Former Sen. Brian Kelsey, flanked by attorneys Alex Little and Zack Lawson, leaves the Fred D. Thompson Federal Courthouse in Nashville on Aug.11 after being sentenced to 21 months in federal prison. (Photo: John Partipilo)
The U.S. 6th Circuit Court of Appeals will not allow former Memphis state Sen. Brian Kelsey (R-Germantown) to rescind his guilty plea for campaign finance violations, upholding his 21-month prison sentence.
Two years ago, Kelsey pleaded guilty to directing a secret plan to funnel over $100,000 from his state campaign account to boost his failed bid for a U.S. Congressional seat in 2016.
Kelsey tried to rescind his decision, claiming he wasn’t of sound mind because his wife had recently given birth to twins and his father, who later died, was sick.
A U.S. District judge denied Kelsey’s attempt to change his plea, but he appealed the ruling. Kelsey was allowed to remain out of prison during his appeal.
Under campaign finance regulations, a state lawmaker cannot use their state campaign account to benefit their federal campaign.
Prosecutors said Kelsey shifted money from his state campaign account through two political action committees, including one operated by Nashville club owner Joshua Smith.
Smith then gave the money to the American Conservative Union, which bought radio and digital advertisements.
As part of the investigation, Smith pleaded guilty about two weeks before Kelsey. He received no prison time but was sentenced to five years of probation and fined $250,000.
Tennessee Lookout is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Tennessee Lookout maintains editorial independence. Contact Editor Holly McCall for questions: info@tennesseelookout.com. Follow Tennessee Lookout on Facebook and X.
Brian Kelsey in happier times. (Photo: Brian Kelsey | Facebook)
To vary that old TV shibboleth about the thrill of victory vs. the agony of defeat, sometimes there are a fair number of agonies associated with victory. As one example, many a victorious politician has had to grapple with resultant financial difficulties. Often enough, the pay the winner receives for his newly acquired public responsibility is less than the income source he left behind.
This is true, for example, in the case of newly installed DA Steve Mulroy, who upon assuming office basically had to take a pay cut from his former job as the Bredesen Professor of Law at the University of Memphis. And, like numerous other electoral winners, Mulroy finds himself saddled with a sizable campaign debt. Fundraisers during the course of a campaign are fundamental to the process of election. Equally commonplace these days is the post-election fundraiser designed to help retire the aforesaid campaign debt.
One was scheduled for Mulroy on Monday night of this week at the Tennessee Brewery by helpful angels Billy Orgel and Craig Weiss. And, as is typical when the beneficiary is a new office-holder, the number of good-willed benefactors can constitute something of a Who’s Who, political-wise. The co-hosts for the Mulroy affair included 9th District Congressman Steve Cohen, Shelby County Mayor Lee Harris, state Senator Raumesh Akbari, former Shelby County Mayor Bill Morris, the several Byrd brothers of longtime Democratic provenance and the Bank of Bartlett, and J.W. and Kathy Gibson.
• ’Tis the season for feasts aplenty, but for some in the political world, the menu is replete with humble pie and side dishes of crow. One such unfortunate is former state Senator Brian Kelsey, who, as was noted last week in the Flyer, had his law license suspended by the Tennessee Supreme Court as a consequence of his having pleaded guilty in November to two felony charges stemming from a campaign finance case. Further action on the law license could be forthcoming from the Tennessee Board of Professional Responsibility, the state’s formal disciplinary body for such matters.
After asking for and receiving several postponements of a pending trial, Kelsey had resolved upon a plea agreement in the wake of co-defendant Josh Smith’s entering a plea of guilty. The offense involved essentially a conspiracy to illegally recycle funds from the state senator’s state-government campaign fund into a fund to fuel a federal campaign — what turned out to be an unsuccessful race for the District 8 congressional seat in 2016. Both Smith and Kelsey face sentencing on June 9th. According to the Tennessee Journal, “Kelsey would face at least 18 to 24 months in prison under calculations included in the plea agreement. His penalties are enhanced because he was the ‘organizer, leader, manager, or supervisor’ of the criminal activity.”
