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Ga. candidate took $50K in prohibited donations

Eugene Yu drops Senate campaign to run for 12th District House seat

Ga. candidate took $50K in prohibited donations

Ga. candidate took $50K in prohibited donations

Eugene Yu

SAVANNAH — Running his first race for Congress, Eugene Yu found a generous supporter in his friend and fellow Augusta businessman Wayne B. Brown. Last summer and fall, Brown and his company gave the Republican candidate $54,500 for his campaign.

    The problem is that's far more cash than the $5,200 limit one person can legally give a single candidate seeking federal office in the upcoming primary and general elections. Yu had to refund $50,000 of the money given to his U.S. Senate campaign. He recently abandoned that race to run for Georgia's 12th Congressional District seat currently held by Democrat John Barrow.

    "This is the first time I'm running in an election," Yu said in a phone interview Monday. "If anything, it was an honest mistake."

    Fundraising reports filed with the Federal Election Commission show Yu's campaign waited three months to disclose any of the prohibited contributions. Instead, the campaign first reported most of the cash as a $45,000 personal loan of Yu's own money.

    "It looks more sketchy because it raises a question of whether or not the candidate was trying to conceal the contribution," said Sheila Krumholz, executive director of the Center for Responsive Politics, a nonprofit and nonpartisan organization that tracks money in politics. "He took this large sum of money and passed it off as money from his own pocket."

    Both the candidate and his donor said they weren't trying to deceive anybody. They said Brown owed Yu money for his share of a real-estate investment they have together in Augusta,and the money was deposited into the candidate's campaign account to help his largely self-funded race.

    "Eugene had already paid for the property so I was reimbursing him for my share," Brown said in an email Monday. "Since it was his money, it was deposited in the campaign account as a contribution from him which is correct but not transparent."

    A political newcomer, the 58-year-old Yu of Evans remains an active player in the 2014 elections even after pulling the plug on his Senate campaign. Last week, Yu signed up for what's now a five-way primary race for the GOP nomination to oppose Barrow, of Augusta, in the 12th District.

    Yu came to the Augusta area as a teenager when his South Korean parents immigrated to the U.S. He's a former military policeman and ex-sheriff's deputy who's now retired after starting a now-defunct company that refurbished military trucks returning from overseas deployments. Yu also served as president of a major Korean-American lobbying association before launching his first political campaign last year.

    Yu's newcomer status made him a longshot in the race for Georgia's open Senate seat, where the crowded Republican field includes three sitting congressmen. But Yu also poured more than $447,000 of his own money into the Senate race. A continued willingness to self-finance could make him tough to ignore, even as a latecomer, in the GOP primary for Barrow's seat.

    Still, Yu hasn't been terribly successful raising money from supporters. In the last six months of 2013, the candidate raised just $121,475 from outside donors. The $50,000 Yu ended up returning, after reporting the money as prohibited contributions, equaled 41 cents of every dollar he raised.

    Brown owns an Augusta company, WayneWorks, that manages a range of business ventures from real estate to custom embroidery services to exotic charter-boat vacations. Yu says he and Brown have been friends for 15 years or more. Spending reports show Brown is also the campaign's landlord, renting Yu space at his company's office park for $100 a month.

    Yu's fundraising reports show Brown gave his Senate campaign $4,900 in July. Brown's wife chipped in another $5,200. Both contributions were within legal limits. Yu's campaign disclosed them in its quarterly report filed Oct. 14.

    The same fundraising report says Yu loaned the campaign $202,000 of his own money during the same quarter from July through September. Three months later, his campaign filed an amended report that reduced the amount of Yu's personal loan by $45,000.

    What happened to that money? It showed up in the amended report as previously undisclosed contributions from Brown and his company. Brown gave the campaign $30,000 in two different payments in August and September — putting him well past the legal donation limit. A $15,000 contribution attributed to WayneWorks was received by Yu's campaign Aug. 19. Corporations are prohibited from giving money to individual candidates.

    Yu's last Senate fundraising report, filed Jan. 30, shows Brown gave the campaign a final $5,000 in October— bringing the total amount of prohibited money to $50,000. The same report says Yu refunded the money on Nov. 18, nearly two months before any of the excessive donations were disclosed to federal regulators.

    Yu's campaign could face fines if FEC auditors find there were fundraising violations. The FEC gives candidates grace periods of up to 60 days to refund or otherwise make right excessive or prohibited contributions. Yu's campaign had most of its money from Brown for longer than that. The FEC doesn't disclose the status of investigations until they're resolved.

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