Kelsey granted reprieve from prison while mounting appeal
U.S. District Judge Waverly Crenshaw has granted former Sen. Brian Kelsey’s motion to stay out of prison while he mounts an appeal of his 21-month sentence for masterminding a scheme to funnel money raised for his state account to back his unsuccessful congressional bid in 2016.
Kelsey, who pleaded guilty to two felony counts, argued federal prosecutors had violated the agreement by advocating for a sentence enhancement because he tried to withdraw the deal. The government said it wasn’t arguing in favor of the enhancement, but only noting that the recommendation was valid because perjury is considered obstruction of justice.
Kelsey had been scheduled to report to prison next month. Now he will remain on bail until the 6th Circuit U.S. Court of Appeals determines whether prosecutors violated the plea deal. The government argues that even if Kelsey prevails, the case is likely to go to another federal judge for sentencing. The former lawmaker’s legal team says the result could be a cancellation of the entire plea agreement and the case going to trial.
Kelsey appealing 21-month sentence in campaign finance case
Former state Sen. Brian Kelsey (R-Germantown) is appealing his 21-month prison sentence following his guilty plea to two felonies related to his 2016 bid for Congress.
Kelsey filed notice but didn’t elaborate on what basis he will bring his challenge to the 6th Circuit U.S. Circuit Court of Appeals.
Kelsey’s latest set of attorneys had argued that the former lawmaker shouldn’t face any time behind bars.
New TNJ edition alert: Kelsey sentencing recap, a 6th Circuit vacancy approaches
The latest print edition of The Tennessee Journal is out. Here is what’s in it:
— Final chapter in Kelsey chronicles? Ex lawmaker gets 21 months in prison for fundraising scheme.
— From the campaign trail: Rolli parts ways with consultant, Humble told to make full disclosure.
— Courtside seat: An opening on the 6th Circuit, a likely delay in the Casada case.
Also: Longtime head of the Tennessee Wildlife Federation passes away, Dolores Gresham goes after recalcitrant school boards, and Andy Ogles tries to tell the media how to cover the news.
As always, access the your copy of the TNJ here.
Or subscribe here.
Kelsey sentenced to nearly 2 years in prison
Former state Sen. Brian Kelsey (R-Germantown) has been sentenced to 21 months in prison for his role in a campaign finance conspiracy related to his 2016 bid for Congress. Restaurateur Josh Smith, a codefendant whose guilty plea preceded Kelsey’s own agreement, received a $250,000 fine and 720 hours of community service.
“I am sorry that I made this mistake, and I will always regret it. I am sorry for letting down my constituents and the public,” Kelsey said in a statement after the hearing. “I deeply appreciate the love of my family and friends who are with me today. Their support means everything to me.”
Former Democratic state Rep. John Deberry of Memphis, now a senior adviser to Gov. Bill Lee, appeared as a character witness for Kelsey.
Here’s the release from the U.S. Attorney’s Office:
WASHINGTON – Former Tennessee State Senator and practicing attorney Brian Kelsey was sentenced today to one year and nine months in prison for violating campaign finance laws and conspiring to defraud the Federal Election Commission (FEC) as part of a scheme to benefit his 2016 campaign for U.S. Congress.
According to court documents, Kelsey, 45, of Alexandria, Virginia, secretly and unlawfully funneled money from multiple sources, including his own Tennessee State Senate campaign committee, to his federal campaign committee. To carry out the scheme, Kelsey conspired with others, including Joshua Smith, who owned a members-only social club in Nashville, of which Kelsey was a member, and controlled a Tennessee political action committee affiliated with the club. Kelsey, Smith, and others caused a national political organization to make illegal and excessive contributions to Kelsey’s federal campaign committee by secretly coordinating with the organization on advertisements supporting Kelsey’s federal candidacy, which caused false reports of contributions and expenditures to be filed with the FEC.
“The defendants attempted to hide from voters how Kelsey raised and spent campaign money,” said Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division. “The integrity of our elections is essential to democracy, and voters should know how candidates raise and spend campaign dollars. The Department will continue to work alongside our law enforcement partners to uncover and prosecute campaign finance schemes designed to evade disclosure, and to ensure that violations of these laws carry a high cost.”
