John Oxendine keeps campaign cash for 2010 races he never ran

Law requires former insurance commissioner to return money to donors. Oxendine amends campaign filings after AJC finds $500,000 discrepancy in his reports.


Longtime Georgia Insurance Commissioner John Oxendine, a colorful figure in Georgia politics for nearly two decades, appeared to be a shoe-in to at least make the Republican runoff when ran for governor in 2010.

Oxendine tapped donors in the industries he regulated for a seemingly endless supply of campaign cash and topped the polls. But his lead evaporated late in the primary campaign and he finished fourth as Nathan Deal swept past him on his way to becoming Georgia’s 82nd governor.

When the mighty fundraiser left office in January 2011 after his defeat in the governor’s race, he reported still having more than $500,000 in his gubernatorial campaign war chest. Oxendine more or less maintained that figure in his filings through early 2014.

But in January, he reported the money was gone. And the report didn’t say where it went.

Elected officials in Georgia aren’t allowed to keep excess campaign money for their personal use, and Oxendine says a reporting error made it look like his campaign bankroll disappeared. The $500,000 is still in a campaign bank account, five years after he lost the gubernatorial primary, he told The Atlanta Journal-Constitution last week.

Oxendine said he failed to carry the previous balance forward onto this year’s report, and he filed an amended report with the ethics commission on Thursday after being contacted by the AJC.

It is the kind of major discrepancy that would likely have gone unnoticed in years past, and one the newly enlarged state ethics commission staff hopes to catch more easily in the future.

But an AJC investigation into Oxendine’s campaign reporting also found that the former insurance commissioner collected close to $750,000 for GOP runoff and general election races in 2010 that he never actually ran.

Some ethics experts question why the donations Oxendine raised for the runoff and general election races were never returned to contributors, as the law says they should be.

“Any candidate that designated contributions for a future election and they are not involved in that election absolutely must return every single penny of those contributions,” said Rick Thompson, a former state ethics commission director who has overseen campaign reporting compliance for several state officials, including Deal. “The law states you can’t spend that money if you are not in that election.”

The AJC asked Oxendine for a copy of the bank statement for his campaign account, showing the excess funds. He pledged to do so but had not by close of business last week.

“It is just sitting in the bank earning a half a percent interest,” he said. “The law says we have to give it back.

“It doesn’t say when.”

Missing funds unnoticed

Oxendine said all the money is accounted for and that the remaining $500,000 will be returned once a pending complaint with the state ethics commission is decided. However, ethics experts say Oxendine can’t pay his legal expenses with funds he raised for the races he never ran. Oxendine, a lawyer, argues that he can use his leftover campaign money to pay his legal bills.

To put the leftover money in perspective, the $500,000 is more than many non-incumbent candidates ever raise to run for statewide office. Richard Woods was elected state school superintendent last year on about $60,000 in contributions.

Questions surrounding Oxendine’s use of campaign funds and reporting remained largely a state secret until it was noticed by the AJC. Now it will likely become part of the ongoing Oxendine investigation by a rejuvenated ethics commission. With increased funding from the General Assembly, the panel has been ramping up staffing, and it plans to increase auditing of campaign accounts.

Just last month commission staffers announced they would start a probe of former Fulton County Commissioner Bill Edwards’ campaign finances.

Following an investigation by the AJC, Channel 2 Action News and the Georgia News Lab, the commission said it hoped to find out what happened to about $80,000 that disappeared from his reports in 2010. In a letter to Edwards, the commission cited several possible violations of state law, including failing to account for the missing money and improperly spending nearly $14,000 on membership and dues at a local business club.

Edwards said he was taken by surprise by the investigation and contended he’d done nothing wrong.

Stefan Ritter, the commission’s executive secretary, said the agency wasn’t aware of the Oxendine issues raised by the AJC. But the commission may develop a computerized auditing system that will automatically search campaign reports for such discrepancies and catch them more quickly.

Ethics chief expects more cases

Thompson used similar reviews in the late 2000s, leading to several embarrassing cases involving state politicians and lobbyists.

Auditing helped lead to a record $80,000 fine against the powerful Georgia Association of Realtors for failing to disclose more than $585,000 in campaign contributions and other expenditures in 2006.

