June 22, 2024

Campaign finance exec: Former Tennessee Sen. Kelsey can’t use PAC funds on legal fees

Tennessee’s top campaign finance watchdog advised former Sen. Brian Kelsey he can’t use his political action committee to pay attorneys as he tries to reverse a conviction for violating federal campaign finance law.

Kelsey, a Germantown Republican, transferred $196,833 from his state campaign account to his Red State PAC last summer, then sought a legal opinion on whether that money could be used for legal fees in his federal case, after switching attorneys twice.

Bill Young, executive director of the Bureau of Ethics and Campaign Finance, issued an advisory opinion to Red State PAC Chair Jennifer Martinez, of Memphis, in November letting her know state law “prohibits the disbursement of campaign funds from a candidate’s campaign account for a candidate’s own personal use,” precluding PAC funds from being spent on Kelsey’s legal fees.

Young said it is his opinion that Red State PAC “may not use its funds for this purpose,” and that the use would violate state law.

(READ MORE: Former Tennessee lawmaker Brian Kelsey can stay out of prison while challenging sentencing)

Kelsey pleaded guilty two years ago to directing a scheme in which funds from his state account were funneled through two PACs to the American Conservative Union, which made a large radio/digital expenditure on behalf of Kelsey’s failed 2016 U.S. congressional race. Such a transfer of funds violates federal law, because state and federal campaign funds fall under different guidelines.

The former state lawmaker reneged on his guilty plea, claiming his decision was adversely affected by the birth of twin sons and illness of his father, who has since died. He also said he didn’t understand the criminal justice system, even though he earned a law degree at Georgetown University and served as chair of the Senate Judiciary Committee.

U.S. District Court Judge Waverly Crenshaw sentenced Kelsey to 21 months in prison but is allowing him to remain free on bond while he argues the case before the 6th Circuit Court of Appeals, attempting to reverse his plea or at least not serve time.

Needing money for new lawyers

Martinez, the PAC’s chair, wrote in her letter that the bulk of Kelsey’s legal fees were made in a flat payment to lawyers that Kelsey then fired. He personally spent $422,570 in legal fees and a legal defense fund paid $107,000 on his behalf, bringing his total to $529,570, according to Martinez.

Kelsey initially hired Paul Bruno, David Rivera and Jerry Martin to represent him but then fired them when he decided to try to back out of the guilty plea. He also released another attorney, David Warrington, before settling on Alex Little and Zachary Lawson, who’ve represented him since mid-2023.

In her letter, Martinez said Red State PAC had received numerous donations from Kelsey’s reelection account over the years to help other candidates, including a donation received June 1, for $196,883, after which Kelsey closed his reelection account. Martinez notes in her letter that Kelsey is a board member of Red State PAC and solicits and accepts PAC contributions and makes recommendations, but that she has “sole authority” to spend the funds.

(READ MORE: Hamilton County Mayor Wamp tells taxpayers they have ‘all the leverage’ in stadium deal)

Young, however, pointed out in response that the funds would be used to pay for Kelsey’s legal expenses in a matter “at best tangentially related” to his candidacy as a state senator. Further, Young said the funds would be used to defend Kelsey in his “individual capacity for violating federal statutes,” making it a personal use, which is prohibited by state law.

In addition, Young says he was “not persuaded” that Kelsey’s position as an officer in the PAC or Red State PAC’s possible involvement in an investigation leading up to the criminal proceedings allows the PAC to pay the legal expenses.

Ultimately, Young said his opinion is that Tennessee law “prohibits” Red State PAC from using the $196,883 from Kelsey’s campaign account to pay for legal fees in the federal case. Young encouraged Martinez to ask for guidance and clarification from the Federal Election Commission and the U.S. attorney’s office.

In a separate advisory opinion, Young also said Red State PAC can’t give the money to a nonprofit entity to pay Kelsey’s legal fees.

Read more at TennesseeLookout.com.

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