Jul 14, 2022 - News

State alleges $3 million in unreported spending by Abrams-founded group

Illustration of a spotlight moving over a dollar sign in the dark.
Illustration: Brendan Lynch/Axios

Georgia's Republican-controlled state ethics commission is alleging the New Georgia Project — the voting rights group Stacey Abrams founded — failed to disclose more than $3 million worth of electioneering expenses and more than $4 million in political contributions between 2017 and 2019.

  • This makes it one of the largest cases the commission has taken up.

Why it matters: The complaint's first substantive hearing is set to happen in the months leading up to a high-profile November rematch between Abrams and Gov. Brian Kemp, who appoints a majority of the ethics commission members. The proceedings have been stalled in litigation since 2019.

Driving the news: The Georgia Government Transparency & Campaign Finance Commission has tentatively scheduled an Aug. 1 hearing on its case against the New Georgia Project and the New Georgia Project Action Fund.

  • The commission's original 2019 complaint was amended in June to include financial details, according to documents reviewed by Axios.
  • A separate ethics investigation of Abrams' campaign itself remains ongoing.

Details: The commission alleges that in 2018 the New Georgia Project and the Action Fund illegally canvassed for Democratic candidates including Abrams, used phone bank scripts pushing people to vote Democratic and included "#teamAbrams" in social media posts soliciting donations. It also targets the group for work on a 2019 Gwinnett County MARTA referendum vote.

  • The Action Fund is a 501(c)(4), which is authorized to conduct some political activities.
  • New Georgia Project is a nonprofit and risks losing its tax-exempt status if it engages in partisan advocacy or endorses a candidate.

The commission argues the two operated effectively as one entity and, therefore, failed to register as a super PAC or “independent committee” and failed to disclose electioneering expenses.

Catch up quick: The hearing is the latest episode in a longstanding fight between the New Georgia Project and the Republican-led state government, including the ethics commission and the Secretary of State's office, which Abrams and her allies have decried as politically motivated.

  • In 2014, then-Secretary of State Brian Kemp's office subpoenaed the group for possible voter fraud in its first year of operation.
  • In 2020, Secretary of State Brad Raffensperger alleged the group improperly submitted absentee ballot applications.
  • The group has fought back along the way, filing lawsuits to challenge the state's voting policies.

Zoom in: Four of the five commission board members are Republicans. By state law, the governor has three appointees, but one must be a member of the opposite party. House and Senate leaders appoint the other two. The commission's executive director has also been active in Republican politics and a Kemp donor.

The other side: A spokesperson for the New Georgia Project declined to comment.

In their response to the 2019 complaint, the New Georgia Project's lawyers argued the Action Fund was legally paid as a commercial canvassing vendor by other groups and, therefore, was not an "independent committee" receiving donations.

  • The group's lawyers also challenged the constitutionality of the underlying Georgia law laying out its committee registration and reporting requirements.

Of note: According to Robert Lane, deputy director of the commission, the New Georgia Project has until Monday to respond to the June amended complaint.

What's next: The commission plans to hear both sides of the complaint on Aug. 1 at 10am, to determine whether there's cause for a second hearing to determine guilt or innocence.

  • The commission has the power to compel entities to "cease and desist," to pay a fine or it can forward the case for criminal prosecution to the state Attorney General.
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