Ethics Commission fines 2 groups linked to First Liberty nearly $150,000

The State Ethics Commission on Wednesday fined two Republican groups linked to the defunct First Liberty Building & Loan nearly $150,000 for violating campaign finance laws.

The commission unanimously ruled that the Georgia Republican Assembly and its affiliated political action committee failed to properly disclose more than $187,000 in spending to support numerous candidates in recent years. It also ruled the groups failed to register as independent political committees and failed to file required disclosure reports.

It assessed each group $74,875 in civil penalties and late fees for failing to file disclosure reports.

Catherine Bernard, an attorney for the Georgia Republican Assembly, said the group did nothing wrong and the commission overstepped its authority. She told the commission the “crippling sanctions” threatened to undermine the rights of her group and others to participate in political debates.

“We do believe that (penalty) would have a significant chilling effect on volunteer political groups,” Bernard said.

Steve Knittel, the commission’s executive director, said the fines are appropriate because the groups partially — but not completely — disclosed their spending.

“If you’re going to participate in the political process, that’s great. We want people to participate in that,” Knittel said. “But you also need to not try to hide from public eyes as to who you’re supporting.”

The fine is a significant penalty from the commission. The record is a $300,000 fine imposed last year on a voting rights group that was founded by Democrat Stacey Abrams.

The case stems from last summer’s collapse of Newnan-based First Liberty. Federal authorities accused First Liberty founder Brant Frost IV of operating a $140 million Ponzi scheme, using company money for family vacations, campaign 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.

The State Ethics Commission launched its own investigation and later accused the GRA-PAC and the Georgia Republican Assembly, of numerous violations of campaign finance laws.

Under state 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. But they must disclose those contributions and who benefits and they cannot coordinate with candidates.

The commission found that GRA-PAC acted as an independent committee without properly registering or disclosing its activities, including which candidates benefited from its spending. It found the Georgia Republican Assembly also violated the requirements because it essentially controlled the GRA-PAC, which closed last year.

The Georgia Republican Assembly argued that neither group met the state’s definition of an independent committee. It also argued the GRA-PAC was a separate entity controlled by Frost’s son.

In July, the administrative law judge sided with the GRA in a preliminary ruling. But the State Ethics Commission overruled the judge last month.