House Speaker Ralston’s secret political fund, by Chris Joyner - The Atlanta Journal-Constitution, 5/12/16
House Speaker
David Ralston, R-Blue Ridge, has long backed disclosure as the secret to ethics
in politics, but special interests funneled at least $67,500 into a secretive
account called the Ralston Conservative Leadership Fund to support the
speaker’s political agenda. That fund never registered with the state ethics
commission. BOB ANDRES / BANDRES@AJC.COM
I believe people have a right to
know who is behind the money driving our political system. I’m hardly alone.
Lots of good people feel just as strongly about shining a light on the darker
corners of politics. Take, for instance, this quote from an interview I did
with House Speaker David Ralston in February about the dangers of so-called “dark money.”
“We’ve allowed these groups to come
in and take very aggressive roles in political campaigns with no transparency
with no accountability,” he said. “The group can call themselves whatever they
want to call themselves, and they can spend money promoting, downgrading, whatever
position they take with respect to a candidate, and they are mystery groups. I
just think that in this era it is more appropriate to require disclosure by
those groups because I think transparency is very, very important.”
For years, Ralston, R-Blue Ridge,
has answered calls for more restraint in how money infects our politics by
saying that what is needed is full and prompt transparency. Then let the voters decide. So I was surprised to discover
something called the Ralston Conservative Leadership Fund, a secretive fund
filled with contributions from Blue Cross Blue Shield, pharmaceutical giant
Pfizer, the state beer wholesalers, a title loan company and big tobacco
interest Altria, among others.
House Speaker David Ralston had a
website for donations to a secretive ‘dark money’ fund — until the site was
abruptly ... Read More. The
fund is not easy to find. It is not registered with the Georgia ethics
commission. It was only by chance that The Atlanta Journal-Constitution
discovered it at all.
AJC data specialist Jeff Ernsthausen
discovered the fund when, while crunching thousands of campaign donations, he
found a series of payments to the fund but could find no record of the fund
itself. Jeff and I started by looking in the usual places state politicians
keep money, then we went to the more unusual places. Eventually we found it — at the IRS.
The fund is a 527 group, an IRS
designation for a political non-profits that can raise and spend unlimited
amounts of cash. Lots of political action committees are organized as 527s for
the tax benefits and under federal law they are required to filed electronic
disclosures of their spending and donor lists if they collect or spend more
than $50,000 annually. Under Georgia state law, 527s have to register with the
state ethics commission and disclose if they make $25,000 in annual political
contributions or make other political expenditures of any size.
House Speaker David Ralston, R-Blue
Ridge, has long backed disclosure as the secret to ethics in politics, but
special interests funnelled ... Read More. Ralston’s
surrogates say the fund never met those disclosure thresholds in any given
year, so there was never any need to register. The money came in, but
apparently never went out in any way that forced registration and electronic
disclosure.
“Because of its lack of activity
during the past two election cycles, RCLF has not met any of the statutory
thresholds that would require registration with any state entity or disclosure
of contributions,” Atlanta lawyer James McDonald wrote in an email. “I hope
this has been helpful.”
Not really. What I wanted was an
accounting of who contributed to the fund, how the money was spent and how much
was left. A few days later, after some prodding, McDonald sent a list, but much
of it is confusing or vague.
Chris Joyner, AJC
Watchdog. STAFF
According to the list, the RCLF
received $67,500 in donations in 2014, and spent $26,681 — the vast majority in
legal fees to McDonald’s firm. It also included payments to GOP consulting firm
Parlay Political for website hosting and “flyer design.” The amount collected
should have required the fund to electronically file a list of donors with the
IRS, but nobody did. McDonald blamed an “administrative oversight” for the
failure to disclose the fund’s donor list and said a filing would be made “as
soon as possible.”
These expenses could be problematic,
if the flyers or the legal advice are seen as an independent political expenditure
to assist Ralston in his 2014 re-election campaign. If so, the fund likely
should have registered and filed disclosures with the state. For his part,
McDonald said the legal fees “represent start-up costs and the firm’s legal
retainer” until the fund went “dormant.”
The RCLF had a website soliciting
donations. The website, registered to Alpharetta GOP consultants Stoneridge
Group (motto: “To win you must do what your competitors refuse to do”), came
down after I started asking questions about it. According to the site, the fund was
to be used to pay Ralston’s expenses “as Speaker Ralston supports Republican
members, candidates, leaders and causes.” The website told visitors to support
Ralston’s official re-election campaign “with the maximum allowable
contribution” and then contribute to the RCLF. And some powerful interests took
the hint.
A week after the fund formed, Select
Management Resources, an Alpharetta-based title loan company, made a $25,000
contribution. A few months later, the company PAC made a $2,500 contribution to
Ralston’s campaign. (Strangely, although the contribution is on the RCLF list,
there is no record of the $25,000 donation among Select Management Resources’
filings with the state, where I’d expect it to be.)
In 2014, Altria’s political action
committee contributed $2,500 to Ralston’s campaign account but sent $10,000 to
his leadership fund, allowing the tobacco company to well exceed what it could
have given the speaker otherwise.
Similarly, Pfizer gave a $1,000
contribution to Ralston’s campaign but $16,000 to the leadership fund, although
the fund lists Pfizer’s RCLF contribution as $17,500. The RCLF organized when Ralston was
running for re-election two years ago and disaffected tea party activists were trying hard to
defeat him in the GOP primary. In
a statement Thursday, Ralston tried to put the fund into that context.
“Two years ago, undisclosed dollars
from anonymous donors poured into my district and helped my opponent mount a
bitter campaign of lies and distortions,” Ralston said. “While any candidate
knows politics can be a brutal, I was disheartened that certain groups were not
subject to the same disclosure requirements as was my campaign.”
Over the past two years, Ralston has
tried — without success — to require activists to register with the state
ethics commission and disclose their funding and their spending. Ralston said
he will continue to push for “greater transparency and a level playing field”
in political spending. You and I can both hold him to that.
As AJC
Watchdog, I’ll be writing about public officials, good governance and the way
your tax dollars are spent. Help me out. What needs exposing in your community?
Contact me at cjoyner@ajc.com.
http://www.myajc.com/news/news/state-regional-govt-politics/house-speaker-ralstons-secret-political-fund/nrL6F/##
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