Kelsey could be eligible for a reduction upon a proper assumption of responsibility for his actions. But prosecutors have indicated that if Kelsey is insufficiently contrite in his allocution and other conduct before he is sentenced, they would seek to tack on an additional nine months in prison.
Interestingly enough, the American Conservative Union, which was involved in the channeling of Kelsey’s campaign funds but was not itself subject to indictment, recently rated the Tennessee legislature as the second-most conservative in the nation and Kelsey, while still in office, as the third most conservative member of the state Senate.
• Karen Camper, an announced candidate for Memphis mayor in 2023, has evidently decided not to relinquish her duties as state House Democratic leader next year, having accepted a vote of reelection to that post from her Democratic caucus members.
Joshua Smith leaving the Fred D. Thompson United States Courthouse in Nashville. (Photo: John Partipilo)
Joshua Smith, owner of The Standard social club, pleaded guilty Wednesday in a campaign finance scheme to funnel money from state Sen. Brian Kelsey’s campaign fund to his failed congressional bid in 2016.
Smith, 45, changed his plea to guilty in front of U.S. District Court Judge Waverly Crenshaw on count two of a federal indictment, admitting that he “solicited, received, directed, transferred, and spent” more than $25,000 in “soft money” as an agent for Kelsey’s 8th Congressional District campaign. It is illegal to spend that type of money not subject to federal limitations and reporting requirements on a federal campaign.
Smith “secretly and unlawfully funneled $67,000” in “soft money” from Kelsey’s Senate campaign committee to a national organization, the American Conservative Union, that paid for radio and digital ads backing Kelsey’s campaign, according to the indictment.
Accompanied by attorney Phillip S. Georges, Smith waived his right to a trial and appeal Wednesday and told the judge he had spoken “extensively” with his attorney before making the decision. Sentencing is set for June 9th when he faces a maximum of five years in prison and a $350,000 fine.
Kelsey’s trial is scheduled for late January 2023.
Georges said in a statement last week that Smith accepts responsibility for his involvement and if called to testify will be “truthful regarding the activities that took place.”
Joshua Smith leaving the Fred D. Thompson United States Courthouse in Nashville. (Photo: John Partipilo)
Prosecutors say Kelsey and Smith conspired with others from February 2016 through mid-October 2016 to violate campaign finance laws and illegally move “soft money” totaling $91,000 from the senator’s state account through the The Standard’s political action committee and Citizens 4 Ethics in Government to the American Conservative Union, which purchased advertising to support Kelsey’s federal campaign.
A Nashville grand jury returned the five-count indictment against Kelsey in October 2021 after more than four years of investigation. The Germantown Republican, who has called the investigation a “witch hunt,” is not seeking re-election this year.
The federal indictment claims Kelsey gave Smith a check for more than $106,300 in July 2016 during a gathering at The Standard, an upscale restaurant in downtown Nashville, to be transferred from his campaign account to The Standard PAC and Citizens 4 Ethics in Government, which was run by Andrew Miller, and ultimately to the American Conservative Union.
Kelsey’s future wife, Amanda Bunning, director of government affairs for the American Conservative Union at the time of the alleged incidents, also sent emails to Smith asking him about making contributions to her organization, according to federal documents.
Former state Rep. Jeremy Durham and Miller are believed to be unindicted co-conspirators in the scheme.
Bunning was director of government affairs for the American Conservative Union and a member of its senior management team from late 2015 to March 2017 and managed its political expenditures, according to the indictment. She and Kelsey got engaged around July 2017 and were married in January 2018.
She received and sent a list of Kelsey’s Senate achievements, according to the indictment, and worked closely with a member of the ACU’s senior management team, which oversaw daily operations and directed all aspects of its political activities, including political expenditures.
In July 2016, the ACU reported to the Federal Election Commission that it made independent expenditures for a radio and digital ads to back Kelsey when the expenditures were coordinated with Kelsey and his agents and were not independent, according to the indictment.
Tennessee Lookout is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Tennessee Lookout maintains editorial independence. Contact Editor Holly McCall for questions: info@tennesseelookout.com. Follow Tennessee Lookout on Facebook and Twitter.
