Nonprofit Founded by Stacey Abrams Acknowledges Secret Support for Her 2018 Campaign

Nonprofit Founded by Stacey Abrams Admits to Violating State Campaign Laws

A nonprofit organization established by Stacey Abrams, a prominent Georgia Democrat, acknowledged on Wednesday that it had breached state regulations by failing to disclose its campaign efforts on her behalf during her 2018 gubernatorial bid. This revelation came during a meeting of the state’s ethics commission, marking a significant turning point in a prolonged legal battle between the organization and state authorities.

The New Georgia Project, a nonprofit focused on voter registration, admitted that it had financially supported the candidacy of Ms. Abrams by funding campaign materials, including fliers and door-to-door canvassing aimed at persuading voters to support her and other Democratic candidates. At the helm of the organization during that election cycle was Raphael Warnock, who later became a U.S. Senator from Georgia.

Federal law prohibits tax-exempt charities from engaging in political campaigns; however, this case primarily revolved around violations of state law. The New Georgia Project recognized that its activities constituted campaigning and should have resulted in its registration as a political committee with the state. In a concurrent admission, another affiliated nonprofit, the New Georgia Project Action Fund, acknowledged similar shortcomings regarding its compliance with the law.

In light of these admissions, the two nonprofits have agreed to pay a hefty fine of $300,000, which is noted to be the largest penalty in the history of the Georgia ethics commission, which has been operational for 38 years. David Emadi, the executive director of the commission, commented on the matter, expressing satisfaction with the outcome of the long-standing investigation that initiated in 2019, following the commission’s first accusations against Ms. Abrams’s group.

During the ethics commission meeting, Emadi stated, “They’re now admitting everything we said was true,” underlining the significance of the organizations’ concessions. He highlighted that the nonprofits had requested to settle the penalty in two installments of $150,000, with the first payment due immediately and the second scheduled for one year later. The commission unanimously approved the resolution, commending the diligent work of its staff and the state attorney general’s office throughout the five-year pursuit of the case, which was characterized by the nonprofits’ reluctance to cooperate.

In the wake of the charges, a spokesperson for Ms. Abrams clarified in a statement that "Stacey hasn’t been involved in the organization’s work since she departed in 2017.” Meanwhile, a representative for Senator Warnock’s office asserted that although he led the New Georgia Project in 2018, “compliance decisions were not a part of that work.”

As the ethics commission deliberated, attorney David Fox, who represented the nonprofits, expressed a desire to move past the controversy. He acknowledged, “At a fundamental level, my clients understand and respect the commission’s decision on the facts of the law,” and characterized the agreement as a reasonable resolution of a long-standing dispute.

It is important to note that the ethics commission’s charges were directed at the nonprofits collectively and did not seek personal penalties against either Ms. Abrams or Mr. Warnock. Ms. Abrams initially founded the New Georgia Project in 2013 while serving as the minority leader in the Georgia House of Representatives. Although she later stepped back from her formal role, she maintained close ties to the organization’s leadership, and Mr. Warnock’s tenure as the executive director ended when he launched his Senate campaign in 2020.

The New Georgia Project has been recognized for its impactful efforts in mobilizing voters, notably playing a crucial role in the voter registration drives that helped shift Georgia’s political landscape in favor of Democrats during the 2020 elections. This effort contributed significantly to President Biden’s victory as well as the success of Senator Jon Ossoff and Warnock in a state that had long been considered a Republican stronghold.

Despite the recognized capacity of tax-exempt organizations to facilitate voter registration, federal tax law bars these entities from endorsing political candidates or urging voters to support specific individuals. However, the ethics commission noted that the New Georgia Project violated this statute in 2018 by endorsing Ms. Abrams and employing canvassers who promoted her candidacy by stating, “She’s the leader we trust to fight for us under the gold dome” at Georgia’s State Capitol.

The investigation revealed that the nonprofits collectively failed to report $3.2 million in expenditures related to their campaign efforts. Emadi described the total spending as the highest amount his commission had ever uncovered that was aimed at illegally influencing electoral outcomes in the state.

The Georgia ethics commission, which is composed of four Republicans and one Democrat, previously voted unanimously in 2022 that there was probable cause to believe the nonprofits had engaged in unlawful conduct, a decision that enabled the investigation to proceed. The recent admissions now raise questions regarding potential violations of federal tax laws that restrict tax-exempt organizations from endorsing candidates.

While the Internal Revenue Service, the agency responsible for enforcing such regulations, declined to comment on the case, the New Georgia Project’s admissions signify a major milestone in addressing the allegations against it. With the resolution of this dispute, both nonprofits are keen to divert their focus back to their foundational mission of engaging and supporting the electorate in Georgia.