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.”
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.
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