Secret recording, unpaid loan stir race for Georgia governor
Accusations of ethical lapses and incompetence are raising the temperature of Georgia's heated race for the Republican nomination for governor.
Lt. Gov. Casey Cagle faces Secretary of State Brian Kemp in a GOP primary runoff July 24. Allegations questioning Cagle's ethics and Kemp's competence have already made for a turbulent campaign.
Cagle, the GOP front-runner, was caught in a secret recording released last week candidly acknowledging he'd backed what he called a "bad public policy" for political gain. Then The New York Times reported Thursday that Cagle in 2008 bought an Atlanta condominium from a lobbyist for $97,000, a price 24 percent below its appraised value.
Kemp said the recording represented "everything that's wrong with politics." But Kemp's tenure as Georgia's top elections official and his reputation as a businessman have also come under fire.
Cagle ran a TV ad branding Kemp "incompetent" and "untrustworthy" over a 2015 incident in which Kemp's office inadvertently released the Social Security numbers and other information of millions of Georgia voters on disks sent to media and political party officials.
And Kemp is facing scrutiny for his role in Hart AgStrong, a company that owes $1.6 million to farmers who provided it with seed for making canola and sunflower oil. A financier suing the company says he's owed $500,000. He told the Atlanta Journal-Constitution Kemp requested the loan.
Cagle and Kemp were the top finishers in a five-way primary May 22 for the Republican nomination to succeed term-limited GOP Gov. Nathan Deal. Georgia hasn't elected a Democratic governor since 1998, so the stakes are high for Republicans in this deep-red state.
"Hits are made harder, it gets nastier and things become more vicious in the runoff," said Charles Bullock, a political science professor at the University of Georgia.
The covert recording was made after the primary by Cagle's former gubernatorial rival Clay Tippins. During a private conversation, Cagle said he had supported a measure to nearly double the limit Georgia places on a tax credit for private school scholarships, hoping to deprive another rival of support from an advocacy group.
Critics say the scholarship program diverts money from public schools. On the recording obtained by the Atlanta newspaper and WSB-TV, Cagle tells Tippins: "Is it bad public policy? Between you and me, it is. I can tell you how it is a thousand different ways."
Since the recording came to light, Cagle has said raising the tax-credit limit to $100 million a year was the right move because it expanded education choices.
"The words I used in that secret recording don't reflect how I feel about this historic legislation," Cagle said in a statement to The Associated Press.
Meanwhile, Cagle acknowledged buying a high-rise condo ten years ago from Terry Hobbs, a lobbyist for natural gas marketer Scana. Cagle said his sons lived in the condo while they attended Georgia State University in Atlanta. He insisted the below-appraisal price was fair considering the deal was closed during a recession that sent real-estate values tumbling.
"The condo lost value for years after that purchase — dropping $50,000 according to the county," Cagle campaign manager Scott Binkley said in a statement. Binkley said no political favors were sought or given between the lobbyist and Cagle.
Kemp has also been defending himself after Cagle launched an ad on the voter information leak, featuring a woman portraying an elderly voter who says: "Shame on you, Brian Kemp."
Kemp spokesman Ryan Mahoney said Kemp immediately recall the disks containing voters' information and none of it got compromised.
"He protected our personal information, fired the person responsible, and implemented new security measures to prevent a future occurrence," Mahoney said.
Regarding the financial struggles of Hart AgStrong, which has plants in Georgia and Kentucky, Kemp said he's an investor with no direct involvement in the company's operations. The Atlanta newspaper reported Kemp owned roughly 25 percent of the firm in 2010. His campaign says his stake is now 8 percent.
"I've been a business person for 30 years. I started my own companies, I've invested in others. This is one that's just struggled," Kemp told the Atlanta newspaper. "The company is working hard to resolve that issue."
The newspaper said state records show the business owes Kentucky farmers $1.6 million. Georgia financier Rick Phillips says he loaned the company $500,000 after Kemp personally approached him in January 2016. He says the loan went into default in May 2017 and he filed suit.
"I trusted Brian," Phillips told the newspaper. "But how can I trust him to run a state when he can't handle his business?"
The GOP infighting could ultimately benefit Stacey Abrams, who won the Democratic gubernatorial nomination last month. Abrams was quickly endorsed by her sole primary opponent, while Cagle and Kemp continue to battle on the GOP side.
"It is going to be crucial for Republicans to come together after the runoff and unify," said Kerwin Swint, a political science professor at Kennesaw State University. "Whether they can do that sufficiently is an open question."