scandals

Judge dismisses Durham lawsuit seeking pension and insurance benefits

U.S. District  Court Judge Aleta Trauger dismissed Friday a lawsuit filed by former state Rep.  Jeremy Durham seeking to restore lifetime health care and pension benefits he lost when the state House voted to expel him last year, according to The Tennessean. Continue reading

Registry votes to fine Durham $465K for campaign finance violations

The Registry of Election Finance board voted today to levy $465,000 in civil penalties against former state Rep. Jeremy Durham for multiple violations of state campaign finance laws. That’s the biggest such fine ever imposed by the watchdog agency in its 26-year history.

Continue reading

Bill restricting campaign money investment goes to governor

The House gave unanimous approval Monday evening to a bill to put new restrictions on investments of money held in state political campaign accounts. It was inspired by a number of questionable investments found in an audit of former state Rep. Jeremy Durham’s  funds.

The measure (SB377) had passed the Senate earlier (previous post HERE, including a press release) and it now goes to the governor for his signature.

Sponsors are Sen. Doug Overbey, R-Maryville, and Rep. Gerald McCormick, R-Chattanooga. The bill declares campaign funds must be deposited in a financial institution insured by the FDIC or the national credit union administration that is authorized to do business in the state.

The Durham audit found the Franklin Republican, expelled from his seat last year, had invested more than $100,000 of campaign money in a company operated by a major political donor and also used the funds to make substantial loans to a professional gambler and his wife. That’s not illegal under current law, though Durham is under investigation for multiple other allegations of activity that would be illegal.

Democrats call for repeal of ‘Jeremy’s law’

From the Associated Press

Democrats at the state Capitol on Tuesday blasted their Republican colleagues for not doing enough to prevent sexual harassment on the hill, after a freshman Republican lawmaker resigned surrounding allegations of sexual misconduct.

Rep. Mark Lovell, a fair and carnival operator from suburban Shelby County submitted his resignation letter on Tuesday. Lovell said in the letter that the elected position ended up being more demanding than he expected and that he needed more time to devote to his business interests and family.

Democrats though quickly sensed blood in the water and took the opportunity to strike.

“This is unacceptable behavior from people who are elected to the general assembly,” said Sherry Jones, a Democrat from Nashville.

Jones and two other top Democratic lawmakers addressed reporters Tuesday afternoon and called on lawmakers to repeal what’s known as Jeremy’s Law.

The bill, which passed last year, was unofficially named after former Rep. Jeremy Durham, who was expelled from his seat surrounding allegations he sexually harassed more than two dozen women at the Capitol.

That bill mandates any victim of sexual harassment who sues the state and loses must then pay for the legal fees of the defense.

“I would say nobody up here is safe anymore. If we can go through all of the sexual harassment issues that happened last year, and you still have somebody…who would do something like that again, what does that say about this place?” Jones added.

Continue reading

Audit helps keep Durham ‘in the crosshairs’ of fed prosecutors?

Following up on the Registry of Election Finance audit of Jeremy Durham’s campaign finances, The Tennessean quotes a former federal prosecutor as sayiing the report is “packed with problematic stuff” for the former legislator that will keep him “in the crosshairs” of an ongoing federal investigation. The article goes on to give a couple of comparisons between federal prosecutions in other states and matters raised in the Durham audit.

Before federal investigators indicted North Carolina state Sen. Fletcher Hartsell Jr. on more than a dozen counts of money laundering, mail fraud, wire fraud and tax evasion, they asked him why he spent campaign money on haircuts.

Hartsell said he is a “hippie” and only trims his locks because he’s a lawmaker, according to federal court documents. Investigators called this rationalization an attempt to “perpetuate his scheme to defraud.”

In comparison, when a state auditor asked ex-Tennessee lawmaker Jeremy Durham why he spent more than $1,400 of campaign funds on lawn care, he reportedly told the investigators he needed the lawn mowed at his house in case he hosted fundraisers there.

In pleading guilty to a federal wire fraud charge this month, a former mayor in New York admitted to using campaign contributions for his own purposes. The wire fraud charge stemmed from the former mayor moving fraudulent funds between bank accounts, court documents state.

In the Durham audit, Tennessee campaign finance officials found Durham spent more than $10,000 of donor money on personal items, including alcohol and a plane ticket for his wife. He also routinely moved funds between his campaign, political action committee and personal and professional bank accounts.

Both the North Carolina and New York cases demonstrate strategies the FBI and U.S. attorney for Middle Tennessee could use if they indict Durham.

