Oxendine postponing refunds of campaign cash
By JIM WALLS
Jan. 18, 2011 — Under Georgia law, candidates must give back campaign donations for an election they don’t ultimately qualify for.
Someone who loses a party primary, the law says, must refund contributions intended for a runoff or general election.
It just doesn’t say when.
That provision — some might call it a loophole — may leave John Oxendine with a half-million-dollar legal defense fund to fight pending ethics charges. But Oxendine’s access to that money relies on a somewhat tenuous interpretation of Georgia’s campaign finance law.
Oxendine, who ran fourth in last year’s GOP primary for governor, collected $692,000 for use in a potential runoff and in the November election. He’s refunded some of those donations and has about $560,000 left in the bank.
“We hope to give every penny back,” he said last week.
But the Ox, who just stepped down after 16 years as Georgia’s insurance commissioner, is holding off in case he needs that money to pay legal fees to fight the ethics case. The state ethics commission (recently renamed the Government Transparency and Campaign Finance Commission) is investigating his campaign’s acceptance in 2008 of $120,000 that originated with two Rome-based insurance companies regulated by his office.
“To the extent that there is debt that is left over from the primary, you’re allowed to use funds [raised for] the runoff and general election to retire the debt,” said Oxendine’s lawyer, Stefan Passantino.
That debt would include future legal fees because the ethics case pertains to matters occurring while Oxendine was still a candidate, Passantino said.
The Ethics in Government Act is not specific on that point.
Ex-candidates, it says, may spend leftover contributions for “any prior campaign obligations incurred as a candidate.” Oxendine was no longer a candidate after July 20, but lawyers for the ethics commission believe subsequent campaign-related legal fees could still be paid with those contributions.
Even if that’s the case, Oxendine must abide by limits on campaign contributions from a single source.
Virtually all of the money that he raised for the runoff and general election came from his most generous donors, who had already given the maximum $6,100 for the primary. Spending that money now instead of issuing refunds makes a mockery, as they say, of contribution limits.
Oxendine’s campaign since September has paid more than $20,000 in legal fees related to the ethics case, plus thousands more for expenses that include phone bills, technology costs and membership dues for the Commerce Club.
There’s not enough cash left in the campaign account to fully refund remaining contributions; the deficit is such that the donors would get back no more than 91 cents on the dollar.
Common Cause Georgia, the good-government advocacy group, raised this issue last fall and called for all unsuccessful candidates to immediately return donations for elections when they weren’t on the ballot.
“It’s clearly the law, and the law should be obeyed by the candidates,” Common Cause director William Perry said last week. Campaign donors “need the confidence that their money isn’t being misused, that it’s given for a specific election and should be used only for that election. It’s important for the integrity of the system.”
It’s unclear whether the ethics case will be resolved anytime soon. The commission chose to proceed first with charges against the insurance companies that donated the $120,000; their attorneys have fought to dismiss or delay the proceedings and show every sign that they’ll appeal to the courts if the commission refuses.
Oxendine, on the other hand, blames the ethics commission for failing to wrap up its investigation of his campaign finances.
“We’re not the ones dragging this out,” he said. “They have no evidence. They have nothing.”