Why on Earth is an Alabama PAC acting as a private lender?

  Money has a gravitational effect on politics. A little can tilt campaigns and policy. A lot warps the democratic process like a bowling ball dropped on a bed.

  So campaign finance laws show how much our leaders care about a level playing field. Strong ones reveal the flow of money and restrict the ability of the richest 1% to dominate the conversation. They keep the public in mind.

  And weak ones?  Let’s take a look at last week’s political headlines in Alabama.

  Alabama Political Reporter on July 14 reported that Katherine Robertson, a longtime aide to Alabama Attorney General Steve Marshall who is seeking the office for herself, got a $1 million donation in June from First Principles Inc.

  What is First Principles Inc.? Damned if anyone knows. It’s a dark money organization with hardly any paper trail. If you want to know who’s funding it, too bad.

  And it’s legal for First Principles to spread its wealth around, which Robertson’s campaign repeatedly noted in response to questions from APR. But voters still have a right to know who likes Robertson so much they’ll give her $1 million — and more importantly, why they like her so much.

  Then there’s First Liberty Building & Loan.

  As Alander Rocha reported on July 17, Georgia’s Edwin Brant Frost IV, the owner of First Liberty and the subject of a SEC indictment alleging Frost ran a $140 million Ponzi scheme, gave about $132,000 to three elected Republican officials in Alabama over the last four years.

  Those officials — Alabama State Auditor Andrew Sorrell, who got about $71,000 in donations; Alabama State Board of Education member Allen Long, who got $40,000, and Rep. Ben Harrison (R-Elkmont), who got about $21,000 — are not accused of being involved in the scheme. Sorrell and Harrison both told Rocha they would return the contributions. (Long did not respond to questions from the Reflector.)

  But then there’s the matter of the Alabama state auditor’s PAC lending Frost’s company $29,000 last year. Sorrell says he was misled like Frost’s other investors are alleged to have been.

  Under Alabama law, PACs can make loans as part of a broader purpose of “influencing an election.” I look forward to hearing if and how Frost’s activity met that definition.

  But beyond that, why on Earth is a political action committee allowed to make a loan to a private company? A PAC is not an FDIC-insured lender. This is an entity that gets contributions for the express purpose of electing a candidate or lobbying for a public policy. How would you like the money you spent to win an election ending up in the hands of a third party accused of fraud? Whose business activities are not subject to disclosure laws?

  But there aren’t many restrictions on campaign finance spending in Alabama anyway. PAC-to-PAC transfers are banned in the state, but enforcement of that ban is situational at best. Marshall escaped a referral in 2018 for accepting money from a federal PAC for his reelection campaign that year.

  And I’ve seen many other entities work to conceal their efforts on behalf of candidates. The Alabama Education Association in 2014 routed millions of dollars to out-of-state entities, which then routed millions of dollars to the association’s preferred Republican candidates without AEA’s name on them. Political consultants can also distribute one donor’s cash among multiple PACs and send the money on to candidates without any clear sense of who or what is supporting them.

  Our campaign finance laws are written and enforced not to ensure voters have a clear view of the motives and interests of those seeking office, but to conceal that from us. They create a frictionless path between the wealthy and their candidates.

  Which reflects the design of Alabama government. It allows the powerful to act with impunity and never have to fear the verdict of the ballot box or the censure of popular feeling. Lawmakers care far more about “stakeholders” — their term for powerful interests — than voters.

  A representative government would work from the understanding that the wealthy are a very tiny sliver of the population, with unusual access to resources and priorities that could harm the rest of us. There would be a basic understanding that money and the public interest are not the same. That voters need to understand who’s using money to influence elections.

  The Sorrell loan seems so far outside the intent of campaign finance, even in Alabama, that I’d like to believe someone will try to ban it next year. It’s a layup that won’t affect the ability of incumbents to draw down cash.

  I’m far less optimistic that we’ll see more enforcement of existing laws. And even less effort to stop anonymous people from influencing our elections.

  But why would lawmakers try? They’re working for the donors, and they work to let the donors do what they want. The state’s campaign laws reflect a basic truth: we have elections in Alabama, but not democracy.

  About the author: Brian Lyman is the editor of Alabama Reflector. He has covered Alabama politics since 2006 and has worked at the Montgomery Advertiser, the Press-Register, and The Anniston Star. A 2024 Pulitzer finalist for Commentary, his work has also won awards from the Associated Press Managing Editors, the Alabama Press Association, and the Robert F. Kennedy Center for Human Rights.

  This article was published by Alabama Reflector, which is part of States Newsroom, the nation’s largest state-focused nonprofit news organization.