Campaign Funds Ruling Lets Officials Sue, but Damages Limit Leaves Rep. Matt Simpson ‘Disappointed’

DAPHNE, Ala. — Outgoing state Rep. Matt Simpson asked the Alabama Ethics Commission whether he could spend campaign money on a lawsuit against groups he says lied about his voting record. The commission’s answer was a qualified yes, but the conditions attached may make the lawsuit impractical. The Daphne Republican said Thursday he is “disappointed” by the campaign funds ruling and is reconsidering his options.

The commission voted unanimously Wednesday, Oct. 7, to approve a formal advisory opinion. It says state law allows a candidate’s campaign contributions to pay legal fees and costs for a civil lawsuit, but only when the lawsuit involves conduct reasonably related to performing the duties of the office the person holds.

The opinion also sets two important limits. Under the state Ethics Act, campaign money cannot be used to pursue a personal injury claim that would result in damages being paid to the official personally. And under the Fair Campaign Practices Act, a candidate’s campaign committee cannot accept damages from a lawsuit against a political action committee except during the 12 months before an election in which the person intends to run.

For Simpson, who lost his re-election bid in May and is leaving the Legislature, that last restriction is the problem.

What the commission decided

Simpson requested the opinion to learn whether he could use the money in his campaign account to help pay for litigation over political advertising that targeted him before the May Republican primary in House District 96.

Brian Paterson, chief counsel of the Alabama Ethics Commission, summarized the staff’s reading of the law for commissioners.

“Campaign funds can be used for legal fees and costs associated with any civil action, criminal prosecution or investigation related to conduct reasonably related to performing the duties of the office held,” Paterson said.

According to the opinion, the law does not limit using campaign funds for legal fees to defend an elected official in a lawsuit filed against them. It also does not prevent an official from using that money to start a civil defamation claim.

Any damages from a lawsuit financed with campaign money, however, could not go to the official for personal use.

“If campaign funds are used for legal fees and associated costs, then any and all damages that result would need to be paid to the public official’s PCC (principal campaign committee) rather than to the candidate personally,” Paterson said.

That creates a complication. The Fair Campaign Practices Act bars a candidate’s principal campaign committee from receiving a payment of damages from a lawsuit against a PAC outside the 12 months before an election in which the person intends to be a candidate. A lawmaker who is not planning to run again could find that there is no lawful place for any damages to go.

Simpson: ‘I’m disappointed’

Simpson described the practical effect of the opinion in an interview Thursday.

“The gist of (the opinion) was you can file suit, but you can’t get damages if the damages that you’d recover are outside of the fundraising window, so therefore you can’t use the money,” Simpson said.

He said he has not filed a lawsuit and is still weighing what to do.

“I’m disappointed. It’s a situation where big companies come in, and these groups come in with untold dollars, and they spend all these out-of-state dollars, and they lie to the public, and they say things that are absolutely false and trying to help hold them accountable for what they said that were false statements,” he said. “I don’t come from money. I’m a public employee. I work for the state. Aside from being a legislator, I’m still a prosecutor, and I’ll continue to be a prosecutor after I’m a legislator. I don’t have the deep pockets that they have. I’ll evaluate where I am with my attorney, and we’ll see what options may be there for the potential suit. We’ve just got to sit down and go over our choices and see where we stand on everything. It’s just time to re-evaluate.”

Simpson has $33,927.11 left in his campaign fund.

A history with the commission

Simpson and the Ethics Commission have clashed before. During the 2024 legislative session, he sponsored legislation to change parts of Alabama’s ethics laws. The House passed the bill by a wide margin, but the Senate Judiciary Committee never voted on it. The Ethics Commission opposed the bill.

Simpson said he did not expect that history to work in his favor.

“I didn’t expect the ethics commission to do me any favors. I took them on, they’re familiar with when I took them on, so I wasn’t expecting a favor from them,” Simpson said.

The ads at the center of the dispute

Simpson says two groups, Alabama Values PAC and the Christian Coalition of Alabama, misrepresented his record in political advertising during his unsuccessful re-election campaign. He said he is considering a defamation lawsuit against both.

“I feel a lawsuit is warranted because you have these groups that come in and say absolute false statements and lies,” Simpson said. “They put them in mailers and messages out in the community in advertisements and other things saying that I voted for a bill I voted no on, they said I voted no on a bill I voted yes on.”

He said he “wanted to hold them accountable” for the statements.

In May, Simpson sent a cease-and-desist letter to Alabama Values PAC, which ran negative advertising against him before the primary. He demanded that the PAC retract a flyer that falsely claimed he voted to prioritize free college for immigrants without legal status.

Simpson voted in 2024 against HB 210, a bill sponsored by Rep. Reed Ingram, R-Pike Road. It would have allowed students without legal status to attend Alabama colleges and universities if they had applied for legal status, or if they had earned a diploma or GED after attending high school for at least three years. The bill did not become law. In May, the PAC said its claim about Simpson was the result of a “printing error” but did not elaborate.

