Friday, January 25, 2008

What Is Jim Brainard's Campaign Hiding?

A campaign finance report filed by the campaign of Carmel Mayor Jim Brainard is raising a lot of eyebrows for what it's missing. In his winning re-election campaign last year, Brainard's campaign spent over $547,000. His campaign disclosure form, however, itemizes very few expenditures. More than $481,000 was paid to Brainard's campaign consultant, Stakeholder, Inc., a firm owned by Allan Sutherlin. That's 88% of his total expenditures!

Last year, an Allen County grand jury indicted Fort Wayne GOP mayoral candidate Matt Kelty for failing to disclose the source of a six-figure loan he received from three supporters. Instead of reporting the names of the three supporters, Kelty reported the money as a loan to his campaign committee from himself after the individuals loaned him the money. That according to special prosecutor Dan Sigler violated Indiana's campaign finance law.

Similarly, the state's campaign finance law requires candidates to itemize aggregate expenditures to any person or business exceeding $100. That same law allows the expenditure of political contributions to defray any expenses reasonably related to the person's campaign, continuing political activity or activity related to the person's service in an elected office. If a candidate can simply transfer the bulk of his political contributions to a campaign consultant's firm to expend on behalf of his campaign, how can it be determined if the requirements of the law are being fulfilled? Why not just make every expenditure for your campaign using a VISA credit card and show every expenditure of your campaign as a payment to VISA?

A strong argument can be made that what is taking place with the expenditures of Brainard's campaign is the exact same thing in reverse as what happened in Matt Kelty's campaign. Clearly, the spirit of public reporting of both campaign receipts and expenditures, if not the letter of the law, was undermined by both campaigns. The public has no way of knowing what Stakeholder, Inc. did with all the money paid to it by Brainard's campaign. How would the public know if funds weren't being given to Brainard, for example, instead of being spent for direct mail expenses, advertising and other campaign expenditures permitted under Indiana law? Brainard's campaign, despite reporting more than $551,000 in campaign contributions, reports a $20,000 loan from Brainard. Critics also point out that Stakeholder, Inc.'s owner, Allan Sutherlin, bankrupted another consulting firm he operated during the 1990s, leaving his employees and creditors unpaid.

Matt Kelty amended his campaign finance forms to show the true source of all of his receipts after the public learned what he had done. That wasn't enough to save him from an indictment. Jim Brainard at least owes the public an accounting of how all the money his firm paid to Stakeholder, Inc. was spent at a minimum. Perhaps the Hamilton County Election Board should consider whether more action is required.

A big hat tip to Ed Feigenbaum of the Indiana Legislative Insight for noting the irregularity in Brainard's campaign finance report this week. Feigenbaum had warned during the Kelty investigation that this very problem could arise on the expenditure side of campaign finance reports. Little did he know how soon his warning would become reality.


Anonymous said...

Mayor Brainless is at it again....Carmel is going to wake up bankrupt one morning

Anonymous said...

Much can be learned from following the money.

Carmel's bonded indebtedness is 7.5% of its tax base; per the state constitution, any bonds issued which exceed 2% of the tax base are invalid.

Contact Standard&Poor's on the topic and you get a thorough stonewalling.

Brainard - cui bono ?

Anonymous said...


What is Brainard's relationship with Pedcor, the firm that has benefited from developing millions of dollars on behalf of the city of Carmel.

Search the Indiana corporations database and you'll find a "BRAINARD HOUSING COMPANY, LLC". Its address is the same address as the headquarters for Pedcor.

Among the high-profile projects Pedcor has benefited from are City Center, the Carmel Old Town project, and the under-construction Indiana Design Center.

If Peterson had used city money to benefit Precedent the way that it seems Brainard does with Pedcor, he'd certainly be behind bars right now.

Anonymous said...

Napolean had nothing on Brainard.

What a complete tool.

Doug said...

I'm not sure if it's the same thing, exactly, but awhile back I had a post mentioning that Jackie Walorski gave about $70,000 (out of about $217K) to her political shop, Target/Faulkner Strategies.

Gary R. Welsh said...

Doug, So Jackie paid about a third of her campaign expenditures to her campaign consultant. It's possible that was actually the charge for the services performed directly by Faulkner, which was probably direct mail. I don't have as much of a problem with that if that is actually the case. But when almost 90% of your expenditures is claimed by your campaign consultant, it appears to me you have completely outsourced the functions of your campaign committee to an outsider. That makes the campaign finance disclosure statement meaningless on the expenditure side because we have no way of knowing how the consultant expended those funds. What really bothers me is where some of the candidates will show big payments to a firm you've never heard of when you ask around town who it is. That makes you wonder if the payments are simply being laundered through an entity to reach an intended recipient which the candidate doesn't want you to know about.

Anonymous said...

Maybe he is hiding 1000 more statues for the Carmel Arts District.

incpl4iu said...

How did he spend $500K. I live in Carmel and remember damn few yard signs, no TV and just a mail piece or two. You can make a pretty big splash of a campaign in this state with $10K. $500K should have been a humdinger.

Jim, Terre Haute Federal Penitentiary is calling you.