GSB Vol. 11, No. 6, Pg. 16. Georgia's New Ethics Laws: A Summary of the Changes Relevant to Candidates, Campaigns and Contributors.

Authorby J. Randolph Evans and Douglas Chalmers Jr.

Georgia Bar Journal

Volume 11.

GSB Vol. 11, No. 6, Pg. 16.

Georgia's New Ethics Laws: A Summary of the Changes Relevant to Candidates, Campaigns and Contributors

GSB JournalVolume 11, No. 6April 2006Georgia's New Ethics Laws: A Summary of the Changes Relevant to Candidates, Campaigns and Contributorsby J. Randolph Evans and Douglas Chalmers Jr.In the 2005 legislative session, the General Assembly passed, and Gov. Sonny Perdue signed, a comprehensive ethics reform package that resulted in significant changes to Georgia's ethics laws, including the Ethics in Government Act (the "Act").1 The changes to the Act, which went into effect on Jan. 9, 2006, will be seen and felt by everyone involved.

In its December 2005 edition, the Georgia Bar Journal published an article that summarized changes to the Act that are relevant to lobbyists and legislators.2 This article reviews the changes to Georgia's ethics laws that will affect candidates, campaigns and contributors during the 2006 campaigns and elections.

Limits on Campaign Contributions

The new law adds some important regulations and restrictions concerning campaign contributions.

Affiliated Business Entities

The Legislature has reinserted into the law a provision that was eliminated in 2000. Before the 2000 amendments went into effect on Jan. 1, 2001, the Act required that contributions from all "affiliated corporations" be aggregated when calculating whether a given corporation had exceeded the contribution limits. Corporations were deemed to be affiliated if they were: (a) under common ownership and control, (b) in a parent-subsidiary relationship, (c) sister corporations, or (d) in a relationship where one corporation exercised control over another.3 The contributions of affiliated corporations were aggregated for purposes of the contribution limits. The provision of the Act which accomplished this stated in part as follows:

No corporation shall during the course of any election year . . . make contributions to any candidate . . . which in the aggregate for that calendar year, together with any contributions to the same candidate in the same year by any affiliated corporations, exceed [the contribution limits].4

The highlighted language was removed when the Act was amended in 2000. Confusion has nonetheless continued to exist in this area because, while the Legislature removed this operative provision, it retained the definition of an "affiliated corporation" in the Act.5 In other words, although the Act continued to define the phrase "affiliated corporation," the term itself was not actually used anywhere in the Act.

Recognizing the incongruity posed by this fact, in July 2001 the State Ethics Commission (the Commission) adopted a rule which attempted to put back into the law the language that the Legislature had removed.6 The language in the rule is virtually identical to the language that was repealed from the Act in 2000. The Commission's stated position on this issue has been that, because of the adoption of the rule, the law has always required aggregation of contributions by affiliated corporations. In light of the fact that the Legislature removed this requirement when it amended the Act in 2000, however, the Commission's rule has been vulnerable to challenge on the ground that it exceeds the scope of the Commission's authority.(fn7)

The rule was, nonetheless, good policy. In recognition of this fact, the 2005 revisions to the Act state that "[n]o business entity shall make any election contributions to any candidate which when aggregated with contributions to the same candidate for the same election from any affiliated corporations exceed the per election maximum allowable contribution limits for such candidate as specified in subsection (a) of this Code section."(fn8)

Importantly, this new provision is broader than the previous version of the statute. Like the previous statute, the new statute requires the aggregation of contributions from "affiliated corporations." Unlike the old statute, however, the new law defines the term "affiliated corporations" to include affiliated "business entities."(fn9) Because the term "business entity" has always been defined to include businesses other than just corporations, this change expands the scope of the definition of "affiliated corporations." In addition, the definition of the term "business entity" itself has been expanded to include additional types of businesses.(fn10)

The net effect of these changes is that the aggregation requirementsare significantly broader. Going forward, all affiliated businesses, regardless of the legal form of the business (i.e., partnership, corporation, etc.), are subject to one aggregated contribution limit. This change will limit the ability of any one contributor to give multiple large contributions through various different businesses.

Affiliated Committees

The recent amendments to the Act did not, however, make comparable changes with respect to contributions from "affiliated committees." The Act continues to define the term "affiliated committees" to mean "any two more political committees (including a separate segregated fund) established, financed, maintained, or controlled by the same business entity, labor organization, person, or group of persons, including any parent, subsidiary, branch, division, department or local unit thereof."(fn11) As was the case with affiliated corporations, however, although the Act defines the term, it does not actually use it. As such, the Act does not expressly require that the contributions of affiliated committees be aggregated for purposes of the contribution limits.

As it did with affiliated corporations, the Commission previously adopted a rule that attempts to address this issue by requiring the aggregation of contributions from affiliated committees.(fn12) Unlike the case with "affiliated corporations," however, the Legislature did not revise the Act during the 2005 session to address this issue. Accordingly, absent legislative action, the Commission's rule maybe subject to challenge for the reasons set forth above.

Contributions from Family Members

The new law also restricts the scope of an exception that had allowed unlimited contributions to be made to a candidate from members of the candidate's family. The Act has provided that the contribution limits under the Act do not apply to contributions made to the candidate's campaign from the candidate or members of his or her "immediate family." In a 1995 advisory opinion, the Attorney General interpreted the phrase "immediate family" to mean "spouse and children."(fn13) In the new version of the Act, the phrase "immediate family" has been replaced with a new term, "member of the family," which has been defined...

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