Friday, May 25, 2007

Fred Rost Insults Voters' Intelligence In Regards to Kelty Loan

In today's NS story about the Kelty campaign loan, Fred Rost states:
“This was a loan, not a gift, and was thoroughly documented. Although the loan was not earmarked for any particular purpose, I understood that Matt might use all or a portion of the loan proceeds to help with his mayoral campaign”
Are you kidding me? So it would've been no problem if Kelty would've flown to Vegas and dropped the $148K on baccarat? He knew EXACTLY why Kelty wanted the money and he gave it to him FOR THAT PURPOSE. So why do these semantic games matter? Remember, the campaign finance laws state
(1) The donation is made for the purpose of influencing any of the following:
(A) The nomination or election to office of a candidate.
(B) The election of delegates to a state constitutional convention.
(C) The outcome of a public question.
By saying it wasn't earmarked for the campaign they are going to try and claim that they didn't violate the law. Sorry Fred, we're not stupid.

I think the Kelty campaign should admit this was a mistake and move on from there. Kelty kind of did that in his WOWO interview this morning but Rost certainly isn't helping him out. Just for the record, I personally don't think this should end his candidacy...


Angry White Boy said...

Okay Jeff, let's put it another way. What if Fred had co-signed a loan for Matt? What's the difference?

Matt needed money, he took out a loan from Fred. It was *not* a donation.

Jeff Pruitt said...


I have absolutely no doubt that Kelty took that money for use in the campaign and that Rost knew that when he made the loan.

I have NO problem with that. However, I think Kelty should've declared that loan as coming from Rost. In fact I have no idea WHY he wouldn't do that - there's nothing wrong w/ taking campaign contributions from Rost. I think Kelty realizes that it was a mistake not to disclose that information and that's why he made the change.

I happen to believe it was also a violation of campaign finance law - an intentional violation? I have no idea and usually I would be willing to give the guy the benefit of the doubt as I'm not an irrational person and I realize people make mistakes. The biggest issue I have is that this is the 2nd time that he's not been forthcoming about a Rost donation.

As you know I'm a big proponent of open government. It's not a partisan issue for me - I've been extremely critical of the Richard administration in this area. IMO, Kelty is not off to a good start on this issue.

Like I said in the post I don't believe this should end his candidacy or anything like that, but he does deserve criticism for the way he handled this. The truth is it's probably a good thing this came out now and not in October - I believe Kelty even said that...

Charlotte A. Weybright said...

To those who think the "loan" was not a donation, the following is the definition of "donation" under the controlling Indiana Code:

IC 3-5-2-15. Contribution. (a) “Contribution” means a donation (whether characterized as an advance, a deposit, a gift, a loan, a subscription, or a contract or promise to make a donation) of property (as defined in IC 35-41-1) that satisfies both of the following:

1) The donation is made for the purpose of influencing any of the following:

(A) The nomination or election to office of a candidate.

(B) The election of delegates to a state constitutional convention.

(C) The outcome of a public question.

(2) The donation is accepted by any of the following:

(A) A candidate.

(B) A candidate’s committee.

(C) A regular party committee.

(D) A political action committee.

(E) A legislative caucus committee.

You can call the loan whatever you wish, but under the applicable statutes, it is a "donation" as defined by state law.

While the dictionary definition is different, the dictionary isn't controlling this situation - the State of Indiana and its campaign finance laws have chosen to define "donation" as including a "loan."

Jeff Pruitt said...


A loan is obviously a contribution defined by the statute - I thought everybody agreed on that but perhaps I jumped the gun in that assumption.

If you look at Rost and Kelty's latest talking points they are very careful to say that it wasn't "earmarked" for the campaign.

They are doing this because they know that if it were "earmarked" then it would definitely be defined as a contribution and thus they would be in violation of campaign finance laws. That's really the point I was addressing w/ my post.

The idea that a loan is a contribution is simply not debatable...

Charlotte A. Weybright said...


I understand where you are coming from - and I agree. It seems clear and not debatable, but some bloggers are still arguing that donation doesn't mean a loan because a donation is more like a gift.

They are limiting themselves to the dictionary definition of loan not the statutory definition that is applicable.