Lawmakers push ethics, campaign finance reform bill in wake of federal investigation
Lawmakers are proposing a new set of ethics and campaign finance reforms after a former legislator pleaded guilty to wire fraud in an ongoing federal investigation looming over the former House speaker.
The legislation would enhance several disclosure laws around campaign service companies and political action committees with the hope of identifying fraudulent activity more quickly.
"It's a good bill but doesn't solve all our problems," said Dick Williams, chairman of Common Cause Tennessee. "I'm not sure there is a way to solve the issue of someone lying, but the bill tweaks a lot of what we already have in law."
Republican leadership in the Senate and House are sponsoring the bill, a rarity usually reserved for priority legislation.
The legislation closely follows increased scrutiny on activities from former Rep. Robin Smith, R-Hixson, Rep. Glen Casada, R-Franklin, and Casada's former top aide Cade Cothren.
Smith pleaded guilty to a federal wire fraud charge for her involvement with the shadowy firm Phoenix Solutions last month.
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Smith's charging documents alleged Casada and Cothren were involved in a kickback scheme that netted business from multiple lawmakers and House legislative services.
Neither have been charged in the case.
On March 28, several House members and legislative staff testified to a grand jury.
Casada appeared at a Williamson County Policy Talks forum on March 2, where he declined to answer questions from The Tennessean about the investigation.
"Don't ask me any questions about it; y'all know I can't talk about it," Casada said.
Cothren hasn't returned messages seeking comment.
Providing additional safeguards to campaign finance law
The bill would require lawmakers to disclose any compensation they received from a company providing campaign services and require the company to disclose its payouts. These provisions directly respond to activities brought up in Smith's federal wire fraud case.
Lawmakers involved with the Republican's Tennessee Legislative Campaign Committee said Smith used her position to advocate for spending money with Phoenix under false pretenses. Prosecutors alleged Smith and Casada helped Cothren shield his identity from lawmakers while running the firm, as he had previously resigned from the General Assembly amid a racist and misogynist texting scandal.
The campaign committee spent around $40,000 with Phoenix Solutions.
The Senate version passed a key committee on Tuesday, while the House bill is likely to get a hearing in committee next week.
Lt. Gov. Randy McNally, R-Oak Ridge, was confident the bill would pass before the end of the legislative session.
"While no new legislation can prevent a bad actor from being deceitful or dishonest, I believe this bill will increase openness and accountability where it is badly needed," McNally said in a statement.
Bill responds to how Cothren and Casada skirted campaign finance law
Over the past two years, Cothren and Casada have been at the center of various campaign finance investigations by the Tennessee Registry of Finance, including a recent probe into the pair's involvement with the Faith Family Freedom Fund.
The fund's treasurer testified she opened the political action committee at Cothren's request but had no further involvement in its operations. The treasurer was dating Cothren at the time of its creation.
The proposed legislation would require the treasurer and officers of a political action committee to submit a valid government ID and make anyone who directly controls expenses from the committee personally liable for potential civil penalties.
The registry previously fined Casada in 2020 for failure to adequately retain receipts for roughly $100,000 in expenditures.
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The fine was $10,500, but existing law allowed Casada to pay it with his political action committee, CAS-PAC.
The House version of the bill prevents political action committees from paying such a fine.
The rest of the bill involves various requirements to make the registry board and its meeting more transparent, increase punishments to existing campaign law and require audits of non-profit political groups spending $5,000 before an election.
Melissa Brown contributed to this report. Adam Friedman is The Tennessean’s state government and politics reporter. Reach him by email at afriedman@tennessean.com.
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This article originally appeared on Nashville Tennessean: Lawmakers push campaign finance reform in wake of federal probe
