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For two prominent Atlanta businessmen, the messy fallout from their involvement in the failed 2001 mayoral campaign of Robb Pitts is far from over. Mirant Corp. Chairman A.W. “Bill” Dahlberg and Winter Group Chairman Robert L. Silverman served as co-chairmen for Pitts’ campaign finance committee. Pitts, now a Fulton County, Ga., commissioner, lost to Shirley Franklin. Not only did they back the losing candidate, but the two executives’ stint at political activism landed them in court and in front of the State Ethics Commission. Last summer, Dahlberg and Silverman admitted in a letter to the state Ethics Commission that they “may have committed a technical violations of the Ethics in Government Act” when each wrote a $9,500 check on the eve of the 2001 election. Then, last fall, they became co-defendants, along with Pitts and two other campaign officials, in a suit brought by campaign workers who claim they collectively are owed $130,000. That Fulton State Court suit recently blossomed into a 97-page amended complaint that accuses the defendants of racketeering, money laundering, wire fraud, fraud, theft of services and theft by conversion. It names Pitts and four other campaign officials, including Dahlberg and Silverman, both individually and in their official capacities with the campaign. The suit claims all defendants are liable for the campaign’s debts because the campaign was an unincorporated political association and each defendant consented to, authorized or ratified the campaign’s obligations. Bickers v. Robb Pitts Campaign, No. 02VS038556G (Fult. St. Feb. 12, 2003). Neither Pitts nor his attorney Louis Levenson could be reached. Dahlberg and Silverman’s attorney, James A. Washburn of Atlanta-based McKenna Long & Aldridge, said while the amended complaint is longer and has more claims — all of which his clients deny — the underlying facts haven’t changed: The plaintiffs either advanced Pitts campaign money or had a contract with the campaign and didn’t get paid. JUST WANT ‘TO MOVE ON’ As for his clients, Washburn said they never had been involved with political fund raising before and didn’t realize their check-writing may have violated the law. They just want “to move on,” he said, adding, “That’s proving more difficult than they had initially hoped.” Dahlberg is the past chairman and CEO of Southern Company, the nation’s largest investor-owned electric utility. He has chaired the Georgia Chamber of Commerce and the Atlanta Chamber of Commerce. He has headed campaigns to raise money for Centennial Olympic Park and to attract the Super Bowl to Atlanta in 2000. Silverman’s company, the Winter Group, includes Winter Construction, a general contractor and construction management company; Winter Properties, a development company; and Winter Environmental, an environmental contracting firm. Winter Construction is renovating the Georgia State Capitol building and has recently been involved with the Midtown Heights development on Spring Street and the conversion of old warehouses on Means Street. Washburn has moved for a judgment on the pleadings on their behalf by making an unusual argument: Any judgment against them would violate campaign finance laws and would be illegal. Their argument is that since Dahlberg and Silverman have contributed the maximum amount the law allows to the Pitts campaign, any further “contributions” to help retire the campaign’s debt would be illegal. But plaintiffs’ lawyer D. Brandon Hornsby said neither executive is immune from liability in the case. “It would be the broadest immunity in the history of Georgia,” Hornsby said. “There has never been immunity for fraud.” The suit, filed by four former Pitts campaign workers, claims that Pitts spent more than $170,000 on the eve of election in a get-out-the-vote effort. The campaign hired vendors and campaign workers and promised to pay them, all the while knowing the money wasn’t available to do so, the suit says. CAMPAIGN NOT INCORPORATED Unlike many campaigns, Pitts’ was never incorporated. That leaves campaign officials such as Dahlberg and Silverman open for liability, the plaintiffs claim. Washburn said his firm routinely advises campaigns and recommends incorporation “for precisely this reason.” He said he’s never heard of anyone other than the candidate or the treasurer being sued. “You can imagine donors being concerned about being hauled into court,” he said. Plaintiff Melvin Collins claims the campaign authorized him to hire 400 to 500 people in the final get-out-the-vote push. The campaign gave him a $45,000 check the day before the election, which he was to cash and use to pay those workers. But the bank refused to honor the check due to insufficient funds in the account. The other three plaintiffs covered the check, believing that the campaign would have money to repay them the next day, according to the suit, but that didn’t happen. SUIT CLAIMS ILLEGAL DONATIONS Days before the election, Silverman and Dahlberg each wrote a $9,500 check made out to a campaign worker, Steven Weinstein, in what the plaintiffs call “a cash-for-check scheme,” according to the suit. The two businessmen, the suit says, wrote the checks in order to make illegal contributions to the campaign in excess of the $2,000 amount allowed by law. And, the complaint adds, they purposely wrote the checks for