Ethics commission overrules judge, setting up possible fine for GOP groups

The State Ethics Commission on Monday overruled an administrative law judge who found that two Republican groups with ties to the defunct First Liberty Building & Loan did not violate campaign finance laws.

The commission now appears poised to rule next month that the Georgia Republican Assembly and its affiliated political action committee failed to property disclose more than $187,000 in spending to support numerous candidates in recent years. The groups also are charged with failing to register as an independent committee and failing to file required disclosure reports.

If it finds the groups violated state law, the commission also will determine what penalties they should pay. In recent court documents, the commission sought $45,000 in civil penalties for the alleged violations.

Monday’s decision is the latest twist in a case that stems from last year’s collapse of First Liberty. Federal authorities say First Liberty founder Brant Frost IV ran a $140 million Ponzi scheme, funneling investors’ money into family vacations, political contributions and other personal uses.

The GRA PAC, chaired by Frost’s son, Brant Frost V, received about $162,000 in Frost family money, an investigation by The Atlanta Journal-Constitution found.

A person walks into the store next to First Liberty Building & Loan in downtown Newnan last year. (Arvin Temkar/AJC)

Last year, the State Ethics Commission charged the Georgia Republican Assembly and its PAC with numerous violations stemming from their failure to register as independent political committees under state law. Independent committees can spend unlimited sums to support candidates and causes. But those expenditures cannot be coordinated with the candidates, and the committees must disclose which candidates benefit from their expenditures.

GRA PAC was registered as a political action committee, but not as an independent committee. PACs can only contribute money to candidates, and those contributions are subject to limits.

The commission has long required groups that contribute to candidates and spend independently of them to register as both political action committees and as independent committees. The commission says the GRA PAC spent big money backing a variety of candidates but failed to disclose which candidates benefited from its spending. It also says the parent group Georgia Republican Assembly violated disclosure laws because it essentially controlled the PAC.

In May, the case went to a hearing before Administrative Law Judge Dominic Capraro. These judges preside over disputes between people and state agencies. Sometimes their rulings are final. But in some cases, the rulings act as recommendations to a state agency.

In a preliminary ruling last month, the judge found that neither group had violated state law. He said the GRA and its PAC did not meet the state’s definition of an independent committee.

Under state law, the ethics commission was not bound by the judge’s ruling. On Monday, Senior Assistant Attorney General Elizabeth Young argued the judge got it wrong. If left unchallenged, she said the ruling would clear the way for other groups to avoid fully reporting their expenditures and would create “an open season for dark money in the state of Georgia.”

GRA attorney Catherine Bernard urged the ethics commission to uphold the judge’s ruling. She said the GRA PAC disclosed its spending as it believed the law required. And she said the law should be clarified by the General Assembly.