Tennessee State Senator Concealed Transfer of $91K Between Campaigns: Indictment

Tennessee state Senator Brian Kelsey was indicted Monday for allegedly funneling $91,000 of funds from his state Senate campaign to his federal congressional campaign committee, assisted by a Nashville club owner.

Kelsey allegedly violated campaign finance laws by illegally concealing the transfers during his 2016 congressional campaign, and was given a five-count indictment from the federal grand jury.

The Republican senator is up for reelection in 2022 after being elected in 2009 into the General Assembly and serving as chairman of the Senate Education Committee.

Joshua Smith, the owner of The Standard, a restaurant and private club near Nashville that is popular with lawmakers, was also indicted on the five counts alongside Kelsey. According to the indictment, the men "unlawfully and secretly" funneled the money.

"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.

Prosecutors also believe Kelsey and others to have had a national nonprofit political organization that remained unnamed by authorities allegedly make illegal and excessive campaign contributions to Kelsey. Through coordination with the organization on advertisements, Kelsey allegedly caused the organization to file false reports to the Federal Election Commission, prosecutors claimed.

Kelsey and Smith will have their first court appearance on November 5, and if they are convicted will face charges of up to five years in prison on each of the five counts.

For more reporting from the Associated Press, see below.

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. Representative 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.

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."

Neither Kelsey nor Smith responded to phone calls and emailed requests for comment.

The indictment is the second time in a little more than a year that a Tennessee lawmaker has been indicted.

Last month, Democratic state Senator 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 from her legislative post as Republican Lt. Governor Randy McNally asked her to do after her conviction.

Meanwhile, several Republican state House lawmakers, including former GOP House Speaker Glen Casada, state Representative Robin Smith and Representative 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 released scant details about what they were looking for.