Simpson also pointed to advertising about another bill he supported.

“They talked about a bill I voted in favor of. The House passed that bill 104-0, and they’re telling people I tried to kill the bill, which makes no sense to me. That’s not true at all,” Simpson said. “I’ve fought to protect children. It’s frustrating when people just commit absolute lies and just say things that are blatantly false for the purpose of steering an election. We’ll see if we can help hold them accountable.”

Who is behind Alabama Values PAC

Former state Sen. Dell Hill created Alabama Values PAC in March. The PAC lists Thomas Datwyler, a Wisconsin-based political consultant who says he has “guided” 400 political action committees, as its chairperson and CEO.

In a statement in March, Hill said the PAC would defend “traditional Christian principles that have made Alabama the best place to raise a family, start a business, and build strong communities.” He accused “our so-called conservative leaders” of voting for in-state tuition for immigrants without legal status, parole for violent offenders, gambling legislation, and restrictions on guns or property rights. The statement did not give specific examples.

Messages seeking comment were sent to Alabama Values PAC and Datwyler on Wednesday.

According to its website, the PAC also targeted Reps. Phillip Pettus, R-Florence, and Frances Holk-Jones, R-Foley, along with Sens. Greg Albritton, R-Atmore, and Andrew Jones, R-Centre. Pettus and Albritton lost their primaries. Holk-Jones was forced into a runoff and won, and Jones won his primary.

Simpson’s primary loss

Simpson, a Daphne Republican, has represented House District 96 on Baldwin County’s Eastern Shore for two terms. He also works as a prosecutor, and he has said he plans to stay in that job after leaving the Legislature.

He lost the May 19 Republican primary to Danielle Duggar in a close race. Duggar, a Baldwin County mother who ran on a “faith, family and freedom” platform, received about 51% of the vote to Simpson’s 49%, according to unofficial results. It was her second attempt at the seat. She lost to Simpson in the 2022 Republican primary by 662 votes.

Simpson’s term ends after the November general election, when the winner of the District 96 race takes office.

How advisory opinions work

The Alabama Ethics Commission was created by the Legislature in 1973. It administers the state Ethics Act, which governs conflicts of interest and the use of public office for private gain, and it plays a role in how campaign finance laws are applied. The commission has five members.

Public officials, public employees and candidates can ask the commission for a formal advisory opinion before taking an action they are unsure about. Commission staff prepare a draft, and commissioners vote on it at a public meeting. Under state law, an official who requests an opinion and relies on it in good faith is generally protected from later ethics charges over that same conduct. That is why officials often seek an opinion before acting on an unsettled question.

Simpson’s question was unusual. Candidates in Alabama have long used campaign money to defend themselves in election-related litigation. Using campaign money to bring a lawsuit, especially a defamation claim against a PAC, is less common. Simpson said in September that the commission’s informal response to his earlier inquiry had described the idea as “uncharted territory.”

Why the 12-month window matters

The Fair Campaign Practices Act regulates how Alabama candidates and political committees raise, spend and report campaign money. It requires candidates to form a principal campaign committee once they meet certain thresholds. It also limits how campaign funds may be used, generally restricting them to campaign activity and to expenses related to holding public office, and it bars converting campaign money to personal use.

The act also limits when a principal campaign committee can accept contributions, tying fundraising to the period before an election. The commission applied that same window to damages from a lawsuit against a PAC, concluding that a committee cannot receive such a payment outside the 12 months before an election in which the person intends to be a candidate.

For an officeholder planning another campaign, the rule may leave room to sue and send any damages to the campaign account. For someone like Simpson, who is leaving office and has not said he plans to run again, the opinion means any damages won with campaign-funded legal help would have nowhere lawful to go. As Simpson read it, that effectively rules out using the money.

The opinion does not prevent Simpson from suing on his own, using personal funds. It also does not decide whether the advertisements were defamatory. Only a court could decide that if a lawsuit is filed.

Defamation claims by public figures

Any defamation case brought by a sitting or former elected official faces a high bar. Under the U.S. Supreme Court’s 1964 decision in New York Times Co. v. Sullivan, a case that came out of Alabama, a public official suing over statements about official conduct must show the statement was false and was made with “actual malice.” That means the speaker knew it was false or acted with reckless disregard for whether it was true.

Simpson has said there is no rush to file. In September, he told reporters he had “a couple of years” before the statute of limitations would become an issue.

What happens next

Simpson said he will meet with his attorney to review his choices. Alabama Values PAC and Datwyler had not responded to requests for comment.

The opinion could also guide other officeholders. Outside spending by PACs played a visible role in several Alabama legislative primaries this year. Now that the commission has issued a formal opinion, officials who believe they were targeted by false advertising know where the state draws the line on using campaign money to fight back in court.