Well-known KY Democratic political leader gets 21 months in prison in campaign case
Lexington businessman Jerry Lundergan, a longtime force in Kentucky Democratic elections convicted of making illegal campaign contributions to a daughter who followed him into politics, should serve 21 months in prison, a federal judge said Thursday.
U.S. District Judge Gregory F. Van Tatenhove also sentenced veteran political consultant Dale Emmons to three years probation, with nine months to be served at a halfway house.
The judge fined Lundergan $150,000 and Emmons $50,000.
Lundergan, 73, and Emmons were convicted last year of taking part in a scheme to secretly funnel more than $200,000 in contributions from a Lundergan company to the 2014 U.S. Senate race of his daughter, then-Secretary of State Alison Lundergan Grimes.
Grimes lost that race by 15 points to Republican Mitch McConnell, the Senate majority leader.
Four years later, a grand jury charged that Lundergan illegally paid for services for Grimes’ campaign such as political consulting and calls and mail to voters, with money from his S.R. Holding Co., Inc.
The jury convicted Lundergan on all 10 charges against him: conspiracy, making prohibited corporate contributions, causing Grimes’ campaign to file false reports, and causing false information to be included in campaign reports to cover up the spending.
Emmons was convicted of six charges, including conspiracy and making illegal contributions.
There was no evidence presented that Grimes knew about the illegal contributions.
Lundergan faced more potential time behind bars than Emmons because authorities said he was the leader in the scheme and because of the additional charges.
The sentencing range for Lundergan under advisory guidelines, which was revised after arguments in court Thursday, was 51 to 63 months in prison. It was 33 to 41 months for Emmons, who is 67.
Federal prosecutors asked Van Tatenhove during the lengthy hearing to sentence both men within those ranges, arguing the two took part in a calculated scheme to subvert campaign laws, undermining the system aimed at promoting transparency in political financing and public confidence in elections.
“In a broader sense, he harmed the public,” said Assistant U.S. Attorney Andrew T. Boone.
Boone said Lundergan’s actions furthered a sense that the wealthy and well-connected “can play in the political arena by a different set of rules.”
Defense attorneys, however, argued for probation for the two men.
Lundergan’s attorney, J. Guthrie True, said Lundergan’s acts didn’t corrupt any public officials and that he didn’t act out of greed but rather a father’s desire to help his daughter succeed.
True said Lundergan’s two main traits are loyalty and a strong desire to fix “everything for everybody,” which came into play when he stepped in to help after Grimes’ campaign got off to a shaky start.
“He tried to fix the problems in this campaign. That’s why he’s here,” True said.
True said Lundergan’s support of charities and people in need has done “immense good” in his life, and others echoed that in letters to Van Tatenhove and in court.
Ginny Ramsey, director of the Catholic Action Center in Lexington, which helps homeless people, said Lundergan has supported the center for 20 years, including by providing more than 100,000 meals.
She asked Van Tatenhove to sentence Lundegran to community service.
“Jerry Lundergan in prison is a headline. But Lundergan in service to the community is a payment to society that will make a difference,’ Ramsey said.
Emmons’ attorney, Brandon Wayne Marshall, said Emmons also has lived a life of service and helped many people in need.
“Dale is a gentle and kind man and he’s always gone out of his way looking for reasons and opportunities to help people,” Marshall said.
Van Tatenhove said he was convinced that Lundergan and Emmons had done a great deal of good in their lives.
But he said being held accountable under the jury’s verdict required a loss of liberty for both men.
However, Van Tatenhove sentenced both well below the minimum term under the advisory guidelines.
In Emmons’ case, the judge noted he faces several health problems, which Marshall said include a spinal problem and a history of heart attack, strokes and uncontrolled bleeding that would make him vulnerable to COVID-19.
Van Taenhove gave each man until Feb. 9 to begin their sentences, much longer than usual. The coronavirus pandemic — which each had cited as a reason to stay out of prison — may have eased by then, the judge said.
Defense attorneys had long argued the spending at issue in the case did not qualify as corporate contributions under federal law and that Lundergan and Emmons didn’t intend to do anything wrong.
Instead, they said that Lundergan’s failure to quickly seek reimbursement for some costs was an innocent mistake.
Lundergan did ultimately bill the campaign for some spending, but in some cases, only after it became evident the FBI was investigating.
Prosecutors, however, said Lundergan and Emmons knew what they were doing and used misleading or vague invoices in some cases to conceal the spending.
In arguing that the 2014 spending wasn’t a mistake, prosecutors presented evidence that Lundergan also took part in improper spending in Grimes’ 2011 and 2015 races for secretary of state.
That evidence included testimony from consultant Jonathan Hurst, who ran Grimes’ campaigns, that Lundergan reimbursed him more than $200,000 in the 2011 race without getting repaid by the campaign.
Hurst also testified that Lundergan left $20,000 in cash at his house in Louisville and a $25,000 check made out to “Boy Scouts” for work on Grimes’ 2015 race.
The cash and check were still at Hurst’s house in January 2016 when FBI agents showed up with a search warrant.
Hurst, who still does political consulting, received immunity to testify against Lundergan.
After a five-week trial, the jury quickly dispatched with the defense arguments, convicting Lundergan and Emmons in less than three hours.
True said Lundergan will appeal his conviction. Marshall said he would discuss a possible appeal with Emmons.
Lundergan and Emmons could seek to remain free while that appeal is pending.
Lundergan, whose businesses include a catering company and a disaster-services company, represented a Kentucky House district in Lexington for several terms and was twice head of the state Democratic Party.
He developed a close friendship with President Bill Clinton, one of the dozens of people who wrote letters to Van Tatenhove seeking leniency for the party warhorse.
Supporters have said the charges against Lundergan were politically motivated, but prosecutors scoffed at that idea.
“It is the defendants’ own unlawful conduct, not some impermissible purpose, that led to their prosecution,” they said in one document.
Grimes, a lawyer, is one of Lundergan’s five daughters and worked to extend his legacy in politics. She was once seen as having a key role in the future of the party. She won the most votes of any Democrat in a statewide race in 2011 and hung on to the office in 2015 despite Republican gains elsewhere.
The charges against her father likely helped change the course of the 2019 election for governor.
Grimes had been considered a potential candidate. But with charges pending against her father and facing controversies of her own, including a no-bid contract for a donor, she did not make the race.
Then-Attorney General Andy Beshear won the Democratic primary and went on to narrowly defeat incumbent Republican Gov. Matt Bevin a few weeks after Lundergan’s trial.
In court Thursday, Lundergan, emotional at times, acknowledged making “bad choices” and apologized to Emmons and to his friends and family, many of whom were in court.
To Grimes, he apologized for “disrupting your public service life.”
This story was originally published July 16, 2020 at 3:48 PM.
