Candidates may be on hook for private club memberships

Last week I noted that a case before the Georgia State Ethics Government Transparency and Campaign Finance Commission might leave some candidates on the hook to reimburse their campaign for past payments to private clubs. From the Atlanta Journal-Constitution story I cited,

State officials have put Georgia politicians on notice: You can’t spend campaign funds at business clubs and similar organizations unless it’s for legitimate election expenses.

The notice came in a civil case against former Fulton County Commissioner Bill Edwards, who admitted misspending $13,836 at the Commerce Club in Atlanta. Under a settlement approved by the Georgia Government Transparency and Campaign Finance Commission Thursday, Edwards agreed to repay his campaign that amount or donate it to a charity.

Commission attorney Robert Lane told the board the ruling would come as a surprise to many politicians, who he said routinely spend campaign cash on memberships and expenses at business clubs, chambers of commerce and similar organizations.

“This will cause a lot of consternation among elected officials,” Lane said. “A lot of them do it.”

Two issues arise for politicians. First, can they continue to pay for private club expenses from campaign funds; second, are candidates who previously paid for private club expenses liable to reimburse their campaign?

I checked with the commission and today received a reply,

It is the opinion of Commission staff that candidates will need to reimburse their campaigns for personal expenses, including but not limited to private club membership dues.  The Commission is limited in its enforcement power to a “lookback” period of 5 years for an office with a 4 year term and three years for an office with a 2 year term due to the statute of limitations found at O.C.G.A. 21-5-13.

Please note that some payments to private clubs are “ordinary and necessary” campaign expenses.  For example, if candidate Doe throws a fundraiser at the county club where he is a member, then the expenses associated with the fundraiser are allowed.

I hope that these answer[s] help.

Sincerely,
Robert S. Lane
Staff Attorney

Georgia Government Transparency and Campaign Finance Commission
200 Piedmont Ave., S.E. | Suite 1402 – West Tower | Atlanta, GA 30334

Please note that these responses are given for the purposes of trying to assist you by providing the Commission staff’s current view. They are not formal advisory opinions of the Commission and are not binding on the Commission nor can they supersede the law, and in these respects they are informal and subject to change, and they should not be used as evidence or admissions in any proceeding. See, e.g., O.C.G.A. § 45-6-5; P.C. Gailey Contractors, Inc. v. Exxon Co., 143 Ga. App. 827 (1977); Henderson v. Carter, 229 Ga. 876 (1972), overruled on other grounds, City of Atlanta v. Barnes, 276 Ga. 449 (2003) (issue of class certification for tax refunds).

If private club membership fees run $250 per month, a candidate who paid his or her dues from a campaign account could be looking at reimbursing up to $15,000. That’s quite a hit. If I were in this situation, I’d be talking to my campaign’s lawyer and/or treasurer.

Mr. Lane noted in a follow-up email after I asked if it was okay to pass along his written opinion that “If people have questions, they may want to call me directly (using the number below) to get a more detailed perspective.”

Rather than publish his direct number and email, if you need to get in touch with Mr. Lane, email me and I’ll give it to you with no questions asked, and won’t tell anyone you inquired.