Durham’s lawyer threatened to sue Registry over audit release

In releasing an audit indicating hundreds of campaign finance law violations by former state Rep. Jeremy Durham, the Registry of Election Finance board ignored a threatened lawsuit by Durham’s lawyer, Peter Strianse, according to The Tennessean. Now Strianse says he and Durham have not decided whether to follow through on the threat.

In a Feb. 6 letter sent to a staff attorney for the registry… Strianse said releasing the audit to the public would be “premature and unfairly prejudicial” to the Franklin Republican, reflecting an argument he used prior to the audit’s release on Wednesday.

“Obviously this matter is of great public importance and personal importance to Mr. Durham. Respectfully, it is our belief that many of the findings contained in the Draft Report are clearly erroneous, contrary to law, and require significant correction and amplification,” Strianse wrote in his three-page letter, obtained by The Tennessean through an open records request.

Registry Treasurer Tom Lawless, who is also an attorney and served as chairman when the audit began, waved off the threat.

“It’s a knee-jerk reaction, almost as if the registry would be intimidated by that. Which couldn’t be further from the truth. There’s a complete immunity,” Lawless said in a phone interview Friday.

“The truth, generally, is an absolute defense in law.”

…“Libel and slander remain actionable torts when the individual in question is a public figure,” Strianse said (in the letter). “The release of the Draft Report over Mr. Durham’s timely objection may demonstrate that the challenged material was published with actual malice if it is prematurely released on 2/8/17 before Mr. Durham has had an opportunity to respond and proper findings have been made by the Board.”

More on Durham audit — up to 500 violations, June hearing set

From The Tennessean’s overview story:

Former state Rep. Jeremy Durham violated state campaign finance law possibly as many as 500 times, including spending more than $10,000 of campaign funds illegally to buy an airplane ticket for his wife, custom suits, spa products and sunglasses, according to a state campaign finance audit released Wednesday.

He also used campaign money for more mundane bills, including lawn care and paint for his home office, the audit shows.

Durham made at least 55 illegal purchases using money given by donors; the state report outlines 39 expenses, but some include multiple purchases. The former Franklin lawmaker also used campaign funds to invest more than $100,000 in the company of a wealthy GOP donor, loan nearly $30,000 to a professional gambler who has a criminal past and loan $25,000 to his wife, auditors found.

Durham paid himself $7,702 from his campaign account for expenses he’d already been reimbursed for by the state, according to the audit. The practice is more commonly known as double-dipping.

…In addition to the illegal use of campaign finances, the audit details how Durham invested more than $100,000 in Life Watch Pharmacy, a company owned by Andrew Miller, a prominent Republican donor who has advocated for anti-Islam policy in the state.

…The report also states David Whitis, a professional gambler who has a criminal record, received three checks totaling $29,800 from Durham’s campaign account…Two of the checks to Whitis indicate the funds are a “loan to friend.” Additional information provided to the auditors by Durham states the money was “capital for a startup venture.”

From WPLN’s report:

Durham’s attorney has a “laundry list” of objections to the findings. Peter Strianse also says he thought the report was a draft that would not yet be distributed widely.

“I understand if that’s they’re procedure and those are the steps we have to go through,” says the lawyer. “But why in the world would you make public a report that you know is going to be subject to significant challenge?”

But a Registry official says the office followed standard protocol.  

Durham’s attorney has until May to respond to the findings, before a hearing slated for June.

The Franklin Republican was expelled from the legislature last year following nearly two dozen anonymous claims of sexual harassment.

A federal investigation into potential campaign finance violations is ongoing. 

 

Registry audit finds multiple campaign finance violations by Durham

The Registry of Election Finance staff today released its audit of former state Rep. Jeremy Durham’s campaign disclosures at a meeting of the Registry board. Here are the top-listed findings:

1. Jeremy Durham violated T.C.A. §2-10-105(a) and T.C.A. §2-10-107(a)(2)(A) by failing to report $36,334.95 in campaign contributions.

2. Jeremy Durham violated T.C.A. §2-10-105(a) by reporting $4,600 in contributions where the associated funds cannot be identified as being deposited into a bank account.

3. Jeremy Durham violated T.C.A. §2-10-105(a) by failing to report $10,623.70 in interest earned on campaign funds and T.C.A. §2-10-114(b)(1) by depositing $1,637.50 of that interest into his personal account.

4. Jeremy Durham violated T.C.A. § 2-10-302 by receiving $5,500 in contributions over the campaign limits.

5. Jeremy Durham violated T.C.A. §2-10-105(a) by reporting $6,500 of contributions intended for PACs he controlled as contributions to his campaign account.

