Take a tour of a proposed Lexington city hall
The owner of a company whose executive was indicted this week on federal charges related to lying about campaign contributions to Lexington council members said Friday the company has done nothing wrong.
Timothy Wayne Wellman, an executive with CRM Companies, faces eight felony federal charges in relation to lying about funneling money to 12 “straw contributors” who donated money to Lexington-Fayette County Council campaigns. Wellman is also accused of tampering with witnesses and telling the witnesses to lie to federal investigators.
The indictment alleges Wellman was using straw contributors to funnel money to council campaigns to get a key contract — a new city hall building. CRM Companies bid on a proposal to move the Lexington-Fayette Urban County Government from its downtown buildings to the Lexington Herald-Leader building on Main Street in 2018.
Craig Turner, CEO and founder of CRM Companies, said Friday that Wellman was not involved with CRM’s city hall proposal.
“Wayne Wellman is a friend and partner on a number of business ventures that I have had over the years. However, with regard to the project to redevelop and convert the Herald-Leader building into the new city call, Wayne was not involved in any capacity on that development business venture or LLC,” Turner said in a written statement. “I fully expect his name to be cleared of any wrongdoing at the end of this unfortunate process and, in the meantime, CRM Companies will continue on with business as usual. “
The indictment alleges Wellman repaid those straw contributors and directed the contributors to lie to federal investigators about where the money came from. Straw contributors are used to circumvent campaign finance laws that limit the amount any one contributor can donate.
Kent Wicker, Wellman’s lawyer, has said Wellman will fight the charges. Wicker called Thursday’s indictment “ a work of fiction.”
A committee of city employees scored the bid proposals for a new city hall. No city council members were on the bid scoring committee. CRM Companies received the top score of 94.7 points in June 2018, beating three other proposals. Ultimately, the council opted in September not to move forward with negotiations with CRM Companies. Plans for a new city hall are now on hold.
Susan Straub, a spokeswoman for the city, said the city is not aware of federal investigators asking for any documents related to CRM’s proposal or asking to speak to any of the city staff on the bid selection committee.
The indictment alleges that during the May primary, “two sitting council members received large personal campaign contributions to their campaigns from employees of CRM.”
The indictment says in September 2018, a federal grand jury was convened to investigate “complaints and suspicions that the campaign contributions by employees of CRM to two council members were to influence their votes regarding CRM’s proposal for relocating city offices.”
The indictment does not name the Lexington-Fayette Urban County Council members. Nor does it allege the council members did anything wrong.
Campaign finance reports show Vice Mayor Steve Kay and then-Councilman Kevin Stinnett each received campaign contributions from at least five CRM employees between March and May. Both also received contributions from Wellman. That’s more than any other sitting council member during the May primary, according to Kentucky Registry for Election Finance reports. Stinnett was running for mayor at the time. Kay was running for re-election. It’s not clear if the CRM employees who contributed to either Kay or Stinnett’s campaigns were the straw contributors mentioned in the indictment. The alleged straw contributors are only mentioned by initials in federal court records.
Stinnett, who is no longer on council, said Thursday he had no comment because he had not done anything wrong.
Kay said candidates have no way of knowing if someone who contributes to their campaign is a straw contributor.
“I have no way of knowing of what someone’s resources are when they contribute,” Kay said. “I always assume the person who signed the check has the resources.”
As vice mayor, Kay was asked by the administration if a council member wanted to be placed on the bid scoring committee for the city hall proposals. Kay agreed with the administration that it was best for a council member not to be placed on the committee to avoid the appearance of impropriety.
CRM had an option to buy the Herald-Leader building at 100 Midland Avenue at the time it bid on the city hall project. CRM no longer has an option to buy the property, said Jeanne Segal, a spokeswoman for McClatchy, the Herald-Leader’s parent company. The Herald-Leader is still in the building at 100 Midland Avenue. Segal said CRM’s option to buy expired in 2018.
Segal did not answer a question on whether the Herald-Leader building was still for sale.
CRM Companies has a host of real estate management contracts and other developments. According to its web site, it’sportfolio includes several Raising Cane’s restaurants in central Kentucky. It also received a contract with D.W. Wilburn to build a new state office building in Frankfort in December 2017. It also has the contract to manage the former Fayette County courthouse.