Registry of Election Finance: Legislators Like It, Others Question Effectiveness

State legislators seem pleased on a bipartisan basis with the way Tennessee’s campaign finance watchdog agency performs, but one concerned citizen, Mike Hart, wonders if that’s not the equivalent of foxes being pleased with oversight of the hen house.
That agency, the Registry of Election Finance, on Wednesday will be dealing with a complaint from News Sentinel contributing columnist Pam Strickland over “irregularities” in financial disclosures of Knox County Mayor Tim Burchett.
“They are accessible, responsive to questions and they seem to be well-organized,” says Sen. Bo Watson, R-Hixson, who serves as Senate speaker pro tempore and chairman of the Senate Ethics Committee. “They just run a good operation.”
“They’re not set up over there to do witch hunts,” said House Democratic Caucus Chairman Mike Turner of Nashville. “They try to accommodate candidates who, they understand, can make mistakes. They’re going to make sure you get it right, but they’re not going to persecute you.”

Hart, a retiree who lives in Estill Springs and is immediate past chairman of the Franklin County Republican party, is something of a citizen watchdog and has come across matters in political campaign disclosures that he saw as potential violations of state law. Last year, he filed a formal complaint against state Rep. Judd Matheny, R-Tullahoma. It was dismissed.
“They took great pains, it appeared to me, to sidestep the issues,” he said. “They never told me I was wrong. They just sidestepped and avoided the issues.”
Hart’s complaint was one of 28 reviewed by the Registry of Election Finance over a 10-year period ending last Dec. 31. Nine of them resulted in fine — a total of $137,297 — being assessed for violations of campaign finance law. The latest complaint is the one concerning Burchett up for discussion by the registry’s board on Wednesday.
In the same 10-year period, a total of $830,175 in fines, formally known as civil penalties, have been assessed in 432 cases the agency has either itself brought fourth or dealt with after complaints, according to records provided by Drew Rawlins, executive director of the Bureau of Ethics and Campaign Finance. However, only $237,790 of penalties assessed — or about 28.5 percent — have actually been paid.
The biggest fine ever assessed for state campaign law violations in Tennessee came in 2007 when former Sen. Jerry Cooper, D-McMinnville, was ordered to pay $120,000 after a hearing on a complaint alleging he converted more than $95,000 in his campaign account to personal use. Cooper has paid $57,500 of the total — the last payment made in 2009 — with the rest still outstanding, records show.
The second largest penalty was $35,000 assessed and paid last year by Rep. Joe Towns, D-Memphis, after a long history of repeated violations — mostly for failure to file reports, late filings, incorrect information on reports and the like.
Under state law, persons who have not paid assessed penalties are prohibited from becoming a candidate for public office again. Thus, had Towns not paid the $35,000, he would not have been able to seek re-election this year.
Currently, there are 135 people banned from seeking public office because of failure to pay penalties, according to a list kept by the Bureau of Ethics and Campaign Finance and sent annually to county election commissions across the state.
Once an assessment is final, the Registry turns collection efforts over to the state attorney general’s office.
“We make an effort to collect every civil penalty we can,” said Sharon Curtis-Flair, spokeswoman for the attorney general’s office, in an email response to questions. “But when the cost of filing a lawsuit to collect a civil penalty costs the state much more than the amount of the penalty, it makes more sense to rely on the deterrent that they can’t run for office until the penalty is paid.”
There is no statute of limitations on debts due to the state, she said, so all unpaid civil penalties are still subject to collection efforts.
In general, the maximum penalty for violation of a campaign finance law is $10,000 and each check written that violates the law is considered a separate offense. But the large majority of fine are assessed for relatively modest amounts — often $50 or $100 — for minor infractions such as late filing of a disclosure.
Of the 432 penalties assessed over the past decade, 365 were for less than $5,000; only 67 for greater amounts, records show.
The number of penalties assessed annually has generally declined over the past decade, from a total of 65 in 2002 to 33 in 2011. The peak year for penalties was 2006, when 70 persons faced fines from the Registry.
In that year, 2006, the oversight of lobbyists was transferred from the Registry to the Ethics Commission under legislation passed in a special session of the Legislature. Factoring in penalties assessed against lobbyists by the commission – none in 2006 or 2007 and 11 for a total of $13,125 last year, for example – there has still been a decline.
Rawlins attributes this to “better education” of candidates, who he says as a group have become more familiar with filing requirements and miss fewer filing deadlines and make fewer mistakes.
Dick Williams, head of Common Cause in Tennessee and active in state campaign financial disclosure issues for more than 30 years, said he was “surprised and disturbed” that less than a third of assessed penalties are paid and that officials should consider steps to address the matter. Watson and Rep. Curtis Johnson, R-Clarksville, who is chairman of the House Ethics Committee, also express concern in interviews — though Watson noted that collecting unpaid fines and court costs is a problem in courts dealing with all manner of offenses statewide.
The Registry of Election Finance dates back to 1989, when Tennessee first imposed limits on campaign contributions. State campaign finance law and the administrative structure of the agency itself have undergone changes since then, but what Hart sees as a “structural problem” has remained constant.