amounts less than the $10,000 threshold that would trigger federal reporting requirements for banking transactions. The plaintiffs call it money laundering, alleging that Silverman and Dahlberg made the checks out to Weinstein rather than cashing the checks themselves in order to disguise the nature, source, ownership and control of the funds. They wrote the checks to “a straw man who was given instructions to cash the check and provide the funds to Defendant Robb Pitts Campaign ’01,” the suit says. Washburn said his clients thought they were loaning money to the campaign. Weinstein had been asking for funds, he said, and was available to cash the checks. Dahlberg and Silverman didn’t understand that a loan is considered a contribution and that their loans weren’t permitted under the Ethics in Government Act, he added. Once they were threatened with the suit and hired counsel, Washburn said, they decided to take the matter to the Ethics Commission themselves. Washburn wrote a letter to the commission on Dahlberg and Silverman’s behalf June 14. The letter says the checks were a loan to Weinstein so he could pay campaign workers and both executives expected to be repaid by Weinstein a few days later, “once the Pitts Campaign could collect additional contributions with which to repay Mr. Weinstein.” Dahlberg and Silverman “understand that their actions may have violated the letter of the Ethics in Government Act. Rather than attempt to cover up their actions, they seek to resolve this matter and present it to the State Ethics Commission for resolution,” the letter says. The matter is pending before the Ethics Commission. The commission can levy fines of up to $1,000 per violation. WEINSTEIN: CHECKS NOT A LOAN Weinstein, in a deposition taken in the litigation, said the checks weren’t a loan to him. “I didn’t need the money lent to me. I had $20,000,” he said, adding that the checks “were to the campaign, not to Steve Weinstein. I never — I didn’t need any loans, and I didn’t need any of their money.” He said Dahlberg and Silverman’s letter to the Ethics Commission was “total 100 percent wrong” and that neither executive ever had asked him to pay back the money. Washburn said while the deposition transcript may suggest a conflict between Weinstein’s account and his clients’, “that is probably overstated.” He said everyone involved “understood the money was not for Weinstein’s personal use. It was for the campaign.” The two businessmen recently filed a motion for judgment on the pleadings, asking the court to dismiss them from the case. The plaintiffs may be entitled to sue the campaign and Pitts, Washburn writes in his brief, but “any action against Messrs. Dahlberg and Silverman should be dismissed in light of Georgia’s campaign finance laws.” The two executives worked on fund raising, the brief says, but had no authority to decide how the money was to be spent. Even if they were found to be “members” of the campaign and responsible for its debts, Washburn contends, “they cannot be held liable for the debts of the campaign beyond the amount they are permitted to contribute to the campaign under Georgia law.” They already have contributed the maximum allowed by law, he adds, and so can’t be responsible for any other campaign debt. If the court rules otherwise, Washburn writes, “it would create a major loophole in Georgia’s campaign finance laws.” Candidates could take excess contributions from donors, list them on the finance committee and then encourage vendors owed money to sue them, he writes. “The Campaign is the entity that allegedly owes all of the debts Plaintiffs have sued for, and to the extent the debts are appropriate the Campaign should be liable.” ‘CAN’T PAY ANYTHING ELSE’ In an interview, Washburn said while the plaintiffs complain about his clients’ loans to the campaign, that is exactly what the plaintiffs did in helping Collins. The bottom line, Washburn added, is that “my clients can’t pay anything else [to the plaintiffs]. They’re legally barred. If the court ordered them to do so, it would be effectively abrogating the Ethics in Government Act.” But Hornsby said the plaintiffs’ help to Collins was a different matter altogether. Collins was a vendor of the campaign who was led to believe funds were there to pay him, and was entitled to get financial help from others to cover his losses. “Dahlberg and Silverman were not a vendor. They were clearly trying to funnel money” to the campaign, Hornsby said. “These were two multimillionaires trying to manipulate the system.” In his response to Dahlberg and Silverman’s motion, Hornsby writes that the defendants want the court to rule that “political contributors who make illegal contributions … receive total immunity from all civil claims relating to their conduct as an agent of the political campaign receiving the illegal contributions.” That position, he adds, is “untenable as a matter of law and indefensible as a matter of public policy.” Hornsby argues that the law is well-settled that members of an unincorporated association are liable for the association’s debts. Illegal contributions can “never be used to create civil immunity in this case because, by Defendants’ own admission, such contributions must be returned,” he writes, adding that state ethics laws don’t create civil immunity for contributors.

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