Alabama’s current state and local elections have brought renewed attention to campaign finance laws as many races see increased spending and donations. During this election cycle, the Alabama House of Representatives has been working to boost transparency in campaign finance by requiring all campaign finance reports to be filed electronically in a searchable database and prohibiting certain public officials responsible for an election to solicit donations. Amidst this record funding and change in laws, allegations against Super PACS and straw donors have ramped up, as well as concerns about the number of single-candidate PACS.

In the United States, a straw donor is a political donor who illegally uses another person’s money to make a political contribution in their own name. To combat this practice, the Campaign Legal Center (CLC) files complaints urging the Federal Election Commission (FEC) to investigate potential straw donors and other campaign finance violations.

On June 2, 2022, the CLC filed a complaint alleging Free Market, LLC was functioning as a straw donor to give a $250,000 contribution to Alabama Conservatives Fund, a single- candidate Super PAC exclusively supporting Katie Britt of Alabama, a U.S. Senate candidate who has significantly out-fundraised her opponents. According to the CLC, the contributors gave their political donation through Free Market in order to hide their identity. The CLC stated “It is deeply concerning that an LLC can be created and – despite no physical address, no public website or social media presence, and no mention by the Better Business Bureau or other business directories – used by actors seeking to influence our elections with vast sums of money, without even publicly attaching their names to their political spending.”

The CLC also alleges a federal contractor made an illegal donation to Katie Britt’s single-candidate Super PAC. The United States has a ban on federal contractors making political donations to protect against a “pay-to-play “system in which wealthy parties are rewarded with government contracts for their political donations. The CLC claims Medical Place, Inc. violated this ban by donating $100,000 to the Alabama Super Pac while actively negotiating or performing federal contracts.

Similarly, Alabama authorities are investigating campaign donations received by Green County Sheriff Jonathan Benison. According to Alabama Secretary of State Jon Merrill, his office reviewed campaign finance filings related to Benison and found “some laws have been violated” and he intends to pass all evidence to the Alabama Attorneys General’s Office for an investigation.

Jonathan Benison received campaign donations from The Citizens For Lawful Government PAC formed by James Liddon, an attorney that has represented Benison in the past. The Citizens For Lawful Government has only taken donations from three sources: a business owned by accountant Donald Wood, The Palace Casino located in Green County, and TS Police Support League, Inc., the primary charity supported by the Palace, a tax exempt corporation registered under  I.R.C. §501(c)3 that is not permitted by law to make political contributions. The Citizens For Lawful Government functions as a single-candidate PAC for Jonathan Benison, raising legal red flags because of Benison’s relationship with casinos.

In Alabama, a casino must meet certain regulations and affiliate with a charity. It is the responsibility of the Sheriff, in this case, Benison, to authorize the charities and oversee the games. The casinos and charities of Greene County, including The Palace Casino, report their earnings and donations to Sheriff Benison, who in turn ensures the casinos are following the law. All of this raises legal concerns and substantial conflicts of interest for Sheriff Benison.

Finally, Alabama Governor Candidate Yolanda Flower’s campaign missed a step in the finance filing process and is now facing penalties. Flowers asserted it was a simple mistake and her team worked to fix the problem. Secretary of State John Merrill stated, “Our team will evaluate where the misconduct has occurred… They will assign penalties, fines, and fees. This individual will be paying those for some time to come because the accruement of those will be significant.”

With no signs of political spending slowing down, and as we approach November elections, Alabama should continue to monitor the sources of campaign funding and compliance with campaign finance laws. Any potential illegal activity can have significant impacts on the trajectory and outcomes of political races throughout the state.

To discuss this further, please contact:

Denzel E. Okinedo (205) 458-5278 or dokinedo@burr.com