Political contributions and Bankruptcy and Banking & Finance and Carl Brizzi and Tim Durham

Lawmaker wants Durham donations returned

August 12, 2010

A Democratic lawmaker wants Indiana politicians and campaign organizations to return contributions they received from an Indianapolis businessman whose dealings are being investigated by the FBI.

State Rep. Ed DeLaney of Indianapolis said Thursday that contributions totaling more than $800,000 by Timothy Durham should be sent to a bankruptcy trustee for Ohio investment firm Fair Finance Co. Durham is a co-owner of the company, which was forced into bankruptcy earlier this year.

Trustee Brian Bash already has asked Indiana politicians and organizations to return the contributions. Most of the money went to Republicans, including $195,000 to Gov. Mitch Daniels, and at least $185,000 to the state Republican Party.

Durham gave the most money—$225,000—to his close friend Carl Brizzi, the Marion County prosecutor. Brizzi did not receive a letter from Bash when the state officials did because it took Bash's team longer to sift through local political fund-raising filings.

But the prosecutor's spokeswoman issued a statement Thursday saying that only $2,500 to $5,000 remains in campaign coffers. "If any of this money is linked to Fair Finance proceeds, it will be returned as requested by the trustee in Ohio," she said.

Bash has said that Durham owes Fair $54 million. He said the businessman spent some of the money on things like gambling, cars, artwork and political donations.

The FBI raided the offices of Fair Finance and Indianapolis-based Obsidian Enterprises in November. They were accused of being involved in a Ponzi scheme to defraud investors, but no criminal charges have resulted.

DeLaney said his request for the money to be returned was an "easier call" for a Democrat to make, since Republicans received most of the money.

"But on the ethical issue, it doesn't matter what party you belong," he said. "I just think it's better for both parties that the money go back."

Kelly Burgan and Joe Esmont, attorneys working for Bash, said Thursday that more than three politicians or organizations have responded to Bash's letters. But they cited confidentiality in declining to say who responded and what they said.

Asheesh Agarwal, an attorney who represents Daniels' Mitch for Governor campaign committee and his Aiming Higher political action committee, said he stood by a statement last week that the organizations do not intend to refund money already spent.

"Based on what we know now, it is not out of the question that some of the money could be returned, but we need to see more than a letter from an attorney," Agarwal said in the statement. "In fact, if a court finds wrongdoing, and these funds were the source, a refund of any remaining dollars would be appropriate."

Republican Attorney General Greg Zoeller, who received $11,000 in donations from Durham, said his campaign treasurer created a segregated account for the money.

"The reason I did this was to balance my respect for our legal system's presumption of innocence with concerns from my role protecting consumers that there may be future actions that might possibly involve restitution to investors," Zoeller said in an e-mail.

"I did receive a letter from the bankruptcy trustee but intend to continue to hold these funds until the U.S. Attorney's Office completes their investigation," Zoeller said.

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