The trustee in the bankruptcy liquidation of Fair Finance Co. is pressing Gov. Mitch Daniels and other prominent Indiana politicians to return money donated to their campaigns by Fair owner Tim Durham.

Trustee Brian Bash sent letters nearly two months ago to politicians who he says collectively received at least $900,000 in donations that Durham funded with borrowings from the Akron, Ohio, finance firm. Durham made some donations to Democrats but in far smaller sums than to Republicans.

The political donations were part of $54 million Durham borrowed from Fair, according to a slide show Bash presented to company investors on Monday in Ohio. Durham, a prominent Republican fundraiser, also spent Fair money on gambling, interior decorating, real estate and his other business ventures.

Only three politicians have responded to the letters—including Daniels—but none has yet committed to give Durham's donations back, according to attorneys working for Bash.

"We are disappointed that we've not had more responses," said Kelly Burgan, one of Bash's attorneys. She added, "It's not uncommon for politicians to return tainted funds."

The letters are the first step in the trustee's efforts to recover the money from politicians, Burgan said. But he has additional legal options, such as moving to have a judge declare Durham's donations fraudulent transfers. Bash intends to use all legal tools he has to get the money back from Hoosier politicians, Burgan said, but his next steps will depend on the circumstances of each donation.

Daniels received at least $195,000 in Fair money from Durham, according to Bash's calculations. The Indiana Republican State Committee garnered at least $185,000. The House Republican State Committee got $60,000. And the Greater Indianapolis Republican Finance Committee collected $33,000.

Durham gave the most money—$225,000—to his close friend Carl Brizzi, the Marion County prosecutor. Brizzi has yet to receive a letter because it took Bash's team longer to sift through local political fund-raising filings, compared with state and federal records, which are easily searchable online, according Joe Esmont, another attorney working for Bash. Esmont said a letter should go out to Brizzi within the next week.

Asheesh Agarwal, an attorney who represents Daniels' Aiming Higher political action committee and his Mitch for Governor Campaign Committee, acknowledged receiving a letter from Bash. But he indicated in a written statement that Daniels' 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 fact, if a court finds wrongdoing, and these funds were the source, a refund of any remaining dollars would be appropriate."

Likewise, the Indiana Republican Party said it will wait for a court ruling before giving any of Durham's money back.

"It has long been our practice to spend the money we raise in the election cycle in which it was donated. This is certainly the case with Mr. Durham's contributions, as his donations came several years ago," Trevor Foughty, a spokesman for the party, said in a written statement. "At this point, it is too premature to say if we would deviate from that practice, and we will withhold further judgment and comment until a court rules in the case."

The Durham loans represent the largest chunk of more than $168 million in related-party loans issued by Fair. The company’s lending spree began shortly after Durham and partner Jim Cochran bought the business in 2002, according to securities filings.

Fair Finance shut down in late November, after FBI agents raided its offices and seized records. The same day, the Justice Department filed court papers alleging Durham was operating Fair as a Ponzi scheme, selling new investment certificates to pay off prior purchasers.

Fair had 5,000 investors, who are now owed more than $200 million.

"Most of Fair Finance Company’s creditors are individuals of modest means. Many are retirees who put their life’s savings into Fair Finance 'investment certificates,' and are now scrambling to survive," Bash wrote in his letters to politicians' campaign committees and fund-raising groups. He added, "I anticipate that the committee will make the honorable decision to voluntarily return the contributions of Durham and his related entities to me, to be used in furtherance of compensating the victims."

An FBI investigation continues. Durham has not been charged with a crime.

Durham, 47, has acknowledged owing lots of money to Fair, but denied defrauding investors. In court papers, his attorneys contend offering circulars provided to prospective purchasers of investment certificates outlined the risks, including that they carried no government guarantee.