Judge rules for GOP groups in case tied to First Liberty
Two Republican groups linked to the scandal-ridden First Liberty Building & Loan did not violate campaign finance laws when they sought to influence Georgia elections, a state administrative hearings judge has ruled.
The state ethics commission accused the Georgia Republican Assembly and its political action committee of failing to disclose more than $180,000 of contributions and other violations.
But last week Judge Dominic Capraro ruled the groups did not violate the Georgia Government Transparency and Campaign Finance Act. If it stands, the ruling could make it easier for political committees to spend unlimited campaign cash without disclosing all of the information the state requires.
The state ethics commission can overrule the judge’s decision and could still seek to sanction the groups. Steven Knittel, the commission’s new executive director, told The Atlanta Journal-Constitution the agency is “reviewing the initial decision and weighing our options.”
But the judge’s ruling is a victory for the Georgia Republican Assembly, which has come under scrutiny since the collapse of First Liberty last year. An attorney for the GRA did not respond to a request for comment. The organization has said previously it did not violate state laws.
The U.S. Securities and Exchange Commission has accused First Liberty and founder Brant Frost IV of operating a $140 million Ponzi scheme and misusing investors’ funds. Among other things, the SEC said Frost used more than $570,000 of investor money to make campaign contributions.
An AJC investigation found the Frost family spent nearly $1.4 million in campaign contributions to build political support for far-right causes in Georgia and across the country. The Georgia Republican Assembly PAC, chaired by Frost’s son, received about $162,000 in family money, the AJC found.
Amid those allegations, the state ethics commission launched its own investigation of the Georgia Republican Assembly and its affiliated GRA-PAC. In December, the commission found probable cause that both groups had violated campaign finance laws by failing to disclose campaign contributions, failing to file reports and failing to register as an independent committee.
The last accusation is key to the commission’s case. GRA-PAC registered as a political action committee but not as an independent committee.
Under Georgia law, political action committees can raise money and contribute to candidates. But those contributions are subject to limits. Independent committees can raise and spend unlimited funds to support candidates and causes. They must disclose those contributions and who benefits, but cannot coordinate with candidates.
The ethics commission found the GRA-PAC had acted as an independent committee without properly registering or disclosing its activities. And it found the Georgia Republican Assembly also violated disclosure laws because it essentially controlled the PAC.
In court documents and a recent hearing, the Georgia Republican Assembly argued the GRA-PAC did not meet the definition of an independent committee. The group also argued that the GRA-PAC, which closed last year, was a separate entity controlled by Frost’s son.
In his decision, Capraro ruled that neither the Georgia Republican Assembly nor the GRA-PAC was required to register as an independent committee. He cited the state’s definition of an independent committee, which includes groups “other than a … political action committee.”
If it stands, the judge’s ruling could undermine long-standing practice in Georgia. Some political committees register as both a political action committee and an independent committee so they can undertake activities allowed by each type of group.
The ethics commission has 30 days to review the judge’s decision. It can accept, reject or modify it. If it rejects the ruling, the GRA can appeal to the Superior Court.