“Brian Kelsey intentionally violated federal campaign finance laws and his oath as a state senator in order to deny Tennessee voters their right to make informed decisions about his candidacy for Congress,” said U.S. Attorney Henry C. Leventis for the Middle District of Tennessee. “The court’s sentence today reflects the seriousness of his crimes and is a strong reminder of our commitment to root out public corruption and ensure the integrity of federal elections.”
Kelsey and his co-conspirators orchestrated the concealed movement of $91,000 – $66,000 of which came from Kelsey’s State Senate campaign committee, and $25,000 of which came from a nonprofit corporation that publicly advocated on legal justice issues – to a national political organization for the purpose of funding advertisements that urged voters to support Kelsey in the August 2016 primary election. Kelsey and his co-conspirators also caused the political organization to make $80,000 worth of contributions to Kelsey’s federal campaign committee in the form of coordinated expenditures.
“The sentence handed down today makes it clear that no one is above the law,” said Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division. “The FBI diligently investigates campaign finance fraud to ensure that U.S. elections are free from unfair influence, and anyone caught attempting to scheme their way into office will be held accountable.”
Joshua Smith was also sentenced today to five years of probation for aiding and abetting the solicitation, receipt, direction, transfer, and spending of soft money in connection with a federal election.
The FBI Memphis Field Office investigated the case.
Trial Attorney John Taddei of the Criminal Division’s Public Integrity Section, Assistant U.S. Attorney Amanda Klopf for the Middle District of Tennessee, and Assistant U.S. Attorney David Pritchard for the Western District of Tennessee prosecuted the case.
On eve of sentencing Kelsey points finger at Durham (again)
Brian Kelsey and Jeremy Durham were once close friends. But the bond between the two former state lawmakers appears to have broken when federal agents began inquiring about alleged campaign finance improprieties surrounding Kelsey’s bid for Congress in 2016.
Durham, who was ousted from the state House in September 2016 over allegations of serial sexual misconduct, has avoided charges in the case by cooperating with federal investigators. Kelsey, who faces a Friday sentencing hearing after pleading guilty to two felony counts, wants to avoid any time behind bars. In support of his effort to persuade U.S. District Judge Waverly Crenshaw to limit his punishment to probation, Kelsey’s legal team has been unpacking on Durham.
Kelsey’s latest filing argues he was far from the mastermind the government describes him as in the plot to shift money from his state account through three other Tennessee-based PACs to the American Conservative Union, which then spent $80,000 on radio and digital ads on his campaign’s behalf. (Kelsey made similar claims in a filing last week.)
Kelsey cut a $106,000 check to restaurateur Josh Smith’s The Standard Club PAC at a dinner in July 2016 in which Durham was also in attendance. On advice of counsel, Kelsey said, he stressed to Smith there were “no strings” attached to the donation and to “spend it however you want.” Smith, who was a codefendant before pleading guilty in the case, Durham, and Durham’s wife corroborated the statement to federal investigators.
But with such lack of direction from Kelsey, Durham (who testified to the grand jury Kelsey at one point told him “not to contact him”) said the ensuing transactions became “disorganized,” a “cluster,” and “mayhem.” Durham and fellow unindicted co-conspirator Andy Miller allegedly decided to go “rogue” by using some of the money originally donated to Smith to pay for attack ads.
“Initially, I did not tell Kelsey about my alternative plan to use the money for the attack ads,” the filing quoted Durham as telling the grand jury. Kelsey was “not happy” when he found about it, Durham said, and instructed him to “scrap the ads and send the money to the ACU.”
The filing notes that three days after the dinner at the Standard Club, the state attorney general released a report detailing allegations of sexual misconduct by Durham with 22 at the Capitol. Durham abruptly suspended his re-election campaign, which only got him more deeply involved in the Kelsey campaign, according to the motion.
All of a sudden, he had time on his hands, and he began calling Mr. Kelsey more frequently. He often sought Mr. Kelsey’s advice on his own dire situation: ‘Kelsey acted as a sounding board for Durham during Durham’s public relations crisis, and would offer Durham advice on how to proceed through the public relations issues.” With time on his hands, Durham also began to assert himself more aggressively into Smith’s funds in the Standard Club PAC.