Enforcement of campaign finance laws rests with the Registry’s six-member board, designed by statute to assure that three members are Republicans and three are Democrats — though one Democratic seat has been vacant since April of 2011.
Four members — two Republicans, two Democrats — are appointed by the Legislature’s partisan caucuses. The other two are appointed by the governor, but one must be from a list submitted by the state Republican party, the other from a list submitted by the state Democratic party.
For the purposes of administrative oversight, the Registry and the Tennessee Ethics Commission — which has jurisdiction over lobbyist reporting and filing of conflict-of-interest statements by public officials — are combined as the Bureau of Ethics and Campaign Finance and report to Secretary of State Tre Hargett, who is elected by state legislators.
In other words, as Hart points out, state legislators who wrote the laws have designed things so that those who enforce the laws are selected and overseen — at least indirectly — by those who are subject to enforcement actions, namely legislators.
“It’s a fox watching the hen house situation,” Hart said in an interview.
Hart’s complaint against Matheny had three parts:
The first, involving complicated PAC transactions, was dismissed because there was no allegation of fraud, and state law states that — absent a showing of fraud — financial disclosures are deemed correct and cannot be challenged after two years have passed.
The second pointed out that Matheny had taken money from his campaign account twice to cover what appears to be the same expense. That was dismissed after Rawlins advised this appeared a simple mistake that could be corrected by an amendment to his disclosure form, Hart said.
Rawlins, while not recalling the specific instances, agreed that such an approach is common to what may be honest mistakes made in a candidate’s disclosure. The Registry staff reviews all disclosures and matches information on them with other reports that may be related.
For example, it matches all PAC contributions a candidate reports receiving with PAC reports on money they donated. If a candidate omits a PAC donation that the PAC reports making, the candidate gets a letter. If he or she then corrects the disclosure to show the donation, the matter is dropped.
The Registry staff also conducts audits of randomly selected candidate reports, often turning up mistakes. Again, if the mistakes are relatively minor and corrected, there is typically no further action.
“The Registry’s main goal has always been to have disclosure reports filed timely and accurately,” Rawlins said.
“They (Registry board members) clearly feel very strongly that, if somebody comes in and has some sort of reasonable explanation, they are forgiving,” said Williams. “They’re more interested in compliance than penalties and I think that’s a good position.”
Frequently, the Registry and its sister organization, the Ethics Commission, will assess a substantial penalty against a candidate who has failed to file a required disclosure and ignored notices. Such was the case, for example, with a $10,000 penalty assessed against Knox County Trustee John Duncan last year for failure to file a conflict-of-interest statement. The penalty was dropped after Duncan asked for reconsideration, explained the notices went to an old address and filed the form.
The third Hart allegation involved his review of state reports on expense payments made by the state to legislators. Hart found a case where, he says, it appeared that a PAC operated by Matheny had reimbursed the lawmaker for the same expenses that were paid by the state. In fact, Hart says further review showed six legislators with what appears, at least on the surface, to be similar “double dipping.”The Registry dismissed that one because it has no jurisdiction over legislative expense payments by the state and an expenditure of campaign funds for travel related to service as a lawmaker is a legitimate expense.
Hart said he then sent Hargett an email asking what agency, if not the Registry or Ethics Commission, would be the proper forum for looking into what he believed is an impropriety. Hargett’s responded, Hart said, that the secretary of state “did not have jurisdiction to opine on the question.”
He posed the same question to the Attorney General Bob Cooper in letters and got no response at all, Hart said. Asked why the office did not respond, Curtis-Flair replied by email that “we cannot provide legal advice to anyone except our clients” — namely state government officials and departments, not private citizens.
“It is frustrating as a citizen when you depend on agencies of your state government to be conscious of possible wrongdoing, make them aware of that possibility and you get no response,” he said.
Hart also reviewed spending by a PAC Hargett set up while he was a legislator and noted that it gave in late 2008 $4,800 each to PACs controlled by Lt. Gov. Ron Ramsey and Jason Mumpower, then House Republican leader — two men in a position to help him be elected as secretary of state, which he was in January 2999.
Hargett said he has virtually nothing to do with operations of the Registry and expenditures by his PAC were legal. At the time of the donations to the PACs controlled by Ramsey and Mumpower, who is now chief of staff for the state comptroller’s office, there was no assurance that Republicans would control the Legislature and thus the election of constitutional officers, he said.
“If someone is naturally cynical, they’ll always find something to be cynical about,” said Hargett when asked about Hart’s comments,
As for himself, Hargett said he believes the Registry and Ethics Commission system has worked well, though there is “still some confusion about who does what.”

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