, 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 19 donors.

In one of the few comments he’s made on the case, Oxendine declared the charges “wild and unsubstantiated.”

“In order to cover up and deflect from their previous acts of incompetence and wasteful government spending, they are now attempting to add new frivolous allegations in a case that has remained open for an unprecedented seven years without any evidence of wrongdoing whatsoever being presented on their part,” he said at the time.

The commission dismissed many of the new charges that December, after Chalmers argued that the statute of limitations had run out on charges involving the 2010 campaign.

But the commission kept alive the allegations that he took illegal contributions from the insurance companies and spent money raised for races he never ran, and Georgia courts declined to dismiss the case in June.

Commission officials hinted in 2016 that they might go after Oxendine on the late-reported loans to his law firm in 2013 and 2014. Oxendine sought to quash the subpoena for bank records, but the courts sided with the state. While his campaign reports note the repayment of the loan from his law firm, others said the campaign money was used to put a down payment on a house.

The commission filed a new complaint in 2017 alleging Oxendine illegally used campaign money for personal gain. Under Georgia law, campaign money can only be used to run for or maintain office. Any leftover money, once someone is out of office, is supposed to be returned to donors or given to other campaigns or nonprofits. Oxendine filed a lawsuit against the commission, saying the law it was using to file the complaint was unconstitutionally vague.

Oxendine has spent a large chunk of his leftover bankroll on attorneys fees, which Chalmers said is legal. Oxendine has also used leftover money to give to political candidates, such as Beck.

Campaign records show Oxendine paid to host a fundraiser for Beck in June 2018, after the candidate had won the Republican primary for insurance commissioner. He spent roughly $15,000 in support of Beck’s successful campaign for his old office, and then he chipped in $14,000 a few days before the commissioner was indicted. Almost all of the $29,000 came out of the money Oxendine had left over in his gubernatorial campaign account.

When Oxendine last filed a campaign disclosure in January, the more than $700,000 in leftover funds had dwindled to $281,000. The commission could seek to have the courts freeze what’s left in the account. The federal government seized $80,000 from Beck’s account the day he was indicted. Beck’s lawyers are contesting the seizure.

Perry said the case is an important one because the state doesn’t want to set a precedent of allowing politicians to live off their campaign war chests.

Sara Henderson of the ethics watchdog group Common Cause Georgia called it “a prime example of why citizens no longer have faith in their government.”

“The extent of time by which this case was allowed to drag on only deepens apathy because citizens feel as though if this were just a regular Georgian, justice would have been swift and definitive,” Henderson said. “I seriously doubt a single contributor to the Oxendine campaign expected their generosity to be turned into a personal account for the former candidate.”

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