Such auditing largely disappeared over the past few years as the commission devolved into finger pointing and costly whistle-blower lawsuits that led to virtually no work getting done on ethics cases.

Among the casualties of that era was a case against two insurance companies accused of funneling $120,000 in illegal contributions to Oxendine’s 2010 gubernatorial campaign. The case against the insurers, filed in 2009, was dismissed in 2014 because the commission’s staff had made so little progress on it. But commission staffers say they have continued to move ahead with its case against Oxendine, the recipient of the donations.

Ritter, an 18-year veteran of the Attorney General’s Office, was hired in April, the same month the General Assembly approved a state spending plan that nearly doubled the commission’s budget. The increase for fiscal 2016, which began July 1, was designed to let the commission hire four attorneys and four investigators.

Ritter said he couldn’t comment on Oxendine’s case. But he said the extra funding may help the panel catch more campaign discrepancies.

“The Georgia General Assembly substantially increased the budget of the commission and that opens the door for hiring additional staff that will help us in a number of ways,” Ritter said. “My hope is that we can also use technology to do a more thorough job of looking at the filings that are made.”

Oxendine, others exploit loophole

As insurance commissioner, Oxendine set new standards for political fundraising. He was often accused of strong-arming those working in the industries he regulated for contributions, a charge he denied.

As a gubernatorial candidate in 2010, he reported taking in about $3.9 million in contributions. He reported spending close to $3.4 million.

Oxendine’s campaign reported collecting about $750,000 for the GOP gubernatorial runoff and the general election. However, he didn’t make the runoff or the general election, so he never ran those races. Still, he reported spending $100,000 on both of them. About $70,000 of that went toward campaign refunds.

State law dictates that candidates who raise money for races they don’t run must refund it to contributors or, if refunding it isn’t possible, donate it to charity. But commission officials say state law doesn’t specifically say how long candidates have to give the money back.

While many other candidates — such as those who ran unsuccessfully for governor in 2010 — also raise runoff and general election money for races they didn’t run — they generally return it to donors after the election.

But other candidates have held onto it years after they raised it.

Senate President Pro Tem David Shafer, R-Duluth, who once served as Oxendine’s chief deputy, has held about $140,000 in the account he created in 2008 to run for lieutenant governor. Shafer raised the money but then decided to seek re-election to the Senate in 2010 once Lt. Gov. Casey Cagle backed away from the governor’s race and, likewise, ran for re-election.

Shafer dropped out of the race more than five years ago. He is considered a possible candidate for lieutenant governor in 2018 if Cagle runs for governor, but he can’t legally use the money he raised in 2008 and 2009 for that race, ethics officials say.

When asked why he didn’t return the money, Shafer’s directed the AJC to his campaign lawyer. A statement from his campaign lawyer, Robert Highsmith, didn’t clear up the issue.

“Senator Shafer suspended his campaign for lieutenant governor when Lieutenant Governor Cagle decided to seek re-election in the 2010 cycle,” Highsmith said. “Nothing has changed in the account since then.”

Loophole to be closed

Many of the contributors who would get money back from candidates like Oxendine and Shafer are institutional donors — politically active businessmen and women, businesses, lobbyists and lobby groups who give money to top candidates every election cycle and don’t much question how it’s spent.

Rep. Rich Golick, R-Smyrna, a lawyer for Allstate Insurance, contributed about $6,000 to Oxendine’s primary race in 2010 and another $2,124 to the runoff campaign the candidate never ran.

Golick said he didn’t even remember giving to Oxendine’s runoff campaign, so he didn’t ask for it back.

When asked about Oxendine not having returned the money to donors five years after most of the contributions were given, Golick said, “First and foremost the letter of the law must be followed. After clearing that hurdle, it then becomes a matter of whether or not something passes the straight-face test.”

Ethics commission staffers are expected to propose a change in campaign finance rules by the end of the year giving candidates a time limit for returning unused contributions, rather than allowing hopefuls like Oxendine and Shafer to sit on hundreds of thousands of dollars for years.

As for Oxendine, he blames it all on the commission, saying the money would have been returned to donors long ago if the panel hadn’t taken so long to decide his case on the contributions from insurers.

“The ethics board has still not closed that six, seven-year-old case,” he said. “If the local police wanted to arrest you for a crime, they couldn’t wait forever to do something. I think it’s ridiculous they have had this case open forever.”


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