Thursday, May 24, 2007

Kelty Misrepresented Source of Campaign Loan

A $148,000 loan Fort Wayne GOP mayoral candidate Matt Kelty earlier reported as making himself to his campaign in fact came from three other close friends and supporters of Kelty. The Fort Wayne News-Sentinel reports that Kelty will amend his campaign reports to reveal the loan actually came from Fred Rost of Allen County Right to Life and Steve and Glenna Jehl. You may recall that prior to the primary Kelty was pressured to disclose that a Zogby poll was commissioned by Rost on behalf of Kelty's campaign. The Allen County Election Board is scheduled to meet next week to consider whether Kelty broke the law by misrepresenting the true source of the loan. The News-Sentinel reports:

The Allen County Election Board will meet as soon as next week to decide whether Republican mayoral candidate Matt Kelty broke the law when he reported making a personal loan of $148,000 to his own campaign.

In fact, a report to be filed as soon as today will show the money came from Frederick Rost and Steve and Glenna Jehl. Rost is a friend who also paid $4,450 for the Zogby International poll the Kelty campaign released during the primary. Steve Jehl is a real estate developer, and his wife, Glenna, is Kelty’s campaign manager.

Although initial campaign finance reports listed the $148,000 as a loan from Kelty’s personal account, the candidate said today he does not believe the filing was misleading or illegal. The loans were secured by promissory notes and reviewed by attorneys.

But the Election Board will have to decide whether the source of the loans should have been included on earlier reports, and whether the money should have been listed as a contribution to the Kelty campaign, not as a personal loan.

Allen County Republican Chairman Steve Shine said he met with Kelty this week after several prominent Republicans expressed concern about the issue. Shine praised Kelty for coming forward quickly to clarify the source of the income, and said it is too soon to determine what damage – if any – the news will do to Kelty’s campaign against Democratic former City Councilman Tom Henry.

Kelty would be ineligible to run for office if convicted of a felony. The party could not remove him from the ballot even if it wanted to, and Shine said it is too early to say whether Kelty would be asked to withdraw so another candidate could be selected. “We’ll wait to see what the Election Board says,” Shine said. “I commend Matt for being proactive.”

Kelty, meanwhile, said he is confident he did not break the law. “This will be more political than legal,” he said.

I don't know folks. It looks like a clear violation of the law to me. If I steal money from my boss and later tell him I did so, it doesn't excuse my earlier wrongdoing. Perhaps it will mean the judge will go easy on me when sentencing me for my crime, but it shouldn't excuse me from punishment for committing the illegal act. Kelty needs to do the right thing and step down as the Fort Wayne GOP mayoral candidate and seek the forgiveness of his Lord Jesus Christ he speaks of so often. This is the second time Kelty has been caught trying to deceive the public about the source of his campaign's funding. He doesn't deserve another chance.

UPDATE: Fort Wayne Observed has provided a link to the amended documents Kelty filed with the Allen Co. Election Board, which more fully explain what transpired. Kelty actually received 4 separate loans totalling $160,000 in amount of $140,000, $8,000, $8,000 and $2,000, respectively. Kelty explains he didn't believe he needed to disclose the source of the funds he borrowed to loan to his campaign. In fact, he says he and his counsel concluded that providing the source of the loans was not required, but he decided to disclose the source of the loans "in the interest of the absolute transparency of [his] campaign and the strength of my integrity." Kelty reported he received a $150,000 personal loan from Fred Rost, which he in turn used to make two separate loans in the amount of $140,000 and $8,000, respectively. Kelty also received a $10,000 loan from Glenna and Steve Jehl from which he used to loan his campaign $2,000 and $8,000, respectively.

It is beyond me how Kelty's counsel could conclude he was not legally required to disclose the source of the loans if the funds originated from a source other than Kelty's own personal funds, which his initial disclosure statement clearly gave the impression was the source of the loans. It is analagous to me giving $2,000 to an employee, who in turn contributes the $2,000 to the candidate. It's nothing more than a way of circumventing our campaign finance laws. A person who knowingly files a fraudulent report commits a Class D felony and is subject to a $10,000 fine, three years imprisonment, or both. (IC 3-14-1-13)


Anonymous said...

Anyone who is running for office, and who isn't already convinced that he (or she) knows everything about everything, can easily find the campaign finance manual on-line. It is really not that difficult to read - even an architect should be able to do it. And might I add that before he started his architecture firm Kelty ran the field office for Coats & Lugar, PLUS he ran for State Legislator, so it is not as if he is new to politics.

However, I don't think that he is cursed with self-awareness. If he says it's right, then by gum, it's right. In this way he reminds me of our Only President.

Anonymous said...

I predict that Karen E. Richards, Republican Prosecuting Attorney for Allen County will not find any violation - she'll find that the amended campaign finance reports are sufficient to remove any criminal culpability.

Gary R. Welsh said...

I predict she names a special prosecutor and it will be Dvorak from St. Joseph County.

Anonymous said...

It is too bad...that Kelty and Richards are practically just down the street! And before coming Prosecutor they both had offices in the same building, often speaking to each other in the elevator.

Anonymous said...

"It is beyond me how Kelty's counsel could conclude he was not legally required to disclose the source of the loans..."

Gary, this is probably the same legal counsel (and I use that term loosely) who apparently advised Kelty earlier this spring that the Zogby poll did not need to be counted as an in-kind donation. I don't know if this so-called legal counsel is good at handling divorces, DUI's, or corporate buy-sell agreements, but he/she is certainly no whiz kid at campaign finance law.

David C Roach said...


Jeff Pruitt said...

Richards will go by the recommendation of the Allen County Election Board. If they say he broke the law then I would fully expect her to file charges...