Groups accused of not disclosing Abrams aid sue over ethics probe

Credit: TNS

Credit: TNS

A voter registration group that Stacey Abrams founded and a separate but affiliated organization have filed a federal lawsuit in a move that could end a state ethics commission probe into whether they aided the Democrat’s run for governor in 2018 without disclosing their role.

The New Georgia Project and the New Georgia Project Action Fund filed suit Wednesday, saying that the commission is using an unconstitutionally broad definition of a “campaign fund” to allege they raised $4 million and spent $3 million before the 2018 election and illegally failed to disclose it.

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

A month ago, the commission decided there was probable cause to believe the two nonprofits raised and spent millions of dollars to aid Abrams’ unsuccessful 2018 gubernatorial bid without disclosing it.

Abrams is again facing off against her 2018 rival, Gov. Brian Kemp, in the November general election.

The case 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.

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The lawsuit urges the court to declare the state’s definitions of “campaign committee” and “independent committees” under the campaign finance act unconstitutional. Doing so would likely lead to the case against the groups being dropped and could impact other cases.

“Permitting the commission’s investigation of plaintiffs and sanctioning the act’s overbroad definitions of ‘campaign committee’ and ‘independent committee’ would have sweeping consequences, chilling core First Amendment activity for nonprofit organizations by subjecting them to burdensome committee registration and disclosure rules — regardless of their primary purpose,” the lawsuit says.

David Emadi, the commission’s executive secretary, was critical of the groups’ filing.

“First the New Georgia Project gets caught spending millions of dollars in dark, unregulated money to illegally influence the 2018 and 2019 elections,” he told The Atlanta Journal-Constitution when contacted about the lawsuit. “Now they want to literally overturn Georgia laws which require super PACs to register and disclose to the public how they are funded and spend their millions of dollars actually influencing our elections.”

The groups’ lawyer, Aria C. Branch, told the commission last month that the nonprofits’ donations were not earmarked for political activity and were used for operating expenses. Political canvassing that the groups did 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.

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.

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.

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 last month was only the first step in the process.

Unless blocked by the courts, the case next 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.

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.