State ethics commission staffers say former Georgia Insurance Commissioner John Oxendine, a one-time frontrunner for governor, illegally spent campaign donations on luxury car leases, child care bills, an athletic club membership and a down payment on a $965,000 house.
They said the expenditures came after Oxendine’s campaign transferred money to his law firm. His lawyer said the “loan” was legal, but the commission on Wednesday voted to move ahead with prosecuting the former commissioner, who has battled ethics complaints for a decade.
“I am not buying that this was a loan, ” said commission member Eric Barnum.
The commission also voted to move ahead with a complaint that he took $120,000 — far above the legal limit — from two Georgia insurance companies through affiliated political action committees.
The votes Wednesday — the first step in the ethics prosecution process — means the commission found probable cause to believe violations of the law may have occurred. The cases now head to an administrative law judge for hearings, although staffers have said they could be considered by a district attorney or federal prosecutor.
The commission dismissed a complaint that Oxendine illegally spent $200,000 on races he never ran.
The hearing Wednesday was seen as the beginning of the end of a 10-year ethics fight between Oxendine, one of the state’s most colorful politicians during the 1990s and 2000s, and the commission, which is charged with enforcing campaign finance and lobbying laws. Oxendine has called it a waste of taxpayer money, and he didn’t back down after the hearing.
“What was witnessed today was an elaborate charade on the part of the staff of what is probably the most troubled and disorganized state agency in modern history attempting to justify its squandering of hundreds of thousands of dollars of state resources pursuing a personal vendetta over the past 10 years,” Oxendine said in a statement.
“The commission staff does not understand the law, so it decided to ignore the law and fabricate slanderous statements that are contrary to the actual facts.”
Much of the hearing was taken up with debates over $237,000 in left-over donations to Oxendine’s failed 2010 gubernatorial race that he said the campaign “invested” in his law firm. Commission staffers argued that he used the money for personal expenses, which is illegal.
“You cannot make campaign assets your personal assets,” said Robert Lane, the commission’s lawyer who investigated the case. “What Mr. Oxendine did was take campaign money and bought a house.”
Oxendine’s lawyer, Doug Chalmers, argued that Oxendine’s campaign didn’t break the law.
“Some of the characterizations of the facts are completely inaccurate,” Chalmers said. “It is a lot of speculation.
“The contention that a campaign may not make a loan just flatly mistakes the law.”
But the commission’s chairman, Jake Evans, wasn’t persuaded. “Looking at the data here, it doesn’t look good,” he said.
Commission staffers and members said that there is no evidence that Oxendine had a formal loan agreement between his campaign and law firm. Chalmers said a formal agreement wasn’t required.
Lane said, “Mr. Oxendine had no intention of paying back this loan until he was sued (by the commission).”
Oxendine came under scrutiny in May 2009, when an Atlanta Journal-Constitution investigation reported that two Georgia insurance companies with the same boss funneled $120,000 — about 10 times the legal limit — to Oxendine's gubernatorial campaign.
The ethics complaint against the insurers accused of giving the money to Oxendine was dismissed in 2014 because the ethics commission’s staff had made so little progress on it, in part because of staff turnover and seemingly endless drama at the agency. 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 that Oxendine never returned more than $500,000 worth of leftover contributions from his gubernatorial bid and kept and spent money raised for Republican runoff and general election campaigns that 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.
Following the AJC report, ethics commission staffers filed an amended complaint in 2015, 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 new charges that December, after Chalmers argued that the statute of limitations had run out on charges involving the 2010 campaign.
But the commission kept alive the allegations that he took illegal contributions from the insurance companies and spent money raised for races he never ran, and Georgia courts declined to dismiss the case in June.
Chalmers argued Wednesday that a candidate can’t be prosecuted for accepting contributions like those given by the insurance company political action committees, and that Oxendine wasn’t required to return leftover money to donors who contributed to the runoff and general election campaign he never ran. The commission agreed with him on the issue of returning leftover funds, but backed commission staff on the case of bundled contributions.
With Wednesday’s dismissal of the complaint related to leftover funds, all of the charges in the 2015 commission filing have now been dismissed.
However, The commission filed a new complaint in 2017 alleging Oxendine illegally used campaign money for personal gain. Under Georgia law, campaign funds can only be used to run for or maintain office. When someone leaves office, any remaining money is supposed to be returned to donors or given to other campaigns or nonprofits.
Oxendine has spent a large chunk of his leftover bankroll on attorneys fees, which Chalmers said is legal. Oxendine has also used leftover money to give about $29,000 to the campaign of one of his successors, Jim Beck, the suspended insurance commissioner who was indicted in May on charges that he stole $2 million from his former employer.
George Anderson, the longtime ethics watchdog who filed the original complaint, attended the hearing and said he was happy to see the case move forward.
“He really believes he’s above the law,” Anderson said of Oxendine. “There has finally got to be a reckoning for John Oxendine.”
OUR REPORTING SO FAR
2009: The Atlanta Journal-Constitution reports that two insurance companies funneled$120,000 in contributions to John Oxendine’s campaign for governor, far in excess of the legal limit.An ethics complaint is filed against Oxendine’s campaign and the donors. 2010: Oxendine finishes fourth in the Republican primary for governor.
2011: The AJC reports that on his last day in office as commissioner of insurance, Oxendine issued himself several licenses to sell insurance and adjust claims without taking the mandatory classes or licensing tests almost everybody else is required to take.
2015: The AJC reports that more than$500,000 in leftover campaign funds from his gubernatorial run disappeared from Oxendine’s reports filed in January 2015.Oxendine said he made a mistake in the filing, but the AJC also reported he had not returned money he raised for races he never ran, such as the GOP runoff and general election in 2010.
2015: The state ethics commission files an expanded complaint against Oxendine, but some of the charges are later thrown out by the commission after Oxendine’s lawyers argue they are beyond the statute of limitations.
2016-17: Court rulings keep the case going.The ethics commission files new charges over a loan Oxendine’s campaign made to his law firm.Oxendine files a lawsuit against the commission.
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