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Loophole C: Credit card omissions just fine, Deal case shows


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Nov. 19, 2015 — Three years ago, Gov. Nathan Deal’s campaign admitted that an American Express payment didn’t add up because it included a top aide’s personal expenses. The aide reimbursed the $1,185, a campaign lawyer said.

But what about the $69,000 in unexplained spending in 158 other credit card payments by Deal’s campaigns? Did they include personal expenses? No one’s saying.

The Georgia Campaign Finance Commission in 2011 found 21 other credit card payments that didn’t match the total of the expenses that Deal’s campaign listed for them. Most payments exceeded the sum of the items, while several were less; overall, $9,100 in spending was unaccounted for.

I found a similar pattern of discrepancies recently while reviewing Deal’s federal campaign filings as a congressman. From 1998 to 2009, 137 credit card payments didn’t match the sum of his campaign-related expenses. Those discrepancies left no clues to the spending of $60,493.

All told, the mystery spending by both campaign committees fell just short of $70,000. As Major T.J. “King” Kong once said, “a fella could have a pretty good weekend in Vegas” with that.

The fact that Deal never came clean underscores a gaping loophole in Georgia’s ethics enforcement: Candidates are required to name the end recipient of a credit card payment or a reimbursement for out-of-pocket expenses, but the commission rarely does anything to those who fail to do so. (That may change soon, though.)

Allowing campaigns to spend funds without disclosure is an invitation for someone to use the money for personal expenses. It’s just human nature.

The commission generally only enforces these rules if a complaint is filed. And, as Deal’s ethics cases show, sometimes not even then.

The commission, following up on complaints about Deal’s 2010 run for governor, repeatedly called on the campaign to explain the credit card discrepancies. Its executive secretary asked in 2011 and its vice chairman requested the credit card statements later that year. Staff attorney Elisabeth Murray-Obertein kept asking until the case was settled in July 2012.

Ultimately, Deal’s campaign responded regarding one bill. In a May 2012 letter, attorney Ben Vinson confirmed it had “accidentally” paid $1,071 of campaign manager Chris Riley’s personal expenses.

Riley, now the governor’s chief of staff, reimbursed the campaign when the error was discovered, Vinson wrote, but the refund was “inadvertently” left off Deal’s disclosures. Riley wrote a second check for $114 to cover another unexplained discrepancy, Vinson wrote.

The attorney promised Deal’s disclosures would be amended to add the reimbursements. They never were,

Two months later, Deal paid a $50 administrative fee for each of the 21 other bills for which payments and expenses didn’t match, plus $50 more for each time the campaign failed to identify the holder of the credit card.

The omissions were treated as “technical defects,” which Deal could have cured without penalty by reporting the missing information. Deal fixed other defects that way, but not those involving the mystery charges.

In a last-minute filing in July 2012, campaign attorney Randy Evans said Deal’s campaign “made all possible efforts to cure, through amended filings or otherwise, the actual technical defects” alleged by the commission.

The amendments, though, added no details regarding the unexplained spending. It’s unclear why, since American Express or MasterCard presumably could have provided copies of any missing statements.

Evans argued the revised disclosures were good enough, or “substantially compliant” in commission jargon, since at least 90 percent of each filing was free of defects. A commission auditor reviewed the revised disclosures and agreed.

So, by extension, a campaign need only disclose 90 percent of its spending to comply with the law. Current management at the commission would wholeheartedly disagree, but that’s how they rolled in 2012.

Deal’s campaign filings generally have been more thorough since he took office. About half of the credit card payments still haven’t identified the cardholder, though, and one was missing about $1,500 of itemized expenses.

I’ve tried off and on since 2012 to get the campaign to explain the discrepancies, including several times in the last week, with no result.

To sum up: Deal’s campaign-related expenses charged on credit cards have pretty much never added up to the amounts paid. Some $69,593 in spending remains unaccounted for. The only explanation offered: Personal expenses were paid accidentally.

While most of these issues were resolved in the past, they illuminate obstacles that we still face today.

While the commission doesn’t routinely check whether campaign spending is properly explained, I do. I routinely ask legislators why they haven’t fully itemized their spending. I don’t often get a reply, but I know they’re responding when I see they’ve revised old disclosures.

House Majority Leader Jon Burns, for instance, recently itemized expenses for more than $25,000 in credit card payments after I emailed him about them. He left about $10,700 from 2011 and earlier (beyond the reach of the statute of limitations) unexplained.

Rep. Tom Rice, who’d collected more than $31,000 since 2006 in unitemized reimbursements, never called me back but amended earlier disclosures to provide the missing details. They included $3,950 to pay himself back for donations to other state and local candidates, a practice for which the commission has fined at least one other candidate.

You’d think the commission could tweak its online system so a filer couldn’t submit a disclosure if required fields were empty. You could be right. Executive secretary Stefan Ritter told me the other day he’s working on it, but he can’t say when.

“I am looking to do that, absolutely,” Ritter said. “It”s something we ought to be able to do.”

The commission will also consider a new rule to make it clear that “technical defects” do not include omitting information on how campaign money is spent. One campaign lawyer, Doug Chalmers, has already objected, claiming the proposal would exceed the commission’s authority.

A public hearing on that rule and others is scheduled for Dec. 15.

Our Ethics Loophole Archive

Loophole A: ALEC scholarships top $350K, go undisclosed

Loophole B: Business disclosure rules baffling, often ignored

Loophole B: 14 lawmakers’ undisclosed business with state





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