Georgia ethics panel says groups should have disclosed spending on Abrams

Credit: Stephen B. Morton / AJC

Credit: Stephen B. Morton / AJC

The state ethics commission on Monday decided there’s probable cause to believe nonprofits raised and spent possibly millions of dollars to back Stacey Abrams’ unsuccessful 2018 gubernatorial bid without disclosing it.

Under Georgia law, groups advocating for candidates must disclose contributions and expenditures on a regular basis.

The case heard Monday is the biggest so far filed by the commission’s staff in a long-running investigation into Abrams and groups who supported her in 2018, and the ethics panel’s initial decision comes a little more than three months before the general election, when Abrams will again face off against Gov. Brian Kemp.

The ethics complaint was filed against the New Georgia Project, a voter registration group that Abrams founded, and what the commission called a separate but affiliated organization, the New Georgia Project Action Fund. It says the groups raised $4 million and spent $3 million before the 2018 election and should have registered as independent political committees and publicly disclosed the money.

The commission staff says the groups hired canvassers, passed out literature, promoted Abrams’ candidacy — and the candidacy of other candidates — and solicited contributions. They also said the groups raised and spent money to support the push to bring MARTA to Gwinnett County in 2019.

The commission’s decision Monday was the first step in the process. It now heads to an administrative law hearing, after which a judge will make a recommendation. The commission can accept the recommendation and impose sanctions or hold a hearing if it disagrees with the judge’s findings. If the final ruling goes against the groups, it could produce the largest ethics fine in state history, based on the amounts involved.

David Emadi, the panel’s executive secretary, said: “I’m pleased with the commission’s vote that found what staff has known to be true for a while, that this group spent millions in dark money to influence Georgia voters without disclosing who was bankrolling them.

“Georgia citizens deserve to know who is attempting to tip the scales in their elections, and they were deprived of that right in 2018 and 2019 to the tune of millions of dollars. We’re glad that evidence has finally come to light for the public to see.”

Aklima Khondoker, the chief legal officer for the New Georgia Project Action Fund, said: “Our organizations are being targeted for alleged transparency concerns with nothing but old tweets for evidence.

“Meanwhile, allies of Brian Kemp created so-called leadership committees that can accept unlimited amounts from secret sources. In short, we’re not against accountability, but we are against hypocrisy.”

The groups’ lawyer, Aria C. Branch, told the commission that the nonprofits’ donations were not earmarked for political activity and were used for operating expenses. The canvassing, they said, was done as a subcontractor for another pro-Abrams political committee and not subject to disclosure by the New Georgia Project Action Fund.

Those expenditures were disclosed by the political committee that hired the New Georgia Project Action Fund.

“There is no hiding of money here,” Branch told the commission.

As nonprofits, she said, the primary purpose of the New Georgia Project and the New Georgia Project Action Fund is not influencing election outcomes and the groups are not required to file state paperwork to report contributions and expenditures.

She said the New Georgia Project has registered more than 500,000 new voters since 2014.

But the commission’s lawyer and commission members said if the groups spent money promoting Abrams and other Democratic candidates, it’s irrelevant what their “primary purpose” is: They still have to file disclosures.

Joe Cusack, the commission’s lawyer handling the case, showed photos of door hangers the canvassers handed out in 2018 promoting candidates. The door hangers said they were paid for by the New Georgia Project Action Fund. He said canvassers had scripts they were supposed to read to voters asking them to support Abrams and other candidates.

Commission member Rick Thompson said the group’s lack of disclosure sounded like it was part of a “shell game.”

Abrams supporters have called the investigation a “fishing expedition” promoted by Kemp backers.

The investigation began in 2019 after the commission hired Emadi, an aggressive Douglas County prosecutor, to become the commission’s executive secretary. The Atlanta Journal-Constitution reported at the time that Emadi had been a Kemp donor. He quickly began issuing subpoenas seeking bank records and other documents from Abrams’ campaign and affiliated groups.

While Emadi was accused of partisanship, many of the questions he raised came out of campaign report audits that commission staffers did well before he took office. Staffers had accused the previous executive director of sitting on the findings.

The commission under Emadi began looking into whether Abrams’ campaign illegally coordinated its efforts with nonprofits supporting her bid for governor. Georgia law prohibits independent groups from coordinating with candidates.

Abrams’ camp says it has provided thousands of documents to the commission and that the panel was seeking records that either didn’t exist or should have no bearing on its case.

One of the groups involved in the investigation, Gente4Abrams (People for Abrams), was fined $50,000 by the state ethics commission in 2020 for failing to report what it spent to help her win the Democratic primary in 2018.

Gente4Abrams (People for Abrams) spent $240,000 for canvassing, social media posts, and print and radio advertising to help Abrams win the primary but didn’t report what it spent or where it got the money to pay for those efforts, the commission said.

The group later registered with the state and reported spending about $685,000 more to help the Democrat in her unsuccessful general election campaign against Kemp.

What’s next:

The case now heads to an administrative law hearing, after which a judge will make a recommendation.

The commission can accept the judge’s recommendation or reject it and hold a hearing before ruling on the case. If the commission finds the groups violated disclosure laws, it will fine them and require that they file reports. Given the amounts involved, any ethics fine would potentially be the largest one in state history.