Ethics de­fense cost seen as ex­tra­or­di­nary

Ox­en­dine has spent $328,000 on le­gal fees and court ex­penses.

The Atlanta Journal-Constitution - - FRONT PAGE - By James Salzer [email protected]

When an ethics com­plaint was filed against Ge­or­gia In­surance Com­mis­sioner John Ox­en­dine in 2009, the col­or­ful politi­cian was among the front-run­ners in the race for gover­nor and had in­dus­try con­tacts help­ing to bankroll what looked to be a strong bid for the Repub­li­can nom­i­na­tion.

Nearly a decade later, Ox­en­dine — who wound up los­ing in the GOP pri­mary — is still bat­tling Ge­or­gia’s ethics com­mis­sion over the orig­i­nal com­plaint, as well as newer ones al­leg­ing he mis­spent cam­paign con­tri­bu­tions and il­le­gally loaned his busi­ness money he raised from sup­port­ers.

Al­most half of the more than $700,000 in left­over cam­paign con­tri­bu­tions that could have been re­turned to donors has been in­stead spent on le­gal fees and ex­penses, ac­cord­ing to an At­lanta Jour­nal-Con­sti­tu­tion anal­y­sis of state dis­clo­sures. At the end of 2018, his cam­paign ac­count had $281,000 left in it.

Both the time in­volved and the amount of money Ox­en­dine has spent on le­gal ex­penses fight­ing the com­plaints are ex­tra­or­di­nary for state ethics com­mis­sion cases, which typ­i­cally re­sult in fines of a few thou­sand dol­lars at most if a can­di­date or politi­cian is found to have vi­o­lated the law.

“This is the long­est-run­ning case I have been aware of,” said Wil­liam Perry of Ge­or­gia Ethics Watch­dogs.

Rick Thomp­son, a for­mer ex­ec­u­tive sec­re­tary of the state ethics com­mis­sion, called the $328,000 Ox­en­dine has spent on le­gal fees and court costs “a lu­di­crous amount.”

Ethics com­mis­sion staffers said they hoped to have the case set­tled by first half of the year. His

lawyer, Dou­glas Chalmers, de­clined to com­ment for this story.

Ox­en­dine, who served as Ge­or­gia’s in­surance com­mis­sioner for 16 years, has bat­tled ethics is­sues since the early days of his gu­ber­na­to­rial cam­paign. Fol­low­ing a 2009 AJC re­port, a com­plaint was filed ac­cus­ing two in­surance com­pa­nies of fun­nel­ing $120,000 in il­le­gal con­tri­bu­tions to his cam­paign.

An ethics com­plaint against the in­sur­ers ac­cused of giv­ing the money to Ox­en­dine was dis­missed in 2014 be­cause the com­mis­sion’s staff had made so lit­tle progress on it. But the com­mis­sion didn’t dis­miss charges against Ox­en­dine, the re­cip­i­ent of the do­na­tions.

The case re­mained largely dor­mant un­til the AJC re­ported in 2015 he failed to re­turn to donors more than $500,000 worth of left­over con­tri­bu­tions from his gu­ber­na­to­rial bid and spent money raised for Repub­li­can runoff and gen­eral elec­tion cam­paigns he never ran be­cause he lost in the GOP pri­mary.

Ox­en­dine amended his re­ports in Oc­to­ber 2015 to show more than $700,000 left over, in­clud­ing $237,000 in loans to his law firm, which he re­paid with $8,700 worth of in­ter­est.

Fol­low­ing the AJC re­port, ethics com­mis­sion staffers filed an amended com­plaint, ac­cus­ing him of im­prop­erly spend­ing more than $208,000 raised for the runoff and gen­eral elec­tions and ac­cept­ing more than the le­gal limit in con­tri­bu­tions from 19 donors.

The com­mis­sion dis­missed many of the charges in De­cem­ber 2015 af­ter Chalmers ar­gued the statute of lim­i­ta­tions had run out on charges in­volv­ing the 2010 cam­paign.

But the com­mis­sion kept alive the al­le­ga­tions he took il­le­gal con­tri­bu­tions from the in­surance com­pa­nies and spent money raised for races he never ran, and the case wound up in court.

In 2017, the com­mis­sion filed yet an­other com­plaint, al­leg­ing Ox­en­dine il­le­gally ben­e­fited per­son­ally when his cam­paign loaned money to his busi­ness.

The cases have been un­usual be­cause Ox­en­dine fought his bat­tles in court, rather than solely in front of the ethics com­mis­sion, like most can­di­dates. Ox­en­dine’s cam­paign has paid Chalmers, who has rep­re­sented him in the cases since 2015, about $185,000 through the end of 2018. But he has also paid lawyers to fight a sub­poena for bank records re­lated to the loan.

While ethics of­fi­cials said the left­over money should have been re­turned to donors, it is le­gal for cam­paigns to use it to pay on­go­ing le­gal ex­penses. For­mer can­di­dates can also give it to other can­di­dates.

While he was still fight­ing the ethics charges in 2018, Ox­en­dine used left­over cam­paign money to give $13,200 each to Brian Kemp’s suc­cess­ful bid for gover­nor and Jim Beck’s equally suc­cess­ful cam­paign for in­surance com­mis­sioner.

Perry said the Ox­en­dine case is an ex­am­ple of a sys­tem that al­lows a big-money can­di­date to de­lay ethics charges in­def­i­nitely.

“It’s not fair to the av­er­age can­di­date . ... Ninety-five per­cent of can­di­dates don’t have the kind of money to fight this way,” Perry said. “This is more about kick­ing the can down the road than prov­ing he is right or hav­ing a le­gal tri­umph.”

Perry said law­mak­ers should con­sider whether can­di­dates with fat bank ac­counts should be able to use left­over money — rather than their own — to fight such bat­tles. Other­wise, they can ig­nore dis­clo­sure laws and just count on hav­ing the money to fight any pos­si­ble com­plaints about vi­o­la­tions.

“It’s not John Ox­en­dine’s money, he has other peo­ple’s money to gam­ble with in the le­gal sys­tem,” Perry said. “He is us­ing money peo­ple have given him. He doesn’t have to sweat this be­ing a personal expense. Our ethics laws should be changed so you are not al­lowed to do that.”

CUR­TIS COMP­TON / CCOMP­[email protected] AJC.COM

For­mer Ge­or­gia In­surance Com­mis­sioner John Ox­en­dine is still fight­ing ethics charges dat­ing to his un­suc­cess­ful race for gover­nor in 2010.

CUR­TIS COMP­TON / CCOMP­[email protected]

Ge­or­gia Repub­li­can can­di­date for gover­nor John Ox­en­dine holds his son, Jake, as he con­cedes the race at the Ge­or­gian Ter­race on Peachtree Street in At­lanta on July 20, 2010.

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