A regulatory dispute in Georgia has taken an unexpected turn, with two state officials proposing giving a $10,000 fine from a telephone company to a religious anti-choice group rather than the state’s treasury.

As reported by the Indiana Daily Journal, Peerless Network of Georgia LLC was fined $10,000 by state communications regulators for failing to file certain required reports. But rather than pay that fine to the Georgia state treasury like other civil penalties, Public Service Commissioner H. Doug Everett instead proposed the company pay the penalty as a contribution to the Atlanta branch of Care Net, a Christian-based crisis pregnancy center. Everett’s wife currently works at the branch as an unpaid volunteer.

Everett’s proposal was supported by another commissioner, Tim Echols. Echols is reportedly a volunteer on Care Net’s local advisory board and, in 2006, was paid almost $10,000 in consulting payments by Care Net’s national parent organization. According to Echols, he was hired by Care Net to recruit board members and raise funds for the charity. Tom Mason, the chairman of the Atlanta branch of Care Net, donated $600 to Echols’ election campaign in 2010, campaign finance records show.

Emails released under Georgia’s open records law indicate that the state’s attorney general’s office has warned the regulators they cannot approve the deal because it violates state law. Under Georgia law, the Public Service Commission can allow violators to make alternative settlements such as consumer refunds or rebates in lieu of fines, but there must be some legitimate tie to the alternative penalty and the underlying violation. In an August 29 email, Senior Assistant Attorney General Daniel Walsh wrote, “Here I don’t see a plausible connection between a utility regulator and a pregnancy center.”

Despite the opinion from the state attorney general’s office that the settlement was illegal, utility regulators have tried to move forward with the plan to give the fine to Care Net. On Wednesday, Attorney General Sam Olens wrote to regulators to let them know the plan also violates the state’s constitutional protections insuring the separation of church and state.

A final decision as to where the proceeds of the fine will go has not yet been made. Since the dispute has come to light, Commissioner Echols said in a statement that he would stop voting on the issue in order to avoid “any appearance of conflict of interest.”