Durham was not pleased when he found out how much money Kelsey had given Smith.
“I told Brian he was a fucking idiot for placing that much trust in Smith,” Durham recounted to grand jury, leading him to take a more direct hand in matters.
As for the independent expenditures themselves, Kelsey said his campaign team felt radio spots were an “antiquated” method for reaching voters “and internally mocked ACU’s poor choice of medium.” (Kelsey later married the former political director of the ACU.)
Durham never told the grand jury he had directed ad ACU’s campaign, but that “Kelsey allowed it to happen,” according to Kelsey’s filing.
Kelsey concluded that the government wants to make him out to be “some sort of con man.”
“This case is not about corruption,” Kelsey’s motion concludes. “Mr. Kelsey was not bribed, he did not recruit straw donors, and he didn’t swindle anyone.
Federal prosecutors want the judge to sentence Kelsey to 3 1/2 years in prison.
Kelsey: If Durham, Miller aren’t going to prison, he shouldn’t either
As former Sen. Brian Kelsey prepares for his long-delayed sentencing in federal court, his attorneys are arguing the Germantown Republican should receive probation rather than face any time behind bars.
Kelsey’s attorneys noted that while the government pursued criminal charges against him, it did not go after Jeremy Durham and Andy Miller “despite both of them having long and serious histories of misconduct.” Durham, a former state representative, and Miller, a businessman and prominent GOP donor, were listed as unindicted co-conspirators in the indictment.
“There are at least three individuals who were or should have been charged alongside Brian: his co-defendant Josh Smith, Jeremy Durham, and Andrew Miller,” according to the filing. Additionally, former American Conservative Union executive director Dan Schneider was not charged, “even though he made the ultimate decision to spend the funds on Brian’s behalf and, allegedly, coordinated with Brian’s agents.”
Durham was described in the indictment as the go-between for Kelsey and the American Conservative Union as Kelsey sought to move money from his state account to support his unsuccessful bid for Congress in 2016. Kelsey, who was the best man at Durham’s wedding, noted several shortcomings in his former friend in the motion filed late last week:
Despite knowing about his involvement with drugs, his illicit history with women, his expulsion from the General Assembly, and his extensive campaign finance violations, the government still gave Durham immunity in exchange for his testimony in this case and presumably stood by that grant of immunity despite his further illegal conduct in driving under the influence and injuring another person— which almost undoubtedly violated the terms of his non-prosecution agreement.
Kelsey’s attorneys not “Brian and Durham were friendly and commonly sought one another’s professional counsel” before their relationship soured following the latter’s expulsion from the House over his his “sexual interactions with 22 women.” But the allegations against Durham were public long before he was ousted from the lower chamber, including during the time the money was being funneled out of Kelsey’s state account. Here’s a timeline of events in 2016:
— January: Durham steps down as House majority whip and withdraws from Republican caucus amid widespread calls for his resignation (including from the governor, Senate speaker, and state GOP chair) over sexual misconduct allegations.
— April: A preliminary report from the attorney general’s office warns Durham may pose “a continuing risk to unsuspecting women” at the General Assembly.
— July 11: Kelsey and Durham have dinner at Josh Smith’s Standard Club. Kelsey gives Smith a $106,342 check from his state account. Much of the money ends up with the American Conservative Union.
— July 14: AG releases a report detailing allegations of inappropriate conduct with 22 women, including allegations of sexual relations with a 20-year-old intern. Durham suspends his re-election campaign.
— July 20: Kelsey and Durham communicate several times by phone an email, according to the indictment. The American Conservative Union starts to buy $80,000 worth of radio and digital ads as part of an independent expenditure for Kelsey.
– Aug. 4: Kelsey comes in fourth in the 8th Congressional District race, Durham loses Republican nomination to Sam Whitson.
— Sept. 13: State House votes 70-2 to oust Durham from the remainder of his term.
— Sept. 24: Durham is thrown out of a University of Tennessee football game for getting into a physical altercation with another fan. Kelsey, who was at the game with Durham, said he “didn’t witness anything unusual.”
