Rep. Sam Whitson is holding off on a comprehensive ethics reform bill until 2022 in an effort to improve the legislation, even with an FBI investigation pending.

“I see this as an opportunity to make it even better and stronger,” Whitson, a Franklin Republican, said Monday.

The Senate version of the House Bill 1201 carried by Sen. Ferrell Haile, R-Gallatin, was referred to the first calendar of 2022 in the Senate State and Local Government Committee, which had closed for this year. The Senate was prepared to reopen the committee if Whitson’s bill continued moving in the House committee system where it received approval last week in the Elections and Campaign Finance Subcommittee.

Rep. Sam Whitson, R-Franklin (Photo: Tennessee General Assembly)
Rep. Sam Whitson, R-Franklin (Photo: Tennessee General Assembly)

But Whitson, a retired Army colonel, said Monday he still has about three sections of the legislation he wants to work on to bolster the bill instead of forging ahead with it before the end of this year’s session, which is expected to end in two to three week. A delay will give “all parties” more time to review a “complex” piece of legislation, said Whitson, who is carrying the bill for House Speaker Cameron Sexton, R-Crossville.

One change could affect the financial reporting threshold for those in state government doing campaign services, for instance. Clarification also could be made on terms for Registry of Election Finance members

“We have been working with Rep. Whitson on campaign finance legislation, and we were happy to see it pass out of subcommittee. This is an issue that is important to both our members, as well as the citizens of Tennessee, and we look forward to additional discussion on this potential solution in the future,” Sexton said in a Monday statement.

This is one of two bills Sexton and Lt. Gov. Randy McNally are sponsoring in the wake of an FBI probe into House members, likely stemming from questions about legislators doing political consulting work for colleagues and using mysterious, new vendors for campaign mailers and other work.

If FBI agents show up again at the Cordell Hull Building or State Capitol, the ethics campaign bill could gain more momentum.

In early January, federal agents raided the homes and offices of former House Speaker Glen Casada, R-Franklin, Rep. Robin Smith, R-Hixson, and Rep. Todd Warner, R-Chapel Hill, as well as Casada’s former chief of staff, Cade Cothren. Three other House staffers are on paid leave pending the outcome of the investigation.

Rep. Glen Casada, R-Franklin, photographed at his desk in the Tennessee House of Representatives chambers Jan. 12. (Photo: John Partipilo)
Rep. Glen Casada, R-Franklin, photographed at his desk in the Tennessee House of Representatives chambers Jan. 12, is being investigated by the FBI. (Photo: John Partipilo)

The feds haven’t said exactly what they’re investigating, but much of the focus is on Warner’s 2020 campaign against former Rep. Rick Tillis, a Casada political foe, and the use of Phoenix Solutions. Phoenix is a campaign vendor that shared the same postal code for mailers as Dixieland Strategies, a new company used by Warner, and a new PAC called Faith Family Freedom Forum. Casada and Smith did campaign work for lawmakers, and Smith steered several lawmakers toward Phoenix Solutions.

The Registry of Election Finance is auditing Warner’s use of Dixieland Strategies after a Tillis campaign volunteer alleged potential illegal coordination between the Warner campaign and the PAC.

Another piece of legislation sponsored by Sexton, HB1040 (SB798) is scheduled to be considered on the House floor Thursday. The Senate version was approved unanimously by the Senate State and Local Government Committee last week. 

It would prohibit lawmakers from doing campaign work for colleagues, but it got stuck in House floor debate earlier this session over potential restrictions on legislators who hold state contracts. Initially, it would have allowed those who contract with the state to continue doing so, but some lawmakers said those types of contracts should end.

Whitson’s bill would force legislators who do campaign work for fellow lawmakers to disclose that information. 

It also would require some nonprofit organizations to register as political action committees and file campaign reports with the Registry of Election Finance. Specifically, 501(c)4 organizations under the federal tax law will have to register if they spend more than $5,000 on politically-motivated communications during the two months before an election.

Those entities are now allowed to raise and spend unlimited amounts without disclosing the source of the money or how it is spent. They don’t have to register as a PAC as long as their communications don’t say vote for or against a certain person.

In addition, Whitson’s bill would increase reporting requirements close to Election Day and prohibit the use of PAC money to pay off penalties for campaign finance violations.

New reporting periods would be established for itemized contributions and expenditures, requiring all candidate contributions to be reported, including the full name, address, occupation and employer of contributors. PACs would be included in that requirements, along with in-kind contributions.

All checks, receipts and other documents dealing with campaign expenses would have to be kept for two years.

Whitson’s bill would force legislators who do campaign work for fellow lawmakers to disclose that information. Lt. Gov. Randy McNally has called the process a form of money laundering.

Candidates would be able to file reports electronically for contributions and expenses, with a minimum of $2,500, during the 10-day period before elections. Moves have been made in the last two years to allow candidates to avoid reporting during that period.

Another section requires all candidates and PACs to keep their campaign and PAC money in a separate, designated bank account that prohibits commingling of the funds for personal business. Previously, that was an administrative rule and the Registry of Campaign Finance couldn’t administer penalties for an infraction.

The bill would prohibit the Registry of Election Finance from accepting a settlement exceeding $25,000 unless it is done at a regular or special meeting called by the chairman. Special meetings would require 24-hour notice to be given. The executive director of the Bureau of Ethics and Campaign Finance would be able to approve settlements of $12,500.

Registry members would not be allowed to serve as elected officials for one full year after stepping down from the board or serve as chairman of a political party chairman or lobbyist or participate in an election campaign.

The bill would limit Registry of Election Finance members to one term, in an effort to end hold-over appointments.