Indiana senator returning cash from troubled financier

An Indiana state senator returned campaign contributions from a financier now charged with running a Ponzi scheme and criticized fellow Republicans who haven't made similar refunds — a group that includes Gov. Mitch Daniels and U.S. Sen. Richard Lugar, though he didn't call out anyone by name.

Sen. Mike Delph, R-Carmel, wrote a letter to a bankruptcy attorney Monday saying he's returning the $10,000 given to his campaign in 2006 and 2007 by Timothy Durham, a former Indianapolis businessman charged with running a scheme that defrauded investors of more than $200 million.

The investigation into Durham's dealings spurred calls for Daniels and other Republicans to return more than $800,000 in contributions. Daniels received about $195,000 between 2003 and 2009, but says the money has been spent and there is nothing to return. Lugar received about $3,700 from Durham in 2005, and campaign spokesman David Willkie said the contribution is a non-issue and was made in a previous federal campaign cycle.

Delph — who has been mentioned as a possible 2012 challenger to Lugar — wrote in the letter obtained by The Associated Press that he is troubled that some Republicans aren't returning Durham's donations. Delph did not mention Daniels, Lugar or any other Republicans by name.

Delph did not mention Democrats who also received donations from Durham, including former Indianapolis Mayor Bart Peterson and former Rep. Baron Hill.

"I am embarrassed as a citizen and a Republican at the attitude and comments of others who received contributions," Delph wrote. "Like them, monies received in 2006 and 2007 were already spent. However, I recognize my responsibility of maintaining integrity in the system and the need to do that which I believe to be just, fair, and right."

At least one other Republican has already returned money. Former Republican candidate for Marion County sheriff Tim Motsinger returned all financial contributions and loans that his campaign got from Durham, who served as his campaign finance manager. He said the loss of funds made him unable to compete and withdrew from that race.

Delph wrote in the letter Monday that the bankruptcy attorney has assured him that the $10,000 he returned will go toward compensating victims, and he said the issue has bothered him for months.

"Equally troubling however, is the response of several of my colleagues who suggest just because monies have already been spent in campaigns of years past that they are somehow absolved of any responsibility for their participation in the ripoff of others," Delph wrote.

Delph, best known in the Statehouse for pushing legislation aimed at cracking down on illegal immigration, has support from some tea party voters who are frustrated with Lugar for siding with President Barack Obama and Democrats on certain issues. Delph says he's currently focused on the legislative session and won't address his possible candidacy until after that ends. Indiana State Treasurer Richard Mourdock, another tea party favorite, has already announced he plans to challenge Lugar for the Republican nomination in next year's primary.

Durham and two business partners were arrested last week after being indicted on 12 counts, including conspiracy to commit wire and securities fraud, wire fraud and securities fraud. They're accused of defrauding about 5,000 investors in Akron, Ohio-based Fair Finance Co. of more than $200 million.

More coverage of the Durham case can be found here.

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