Tuesday, June 19, 2007

Kelty Hearing Preview

I'm sure everyone reading this knows that the hearing will be about Matt Kelty's campaign finance reporting in regards to $160K in personal loans. The election board, comprised of 2 Republicans and 1 Democrat, will discuss the issue and ask questions of Kelty and his lawyer James Bopp. Afterwards, they will likely rule whether or not the matter should be forwarded on to the county prosecutor.

The gist of Bopp's argument will be that the loans were made to the candidate and not the committee, so therefore the source of the loans need not be reported. Bopp will claim that this is no different than a candidate taking a cash advance on his credit card. It will be interesting to see if Bopp actually references any statute within the Indiana Code to support his argument because, to date, I do not believe he has made such a reference.

As previously blogged (here and here), I believe the Kelty campaign violated IC 3-9-5-14:
IC 3-9-5-14. Committee’s treasurer reports.
(b) The report of each committee’s treasurer must disclose the following:
(3) The following information regarding each person who has made one (1) or more contributions within the year, in an aggregate amount that exceeds the threshold contribution amount in actual value to or for the committee, including the purchase of tickets for events such as dinners, luncheons, rallies, and similar fundraising events

Even Bopp admits that the loan was made for the purpose of the campaign. Thus it was made FOR the committee even if it wasn't made TO the committee and, as the statute indicates, any contribution made FOR the committee must be reported.

It will be interesting to see what questions the election board chooses to ask. I would like to know Bopp's answer to the following:
1. Bopp has argued that personal loans are held to a different standard than normal contributions. Following Bopp's argument couldn't any contribution be reclassified as a forgivable "loan" and thus not have to be reported?

2. Isn't a personal loan made specifically for the campaign quite distinct from a credit card cash advance that is not earmarked for the election and can be used at any time?

3. If a loan is made for the sole purpose of furthering a campaign then is that loan not considered to be made for the campaign committee?

4. Under what circumstances can a campaign contribution be made to a candidate and not have to be turned over to the campaign committee?

I will be covering the hearing tomorrow so drop me a line if you plan on being in attendance. Here's the info for those interested:
3:30 p.m. Tuesday
Allen County Building Department
1 W. Superior St.
1st floor meeting room


Charlotte A. Weybright said...


I am looking forward to reading your coverage. I have to work (as I am sure many who would like to attend do).

I really do not see how the Election Board can gloss over this contribution. Over the past few weeks the statutes have been posted and read and re-read.

If this contribution is allowed to stand without any consequences, then, as you and others have noted, what will prevent future donors from going through the facade of making a loan to avoid reporting and then simply forgiving the loan at a later date?

I am not sure why some argue that the law is confusing. The loan was made as a contribution/donation as defined by the statute, which explicitly includes loans; it was loaned to Kelty to provide to his campaign; it was made for the purpose of influencing an election (note the statements from Kelty and Bopp, and the details of the promissory note itself); and, it meets the threshhold amount that requires reporting.

The one thing that concerns me is that if the Election Board is composed of one Democrat and two Republicans, what prevents the final vote from simply breaking down along party lines like so many other issues in this country?

Jeff Pruitt said...


I concur that the case seems pretty cut and dry. As far as the party-line break is concerned, I have some hope that what you mention won't come to fruition as the election board has previously recommended Republican party officials for prosecution. Also, I'm still not convinced that Kelty is well accepted within the Republican party establishment...

otto said...

What is the word? what time is this meeting to be over?

otto said...

Watching Steve Shine on channel 15 it seems that Shine has thrown in the towel on this one. He didn't stand behind Kelty and merely stated that kelty and his supporters think he has done no wrong and don't plan to withdraw from the race if it gets forwarded to the prosecutor. Obviously he would rather see peters on the ticket even without this recent flap.

Jeff Pruitt said...


It was a disgraceful hearing altogether - see the next post...