6. Jeremy Durham violated T.C.A. § 2-10-107(a)(2)(A) by failing to accurately disclose the names of several contributors. 7. Jeremy Durham violated T.C.A. §2-10-105(a) and T.C.A. § 2-10-107(a)(2)(B) by failing to accurately report campaign expenditures.

8. Jeremy Durham violated T.C.A. §2-10-114 by disbursing $10,176.35 in campaign funds for prohibited activities.

9. Jeremy Durham made cash withdrawals and reimbursements to himself in the amount of $11,927.43 from campaign funds without support which is a violation of T.C.A. §2-10-114(b)(1).

10. Jeremy Durham reimbursed $7,702.07 in expenses to himself from his campaign account that were also reimbursed by the State of Tennessee which is a violation of T.C.A. §2-10-114(b)(1).

11. In violation of T.C.A. §2-10-212(c), Jeremy Durham failed to retain sufficient expense records to determine whether all expenditures were allowable.

12. Jeremy Durham disbursed $64,800 for promissory & convertible note activity which appears to be unallowable per T.C.A. §2-10-114(b)(1).

The full report is available by clicking on this link: durhamaudit

Durham spent campaign funds while not campaigning

Former state Rep. Jeremy Durham spent $1,353.91 in campaign funds after he suspended his campaign for reelection, reports the Nashville Scene. On Sept. 12, the night before he was expelled from the state House of Representatives, he watched Monday Night Football at Buffalo Wild Wings in Nashville and he paid for it with campaign funds.

Fourth quarter campaign filings were due today, so for a lark, Pith looked up Durham’s report. What we found is that he spent $1,353.91 after he dropped out of the race.

Durham suspended his reelection campaign on July 14 after the release of the salacious and damning Attorney General’s report chronicling his extensive sexual misconduct and harassment. He officially lost his primary on Aug. 4. Thus, Durham had no real reason to spend his campaign funds on himself after that. He could have legitimately donated to other people’s campaigns, of course, but that’s not what this report shows.

First of all, the fourth quarter filing period runs from Oct. 1 to Dec. 31. Two of Durham’s claimed expenses are from August and one is from September, which means they should have been listed on his third quarter report. But according to the filing, Durham had $635.97 in unitemized expenses — $64.71 in auto expenses, $15 for a donation, $328.69 on food and beverages, $105 in gas, $21.57 in internet expenses and $101 in parking.

Per itemized expenses, Durham spent $259.94 at Cajun Steamer on Aug. 15, $119.74 at Grays on Main on Aug. 19, $113.57 at Buffalo Wild Wings on Sept. 12, and $104.69 at Kroger on Oct. 1. He also spent $120 for “dues/subscriptions” at Franklin’s Masonic Hiram Lodge on Nov. 17.

A second guilty plea in Rutherford County sheriff corruption case

Joe Russell, former administration chief for the Rutherford County sheriff’s office, pleaded guilty Friday for his role in illegally profiting off inmates through JailCigs sales at the county jail, reports the Daily News Journal.

Russell, who was fired in November, joined co-defendant and ex-sheriff Robert Arnold this week in entering identical guilty pleas.

Arnold pleaded guilty to wire fraud, honest services fraud and extortion Wednesday after receiving $66,790 from JailCigs electronic cigarette sales from December 2013 through April 2015, court records show. Russell received $52,234 from the company over that same period, according to a Tennessee Comptroller report released Nov. 16.

U.S. District Court  Judge Kevin Sharp asked Russell if the fired administration chief understood waiving rights to a jury trial by pleading guilty.

“Yes, your honor,” said Russell, who’s guilty plea agreement with the government is under seal.

Fellow co-defendant John Vanderveer, the uncle of Arnold, has not entered a guilty plea, and continues to await a Feb. 7 jury trial in Nashville and face a 14-count federal grand jury indictment issued in late May 2016.

The judge scheduled Russell’s sentencing hearing at 1:30 p.m. May 19, which follows the 10:30 a.m. May 8 sentencing hearing for Arnold.

Each count, at the judge’s discretion, carries up to 20 years in prison, a $250,000 fine, supervised release of not more than three years and a $52,500 restitution payment from electronic cigarettes revenues from the JailCigs business to the Rutherford County government.

“I am not bound by that,” Sharp told Russell. “Your sentence could be more harsh or less harsh.”

Inmates at the county jail ordered about 10,500 JailCigs. Arnold initially had planned to share a $5 cut per $12.95 order with the county government, but decided after being upset with county commissioners and the mayor in 2014 to keep the “commission owed to Rutherford County,” prosecuting attorney Mark Cipolletti said.

“He believed he would need extra money for his campaign,” said Cipolletti, noting that JailCigs revenues paid for about half of an Arnold campaign event.