Registry of Election Finance changes unlikely amid FBI probe

With an FBI investigation hanging over the Legislature, changes are improbable in the makeup of the Bureau of Ethics and Campaign Finance.

An idea to merge the Registry of Election Finance and Ethics Commission into one eight-member body is being floated in the Legislature, as reported by the Tennessee Journal. 

But it will meet resistance from key lawmakers and members of those panels.

Nashville attorney Tom Lawless, who chaired the Registry board for the past year, said he would testify in opposition to a merger with the Ethics Commission if the idea starts to move in the Legislature.

“I don’t think we need any organic changes in the creature. We need modernization and some study to make it more efficient and transparent. Those are today’s buzzwords, but they’re true,” said Lawless, an outspoken Republican on the Registry board.

Instead of structural changes, Lawless contends the Registry needs more money to hire outside auditors to check into legislators’ campaign finances when they run afoul of the rules. A modern reporting system is needed, as well, to simplify the process for candidates, he added.

The Registry recently completed a third audit of Rutherford County Mayor Bill Ketron showing he can’t account for more than $290,000 in three accounts. 

An April show-cause hearing is scheduled when Ketron, a former state senator who once pushed creation of the bureau’s executive director position, will be given the opportunity to explain the discrepancies found in his Senate, Quest PAC and mayoral campaign accounts.

The Registry has levied civil penalties totaling $80,000 against Ketron and could add to that amount in April. But whether it sticks with the penalty is hard to predict, and Ketron is likely to continue fighting the outcome in court.

The Registry board voted by email in early April 2020 – just as the COVID-19 pandemic started – to approve a settlement reached by the Attorney General’s Office with Democratic state Rep. Joe Towns of Memphis. Towns was allowed to pay $22,000 instead of $66,000 and qualify to run for re-election the day before the deadline. A Davidson County judge later found the Registry violated the Tennessee Open Meetings Act but took no further action because the board voted to confirm its initial decision after giving proper public notice.

With those types of substantial decisions frequently before the Registry board, a move to weaken its structure will be a tough task this year.

“I haven’t seen any traction that will happen. It’s been discussed over there. It’s been discussed even before I came,” said Bill Young, executive director of the Bureau of Ethics and Campaign Finance for about a year and a half.

Legislation to remove pre-primary and pre-general reports, which previously died in the 2020 session, is more likely to gain support in the General Assembly, Young said. But even that measure is likely to face a tough road, he added

“I think the timing is bad,” Young said.

In early January, just before the Legislature convened, FBI agents raided the homes and offices of three lawmakers, the office of another lawmaker and made four current and former staff members the subject of its investigation.

Lt. Gov. Randy McNally, who wore a wire for the FBI in the 1980s as part of Operation Rocky Top, and House Speaker Cameron Sexton are expected to frown on anything that could be seen as weakening either the Registry board or Ethics Commission.

They have filed legislation setting parameters for the Registry board and Ethics Commission to follow for reaching settlements exceeding $25,000. But spokesmen for both leaders say it is a caption bill or placeholder for legislation that could be filed later in the session.

Asked about a Registry-Ethics merger, McNally spokesman Adam Kleinheider said, “While he would need to see bill language before definitively opining, Lt. Gov. McNally is not favorably disposed toward that idea conceptually.”

Meanwhile, House Majority Leader William Lamberth and Senate Majority Leader Jack Johnson have filed their own caption bill in case action is needed on the Registry board or Ethics Commission. 

“There’s lots of ideas flying around every year about reporting times and structure and making sure we have as much transparency out there as we could possibly put into the system. Every year there’s conversations on that, and I have a caption bill that would fit if we decide to make some improvements” on the Registry board or Ethics Commission, said Lamberth, a Portland Republican. “But there’s absolutely nothing at this juncture, there’s no amendment to that, there’s no structure to that, there’s no specific plans on that.”

Campaign finance reporting is likely to be the focal point, too, of FBI agents who are looking at information gathered from former House Speaker Glen Casada, Republican state Rep. Robin Smith of Hixson and Republican state Rep. Todd Warner of Chapel Hill

Warner, a first-term legislator, hired a campaign mail vendor out of Alabama that used the same postal code as a dark-money group that ran mailers critical of his opponent, incumbent Rick Tillis of Lewisburg, the Republican primary. Tillis filed a complaint against Warner, but the Registry board dismissed it.

Coordination between candidates and independent organizations is illegal. But Warner said the use of the same postal codes was a “coincidence.” 

He failed to file his final campaign finance disclosure and reportedly sent a letter to the Registry bureau saying the FBI had left his information in disarray. He filed the report late last week, though, after the Registry board said it couldn’t give him any slack for the FBI raid.

The FBI could be using that type of campaign finance information to make an even broader probe of the Legislature.

Agents started looking into the House in 2019 after Casada held the vote board open for 45 minutes to gain passage of Gov. Bill Lee’s education savings account bill. Lawmakers said they were approached by Casada’s chief of staff, Cade Cothren, who is a subject of the probe, asking what it would take to gain their vote.

Some onlookers, though, believe the FBI started looking into the Legislature five years ago when former Rep. Jeremy Durham was expelled following a report showing he made sexual advances to 22 women in the Legislature.

The Registry board levied civil penalties totaling $450,000 against Durham for inappropriate expenditures, including buying sunglasses and lending money to a gambling figure. In 2019, a judge lowered that amount to $100,000.