Kelsey co-defendant Smith to plead guilty in federal campaign finance case

The co-defendant in a federal campaign finance case against state Sen. Brian Kelsey is set to plead guilty to one charge of funneling “soft money” to the senator’s congressional campaign six years ago, court documents show.

Josh Smith, the owner of The Standard Club in Nashville, will change his plea of not guilty to guilty on count two of the federal indictment as he faces multiple campaign finance violations in an effort to bolster Kelsey’s 2016 congressional campaign. 

Federal prosecutors claim Kelsey and Smith conspired with others to illegally shift a total of more than $80,000 from his state account to buy ads that supported his federal race.

A Nashville grand jury returned a five-count indictment against Kelsey, a Germantown Republican, and Smith in October 2021 after more than four years of investigation. 

The second count against Smith claims he “solicited, received, directed, transferred and spent” more than $25,000 as an agent for Kelsey’s 8th District race campaign, The Tennessee Journal first reported Tuesday.

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,” funds not subject to Federal Election Commission requirements, from the senator’s state account through The Standard’s political action committee and then to the American Conservative Union and Citizens 4 Ethics in Government, which purchased advertising to support his federal campaign.

The filing claims Kelsey gave Smith a check for more than $106,000 in July 2016 during a gathering at The Standard, an upscale restaurant, to be transferred from his campaign account to The Standard PAC.

Kelsey’s future wife, Amanda Bunning, director of government affairs for the American Conservative Union at the time of the incidents, also sent emails to Smith asking him about making contributions to her organization, according to documents.

Kelsey, a Germantown Republican who is not seeking re-election this fall, finished fourth in the congressional race. Shortly after being indicted, he proclaimed his innocence on the Senate floor and blamed President Joe Biden’s Administration for coming after him because of his conservative political views, even though Biden wasn’t in office when the investigation started. His trial is set for January 2023.

The Campaign Legal Center and Democracy 21 filed a complaint in June 2017 with the Federal Election Commission and requested the Department of Justice investigate whether Kelsey’s congressional campaign committee engaged with the American Conservative Union, Citizens 4 Ethics in Government, a political action committee founded by Andrew Miller, The Standard Club’s PAC and several state legislators to knowingly and willfully violate federal campaign finance laws.

During the 2016 campaign, Kelsey’s state political action committee, Red State PAC, contributed about $20,000 to state legislators who then gave funds to his congressional race, according to reports.

The organization’s complaint also noted there was “compelling evidence” that showed Kelsey’s Red State PAC gave $106,341 to Standard Club PAC, which then gave $30,000 to the American Conservative Union and $97,000 to Citizens 4 Ethics in Government, both of which reportedly made large independent expenditures for radio/digital advertising backing Kelsey’s congressional campaign.