Tennessee senator indicted on campaign cash scheme charges
NASHVILLE, Tenn. (AP) - A Tennessee state senator and a Nashville social club owner were indicted on charges that they violated campaign finance laws by illegally concealing the transfer of $91,000 during the Republican lawmaker´s 2016 failed congressional campaign, federal investigators announced Monday.
A federal grand jury in Nashville handed down the five-count indictment against state Sen. Brian Kelsey and Joshua Smith on Friday, the acting U.S. attorneys for the state's middle and western districts and an assistant attorney general from the federal Justice Department said in a news release.
Kelsey and Smith "unlawfully and secretly" funneled funds from Kelsey's state Senate campaign committee to his federal congressional campaign committee, according to the indictment released Monday.
Prosecutors also allege that Kelsey and others caused a national nonprofit political organization to make illegal and excessive campaign contributions to Kelsey by coordinating with the organization on advertisements, and caused the organization to file false reports to the Federal Election Commission. Authorities did not name the national organization.
The indictment mentions, but does not charge, two alleged co-conspirators, one of whom is described as an attorney and former Tennessee House member expelled in 2016. Republican Rep. Jeremy Durham, a Republican from Franklin, was the only lawmaker expelled that year.
Kelsey, Smith and the unidentified co-conspirators moved tens of thousands of dollars to the political organization in 2016, according to the indictment.
FILE - Sen. Brian Kelsey, R-Germantown, speaks during a debate on school voucher legislation Wednesday, May 1, 2019, in Nashville, Tenn. The Tennessee state senator and a Nashville social club owner were indicted on charges that they violated campaign finance laws by illegally concealing the transfer of $91,000 during the Republican lawmaker's 2016 failed congressional campaign, federal investigators announced Monday, Oct. 25, 2021. (AP Photo/Mark Humphrey, file)
"It was a purpose of the conspiracy to unlawfully and secretly funnel soft money from state committee 1 to (the political organization) to support Kelsey's federal campaign," the indictment stated.
The indictment goes on to allege that the political organization filed several reports claiming that it made "independent expenditures" on Kelsey's behalf when "in truth and in fact, the expenditure was coordinated with Kelsey and his agents and was not independent."
Kelsey, a Republican from Germantown, was elected to the General Assembly in 2009 and serves as chairman of the Senate Education Committee. He's up for reelection in 2022.
Smith is the owner of The Standard, a restaurant and private club near the state Capitol that is often frequented by lawmakers.
Neither Kelsey nor Smith responded to phone calls and emailed requests for comment. Their first court appearance is scheduled for Nov. 5. If convicted, they face up to five years in prison on each count.
The indictment is the second time in a little more than a year that a Tennessee lawmaker has been indicted.
Last month, Democratic state Sen. Katrina Robinson of Memphis was convicted of four of five counts of wire fraud stemming from charges that she misused federal grant money awarded to a health care school she operated. A judge had acquitted her on 15 of 20 charges. Robinson, who was initially indicted in July 2020, is seeking an acquittal or a new trial and has not resigned her legislative post as Republican Lt. Gov. Randy McNally asked her to do after her conviction.
Meanwhile, several Republican state House lawmakers, including former GOP House Speaker Glen Casada, state Rep. Robin Smith and Rep. Todd Warner, had their homes and legislative offices searched by federal agents earlier this year. Warner told state regulators earlier this year that federal agents took all the files and documents related to his campaign. Federal authorities have release scant details about what they were looking for.
