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5 Lancaster alcohol supporters could face fines from 2008 wet-dry election

Four Garrard County residents and a Frankfort man unknowingly violated state campaign finance law in the days leading up to a 2008 wet-dry election in Lancaster, according to a preliminary staff report to the Kentucky Registry of Election Finance.

Although no criminal intent is evident among the five, they could face civil fines.

The five people are Donna Powell, a former Lancaster city council member and former acting Lancaster mayor; Bob Noe and Billy Pendleton of Lancaster; Bobby Ballard of Paint Lick; and Roy Watterson of Frankfort. Documents obtained by the Herald-Leader say Noe, Ballard and Pendleton violated the law by contributing more than $50 in cash to Garrard Development Group, a corporation formed for the purpose of supporting legalized alcohol sales. Noe gave $1,000, Ballard gave $500 and Pendleton gave $5,000, according to an election finance statement filed a year after the referendum. A recommended order also says that Watterson and Powell violated the law by:

■ Failing to timely register Garrard Development as a political issues committee.

■ Failing to timely file required election finance statements.

■ Receiving cash contributions in excess of $50 from Noe, Ballard and Pendleton.

■ Failing to provide the registry with a full report regarding contributors.

■ And failing to provide the specific purpose for $15,500 in expenditures paid to Emmons & Co., a Richmond political consulting firm. The complaint filed by Garrard residents Dick Brunson and David A. Wilson in September 2008 questioned who paid for campaign literature, a telephone survey, free voter transportation and exit polling in the Aug. 19, 2008, wet-dry vote.

Voters approved the sale of alcohol in Lancaster by a vote of 656 to 550. Before the vote, alcohol sales were prohibited in Lancaster, but the city now has package sales and alcohol sales in a few restaurants, including a new Godfather's Pizza that came to town since last summer's election.

Under state law, a political issues committee of three or more people that advocates or opposes a public question must file reports with the Registry of Election Finance. Door hangers urging voters to vote "yes" for alcohol sales included the phrase "Paid for by Garrard Development Group."

Brunson and Wilson wanted to find out the identity of members of the Garrard Development Group.

Watterson incorporated the organization on July 1, 2008, and dissolved it on Aug. 25, 2008, only six days after the election.

Watterson stated in an affidavit that "it was suggested" to him that forming the corporation and having the money flow through it was the proper method to raise and spend funds to support the ballot issue to legalize alcohol sales. Watterson doesn't identify who suggested that method, but he states in the affidavit that "there was never any criminal intention to deceive anyone."

The report says that if any of the parties has information as to who provided "egregious advice" that led to circumventing campaign finance law, then he or she is urged to file a complaint with the registry.

"To expose the true actor behind this scheme will prevent additional persons from being misled into this same ill-advised course of action," the report says.

The registry report says "there is no question" that Garrard Development Group was a political issues committee and should have registered as such when it formed. Watterson has since registered the committee and filed the required campaign finance report.

The preliminary report still doesn't answer why Watterson, a state employee who lives in Frankfort, became involved with a local-option election in Garrard County.

Watterson did not return phone calls, and his attorney, John Rogers of Glasgow, declined comment on a matter pending before the registry.

Powell, the former Lancaster mayor who served as volunteer treasurer for Garrard Development, said she never met Watterson.

Powell, who now serves as a volunteer assistant to Garrard County Judge-Executive John Wilson, said she didn't know who suggested a corporation as a means to finance the pro-alcohol campaign. She said the corporation was formed to protect contributors to the cause of legalized alcohol from ridicule or retribution in a small town.

"The only reason for any secrecy about it at all is that most of the people who contributed ... simply did not want their neighbors or their preachers or maybe their spouses to know they were in favor of selling alcohol," Powell said. "As for myself, I'm not particularly pro-alcohol, but I am pro-Lancaster and Garrard County like I have always been. ... I felt like it could be a catalyst to give a boost to economic growth here, and I still feel that way."

Ballard said he didn't know there was a $50-in-cash limit to a political issues committee.

"Why are they kicking a dead horse now?" Ballard said. "It's been over for a year. I never was so surprised. I really do not understand this."

Ballard said the "development group" was simply people who wanted to legally contribute to a cause they supported.

Noe said he wasn't aware of the cash limit, either.

"If I had been aware of that, I would have written a check. It's that simple," Noe said.

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