Ethics case against former Senate leader dropped

Former state Sen. Don Balfour, right, with attorney Robert Highsmith, in 2012 heads down the steps to the Senate mezzanine meeting room for an ethics hearing. BOB ANDRES / BANDRES@AJC.COM

But where’s the $630,000?

Former longtime Georgia Senate leader Don Balfour left office in 2015 with about $630,000 in his campaign bank account, but he stopped filing the mandatory annual disclosure reports detailing what he did with the money.

Three years later, he was accused of bankrolling a smear campaign against a former colleague, Sen. David Shafer, who was running in the Republican runoff for lieutenant governor against Geoff Duncan.

Balfour strongly denied the accusation after an ethics complaint was filed against him, and the commission recently dismissed the case — in part because it said it can’t legally track where the $630,000 in leftover campaign money went.

Because of what he called a "loophole” in state ethics laws, David Emadi, executive secretary of the commission, said the panel couldn’t take legal action against Balfour unless it did so within a year of him not filing the mandatory report.

By the time the state started investigating, it was too late. By law, Balfour’s campaign didn’t have to maintain bank records more than three years after he left office. The $630,000 — much of it raised from statehouse lobbyists and special interests — was no longer in the campaign account, Emadi said.

“Unfortunately, despite our efforts to analyze this case from every possible angle to save the complaint and the investigation, there is no legal avenue to do so and the case has been dismissed,” Emadi said in a statement.

“It is my hope to work with the Legislature in the coming session to correct this issue so that no one in the future can use this loophole to potentially move campaign money out of their account in an illegal and improper manner without any legal repercussion by the commission.”

Douglas Chalmers, Balfour’s attorney on the case, declined to comment. Attempts to reach Balfour, a Snellville Republican and longtime chairman of the powerful Senate Rules Committee, for comment were unsuccessful.

William Perry, founder of Georgia Ethics Watchdogs, who filed the complaint against Balfour, called the commission’s decision "very shocking.

“This is a get-out-of-jail-free card,” Perry said. “You can avoid filing and take the money and run. This is a very cowardly decision (by the commission).”

Emadi said he pushed for legislation this year to fix the loophole — the statute of limitations is three years for other alleged ethics violations by lawmakers — but it never made it through the General Assembly.

The case points to a long-standing issue for the state ethics commission, which has a limited staff to keep tabs on political spending by thousands of candidates, former lawmakers, political groups and lobbyists who are required to file reports.

Under state law, legislative candidates can raise and spend money to win or maintain their office. Once they leave, leftover money can be returned to donors, given to other campaigns or to non-profits.

Former lawmakers must file campaign disclosure reports until all the money in their accounts is dispersed and they file termination reports.

Fresh off winning re-election in 2007, then-Gov. Sonny Perdue was among the first in Georgia to roll leftover money into a political action committee, which continued raising money from Capitol interests during his second term even though he couldn’t legally run for a third term.

One of the most highly publicized recent cases involved former 2010 Republican gubernatorial frontrunner John Oxendine, the state’s longtime insurance commissioner, who reported having no leftover money in his campaign account in January 2015. After an Atlanta Journal-Constitution investigation that led to new ethics charges against Oxendine, he filed an amended report showing more than $700,000.

The commission last year found probable cause that Oxendine had broken campaign finance laws, saying he illegally spent campaign donations on luxury car leases, child care bills, an athletic club membership and a down payment on a $965,000 house.

Oxendine’s case is unresolved and awaiting a state administrative hearing. Chalmers also represents Oxendine.

The Balfour case began when Perry filed complaints against a group funding negative campaign advertisements targeting Shafer. Perry accused Balfour — who was a rival of Shafer’s when they served together — of bankrolling the effort.

Shafer lost the runoff to Duncan. Balfour told the AJC at the time he didn’t know anything about the group and threatened to sue Perry. He also said his campaign would file the reports. The last one he filed was in January 2016.

“If my people haven’t filed, then I need to file,” he said. The commission’s web site doesn’t show he did, and says he owes $2,750 in late fees.

Perry said, “Ignorance of the law is never a defense unless you are in the Legislature.”

The ethics watchdog said Georgia laws have always made it clear that legislators and candidates have to show what they do with the money they raise. “Now, we can no longer say that,” he added.