Mayor Brainard’s tenuous grasp on his campaign finances.

A campaign finance report filed by the campaign of Carmel Mayor Jim Brainard is raising a lot of eyebrows for what it’s missing. In his winning re-election campaign last year, Brainard’s campaign spent over $547,000. His campaign disclosure form, however, itemizes very few expenditures. More than $481,000 was paid to Brainard’s campaign consultant, Stakeholder, Inc., a firm owned by Allan Sutherlin. That’s 88% of his total expenditures!

Last year, an Allen County grand jury indicted Fort Wayne GOP mayoral candidate Matt Kelty for failing to disclose the source of a six-figure loan he received from three supporters. Instead of reporting the names of the three supporters, Kelty reported the money as a loan to his campaign committee from himself after the individuals loaned him the money. That according to special prosecutor Dan Sigler violated Indiana’s campaign finance law.

Similarly, the state’s campaign finance law requires candidates to itemize aggregate expenditures to any person or business exceeding $100. That same law allows the expenditure of political contributions to defray any expenses reasonably related to the person’s campaign, continuing political activity or activity related to the person’s service in an elected office. If a candidate can simply transfer the bulk of his political contributions to a campaign consultant’s firm to expend on behalf of his campaign, how can it be determined if the requirements of the law are being fulfilled? Why not just make every expenditure for your campaign using a VISA credit card and show every expenditure of your campaign as a payment to VISA?

A strong argument can be made that what is taking place with the expenditures of Brainard’s campaign is the exact same thing in reverse as what happened in Matt Kelty’s campaign. Clearly, the spirit of public reporting of both campaign receipts and expenditures, if not the letter of the law, was undermined by both campaigns. The public has no way of knowing what Stakeholder, Inc. did with all the money paid to it by Brainard’s campaign. How would the public know if funds weren’t being given to Brainard, for example, instead of being spent for direct mail expenses, advertising and other campaign expenditures permitted under Indiana law? Brainard’s campaign, despite reporting more than $551,000 in campaign contributions, reports a $20,000 loan from Brainard. Critics also point out that Stakeholder, Inc.’s owner, Allan Sutherlin, bankrupted another consulting firm he operated during the 1990s, leaving his employees and creditors unpaid.

Matt Kelty amended his campaign finance forms to show the true source of all of his receipts after the public learned what he had done. That wasn’t enough to save him from an indictment. Jim Brainard at least owes the public an accounting of how all the money his firm paid to Stakeholder, Inc. was spent at a minimum. Perhaps the Hamilton County Election Board should consider whether more action is required.

A big hat tip to Ed Feigenbaum of the Indiana Legislative Insight for noting the irregularity in Brainard’s campaign finance report this week. Feigenbaum had warned during the Kelty investigation that this very problem could arise on the expenditure side of campaign finance reports. Little did he know how soon his warning would become reality.