Feds recommend 3 1/2-year sentence for Kelsey
Federal prosecutors are urging U.S. District Judge Wavery Crenshaw to sentence former Sen. Brian Kelsey to nearly 3 1/2 years in prison following his conviction to two felonies related to his 2016 congressional campaign.
“A 41-month term of imprisonment would deliver a message to all who have the privilege of participating in campaigns for public office that no political victory is worth the risk of a lengthy term in federal prison,” prosecutors said in court filing Friday. “To anyone who believes that a campaign finance crime is unlikely to be detected or unlikely to lead to a meaningful criminal penalty, this sentence would show that violations of these laws carry a high cost.”
Kelsey’s attorneys said the government’s recommendation is too high and that maximum punishment should be 33 months behind bars.
Kelsey pleaded guilty (though he later tried to revoke the agreement) to masterminding a scheme to funnel money from his state account through two other political action committees to the American Conservative Union, which then bought $80,000 worth of radio and digital ads to back his bid.
The government’s filing recounted allegations not included in the indictment or guilty plea, including that Kelsey donated money to fellow Republican lawmakers in the General Assembly in return for contributions to his federal campaign. Another alleged scheme made public for the first time involved Kelsey telling donors who had already maxed out to his campaign to instead make contributions to the suspended presidential campaign of a U.S. senator who visited West Tennessee on his behalf. While the recipient of the money wasn’t identified in the filing, former U.S. Sen. Rick Santorum of Pennsylvania made appearance on behalf of Kelsey days before the election, calling him “someone who’s young, someone who’s principled, someone who’s courageous.”
Kelsey replacing legal team, mulling litigation against former lawyers
Former state Sen. Brian Kelsey (R-Germantown) is replacing his legal team after a federal judge rejected his motion to vacate his decision to plead guilty to campaign finance crimes. He also wants to delay his July 27 sentencing date by at least a month.
In a court filing on Wednesday, Kelsey said he has hired J. Alex Little and Zachary Lawson of the Burr & Forman law firm as his new lawyers. They replace Paul Bruno, David Rivera, Jerry Martin, and David Warrington.
The move came amid what Kelsey’s new lawyers called “the deterioration of attorney-client
relationships, the potential for future litigation involving prior counsel, and the need to have counsel of choice representing him at sentencing.”
Little and Lawson asked District Judge Waverly Crenshaw for at least a 30 day delay so they can familiarize themselves with the sentencing materials and because of other state and federal court obligations on July 26 and July 30.
“There is one issue that might be raised as substantial mitigation in the sentencing memorandum, and this issue requires additional time to research and investigate,” Kelsey’s lawyers said. “But .. counsel believes that this can be accomplished within 30 days.”
New TNJ edition alert: Kelsey’s ‘big mistake,’ lawmakers demand shooter’s writings
The latest print edition of The Tennessee Journal is out. Here is what’s in it:
— Federal judge rejects Kelsey’s claim guilty plea was ‘big mistake’
— Statehouse update: Why ask when you can demand? Lawmakers seek shooter’s writings.
— From the campaign trail: Memphis residency ruling, Ogles gets another big endorsement, GOP race for vacated state House seat down to two candidates.
Also: Dolly Parton takes aim at politicians, Beth Harwell on “lazy” supermajorities, save the date for the Statesmen’s Dinner, and $700,000 for Cordell Hull repairs.
As always, access the your copy of the TNJ here.
Or subscribe here.
Judge rejects Kelsey effort to withdraw guilty plea
U.S. District Judge Waverly Crenshaw on Tuesday rejected former Sen. Brian Kelsey’s effort to withdraw his guilty plea on two felony counts related to funneling state funds through the American Conservative Union to support his unsuccessful congressional bid in 2016.
Kelsey argued he had been distracted by the terminal illness of his father and the birth of newborn twins when he pleaded guilty in November. Prosecutors argued the Germantown Republican was trying to make a tactical move to disadvantage the government by waiting more than 100 days before trying to nullify the deal.
Crenshaw scheduled a new sentencing date for late July.
