State News

September 28, 2013

Firm owned by Deal relative finds success, critics

When Denise Deal launched a fundraising firm in 2010, her biggest client was her father-in-law, Nathan Deal, who was caught in a fierce Republican primary for governor.

Nathan Deal eventually won, and his daughter-in-law was credited with helping his campaign raise $8.3 million. In the years since, Denise Deal has become a player in Georgia politics, signing up more than two dozen candidates including two congressmen, three Georgia Senate leaders and a host of state lawmakers to Southern Magnolia Capital, a firm she co-owns.  

The governor has remained her biggest client, and their business arrangement has prompted questions about whether the governor’s family is benefiting from his office and whether the firm opens doors to the state’s top elected official. It’s clear that campaign payments to a candidate’s family member are legal, although criticism is likely to continue with Denise Deal signed up as the governor’s fundraiser for his re-election campaign.

“For the public, it raises eyebrows anytime a family member is getting paid by a campaign,” said William Perry with Common Cause Georgia, a government watchdog group. But Perry added Denise Deal’s expanded clientele has helped with perceptions: “She has worked actively as a fundraiser for other candidates, and that adds a lot of legitimacy to what she does.”

Denise Deal’s firm has received roughly $791,000 in payments from 27 state and federal candidates since 2010, with nearly half coming from the governor’s campaign or a political action committee with ties to him, according to financial reports. The money includes fees and commissions, but also likely tens of thousands of dollars in reimbursements for event expenses for which the firm paid upfront costs.

Reporting descriptions vary by candidate and sometimes lump together consulting fees and event expenses, so it’s not possible to sort out exactly how much revenue Southern Magnolia Capital has pulled in. Disclosure isn’t required for the privately held company.

In an interview, Denise Deal said the firm’s revenue is far lower than the total payments reported and that she and her business partner have worked hard to establish a record of success.

“What we set out to accomplish for the clients, we fulfill,” she said. “We have lived up to the expectations and the goals we set.”

Before launching Southern Magnolia Capital, Deal oversaw a community development initiative for the Greater Hall Chamber of Commerce in Gainesville that involved fundraising. Before that, she worked as a lobbyist and a Washington-based staffer for then-U.S. Rep. Nathan Deal, and also sold power for Jackson Electric Membership Corp.

Denise Deal — married to Jason Deal, a Superior Court judge in Hall County — said criticism about her and the firm has been frustrating.

“I don’t have any choice about what is written, and I can’t help what perceptions people draw,” she said. “I know that I feel confident that anyone who has worked with me, who I have represented and helped raise money for, they will stand by me 100 percent. I fulfill my commitments, and I do a good job.”  She noted that of the campaigns she’s worked on, only one candidate has lost.

Since 2010, Southern Magnolia Capital has received $331,358 in payments from the governor’s campaign for fundraising and consulting, as well as $46,108 from Real PAC, whose chairman is a Deal contributor, according to state records. Those totals also include expense reimbursements.

In recent weeks, Southern Magnolia Capital was in the news for its links to Real PAC, which drew scrutiny because of reports that it hadn’t filed a state financial report since early 2012. It has since filed the reports, showing it has raised about $786,000 in contributions.

“The danger is that it appears as if the governor is raising money to enrich his own family,” said Bryan Long, executive director of Better Georgia, an organization with the goal of building a progressive majority, who has been critical of Deal. “It’s clear that his daughter-in-law’s business has taken off since he became governor.”

Long added there’s also the perception that some Republicans might seek favor with the governor by doing business with Southern Magnolia Capital.

“Some Republicans, some elected officials might feel like they have to do business with Southern Magnolia, with the governor’s daughter-in-law,” Long said. “I have no evidence that there is pressure to do that, but there could be perceived pressure.”

Tom Willis, executive director for the Deal campaign, said Denise Deal receives the industry standard of 10 percent of what she raises and works hard.

“Denise Deal’s business has earned respect by providing results for many different clients,” Willis said. “Fundraising is a performance-based business. You only get paid if you bring in money.”

The fundraising firm was not the only one on the payroll during the governor’s 2010 campaign. Capitol Strategy Group received $156,298 for fundraising and consulting, although the campaign no longer uses them. This year, Denise Deal set up a separate fundraising firm, The Sassafras Group, which will fundraise for the governor’s re-election campaign.

Denise Deal said she and her business partner decided to set up separate firms to keep the focus on clients as business grows. So far, the governor’s campaign has reported raising $3.6 million in contributions for his re-election bid. Denise Deal reiterated the governor has no financial ties to her companies and no input in business decisions or operations.

In recent years, Southern Magnolia Capital drew business from a number of high-profile candidates including U.S. Rep. Doug Collins, R-Gainesville, and U.S. Rep. Rob Woodall, R-Lawrenceville. Collins, who previously served as one of Deal’s floor leaders in the Georgia House, paid Southern Magnolia Capital $68,824 for fundraising and consulting during his 2012 run for Congress, according to federal disclosures. His campaign reported raising nearly $781,000.

Denise Deal said she is no longer fundraising for Collins so she can focus on the governor’s re-election campaign. At this point, Collins is not expected to face a competitive primary in his heavily Republican district. Deal said she still plans to raise money for Woodall’s campaign. Representatives for the congressmen didn’t respond to requests for comment.

On the state level, Southern Magnolia Capital has done fundraising for the campaigns of top leadership in the Georgia Senate, including President Pro Tem David Shafer, R-Duluth; Majority Caucus Chair Butch Miller, R-Gainesville; and Majority Whip Cecil Staton, R-Macon. Combined, the three have paid the firm about $54,000 since 2010 for fundraising, consulting and event planning, according to financial reports.

Miller said he hired Denise Deal, whom he has known for years, before her father-in-law became governor because he wanted someone with her experience on his first Senate campaign in 2010.

“She is one of the hardest working, most ethical people I have ever known,” Miller said. “My decision to do business with her had nothing to do with who her father-in-law is.”  

Eric Tanenblatt, who served as finance co-chair for the Mitt Romney presidential campaign, said Denise Deal is among a very small group of talented fundraisers in Georgia.

“Clients hire her because they recognize she is good at what she does,” said Tanenblatt, who has contributed to the governor but isn’t affiliated with his campaign. “Critics are going to try and find whatever they can and try to make an issue of it. If I was recommending a Georgia fundraising consultant to a candidate, Denise would be at the top of my list. She is very good at what she does, and she gets hired on her own merits not because of who her relatives are.”

 

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