Federal prosecutors want to present evidence that Kentucky Democratic Party stalwart Jerry Lundergan funneled corporate contributions to his daughter, Alison Lundergan Grimes, in her 2011 and 2015 races for Kentucky secretary of state as they try to prove he illegally did the same thing in her 2014 U.S. Senate bid.
However, Lundergan has not been charged in connection with alleged illegal contributions in the state races, and his attorneys have asked a judge to bar prosecutors from giving jurors evidence about them.
The new information about Lundergan allegedly making improper corporate contributions to Grimes’ two state campaigns was included in a document filed Tuesday by federal prosecutors.
The document was to provide notice that prosecutors intend to use the information against Lundergan and Dale C. Emmons, a Democratic political consultant, if a judge lets them.
The notice alleged that Lundergan, through companies he owns, spent a total of $325,602 for work on such things as campaign mailers to benefit Grimes’ 2011 and 2015 races. More than $260,000 of that total went to a person identified in the notice only as Person C.
Information in a separate defense motion indicates Person C is Jonathan Hurst, a Democratic political consultant who helped Grimes in her state races and managed her unsuccessful 2014 bid to unseat Republican Senate Majority Leader Mitch McConnell.
Lundergan’s payments to Hurst included $170,849 in October 2011 for a campaign mailing he ordered and paid for to help Grimes, according to the notice from prosecutors Andrew T. Boone and Robert J. Heberle.
Lundergan paid Hurst and Emmons through companies he owned such as S.R. Holdings Co., the notice said. That is the same company Lundergan allegedly used to make contributions to Grimes’ 2014 race.
Hurst will testify that he asked Lundergan to get reimbursement from Grimes’ campaign for more than $200,000 Lundergan paid Hurst through a company in 2011 so the spending would be legal, but learned later that Lundergan didn’t do so, prosecutors said.
The notice prosecutors filed Tuesday also did not identify Grimes as the candidate Lundergan was helping, but other court filings make clear she is the Candidate A referred to in the case.
The motion said Lundergan made the payments during times when Emmons was helping Grimes’ campaign.
Prosecutors said they need to tell jurors about the 2011 and 2015 payments to show Lundergan’s intent to break the law by making corporate contributions to Grimes’ campaign in 2014 without reimbursement from the campaign.
“This evidence is relevant to prove the defendants’ intent, plan, preparation, knowledge, and absence of mistake concerning the crimes charged in the indictment,” the motion said. “Evidence of Lundergan’s prior conduct will establish that he knew and intended to use these same methods to contribute corporate money to Candidate A’s 2013-2014 federal campaign, and that Emmons knew and intended to facilitate these contributions by receiving the corporate payments.”
Lundergan strongly denies he did anything wrong in connection with Grimes’ 2011 and 2015 secretary of state races, according to a motion field earlier by his attorneys, J. Guthrie True and Whitney True Lawson.
Lundergan’s lawyers argue it would be improper to let prosecutors use evidence about alleged wrongdoing in other races to try to prove Lundergan intended to break federal law in Grimes’ Senate race.
Prosecutors can’t prove that what Lundergan did in those races broke state law, and such allegations have no bearing on the federal charge against Lundergan, the defense motion said.
“The Court should stop this frolic before it starts, . . .” Lundergan’s attorneys said.
Crystal Staley, the spokeswoman for Attorney General Andy Beshear, said the Attorney General has not been a part of the investigation and has not been presented with any evidence.
“The office will review the information that has been reported and take appropriate steps,” Staley said. “It is not unusual in a federal investigation for the prosecutors to wait until the federal action is completed before sharing evidence with local and state agencies.”
Lundergan, a Lexington businessman, is a former state representative and two-time chairman of the state Democratic Party.
Many saw his daughter as a star in the next generation of Democrat politicians in Kentucky when she won the race for secretary of state in 2011.
Grimes lost a bid to unseat Republican Senate Majority Leader Mitch McConnell in 2014 by a wide margin, but won re-election as secretary of state in 2015.
Grimes was considered a potentially strong contender in the 2019 governor’s race, but with her father under indictment and facing complaints that she had misused her office, Grimes took a pass on seeking another state office this year.
Grimes is under investigation by three state agencies: a special counsel appointed by the attorney general; the Personnel Board; and the Executive Branch Ethics Commission. Investigators are looking into whether her staffers improperly searched the party affiliation of non-partisan employees at the State Board of Elections and whether she had staff improperly gather voter data without paying for the information.
The result of her father’s case could have an impact on her political future. Despite the scandals around her, Democrats have considered her a potential candidate to challenge U.S. Rep. Andy Barr in his 2020 reelection bid in the Sixth Congressional District.
A federal grand jury indicted Lundergan and Emmons last August for allegedly taking part in a conspiracy to make illegal contributions to Grimes in her race against McConnell.
Lundergan faces charges of having campaign consultants and vendors bill one of his companies for their work for Grimes, which is an illegal contribution.
Hurst will testify that he and other campaign employees discussed concerns with Lundergan in 2013 and 2014 about campaign spending by his companies in the Senate race, according to prosecutors.
Emmons, who has worked on hundreds of political campaigns, is charged with doing consulting work for Grimes’ campaign but billing Lundergan’s company for the work.
The two also are charged with causing Grimes’ campaign to file false reports that hid the illegal spending. The campaign did not know about the alleged illegal contributions by her father, the indictment said.
The top penalty on some charges in the indictment would be 20 years in prison.
Lundergan and Emmons have denied any wrongdoing and are fighting the charges.
The defense motions said it appears prosecutors intend to introduce evidence that Lundergan paid for unreimbursed campaign mailings for Grimes in her first race, and for mailings and telephone “robocalls” in her 2015 campaign for re-election.
One of the defense motions confirms that Hurst assisted federal authorities investigating Lundergan and Emmons.
One defense motion referred to Hurst as “the government’s immunized witness,” meaning he received immunity for any potential wrongdoing in return for helping the FBI and prosecutors.
One motion included an excerpt from testimony Hurst provided to the grand jury that indicted Lundergan and Emmons.
In that excerpt, Hurst described developing mail pieces for Grimes, sending an invoice to Lundergan and getting a $170,849 check from one of Lundergan’s companies.
Attorneys for Lundergan said allowing jurors to hear such evidence would create a risk that they would convict him “on the unsupported and impermissible theory that if Lundergan violated campaign finance laws in the past, he probably did so here too,” defense attorneys argued in a motion.
Defense attorneys also alleged that prosecutors improperly used the grand jury to gather evidence about Lundergan’s involvement in Grimes’ 2011 and 2015 state races, even though they weren’t connected to the federal investigation of her 2014 campaign.
Prosecutors responded that they obtained evidence legally through the grand jury and should be allowed to use it at the trial.
Prosecutors said they need to be able to counter an anticipated argument from Lundergan and Emmons the alleged illegal disbursements were “simple mistakes.”
The defense is seeking to suppress any evidence related to the 2011 and 2015 races. U.S. Magistrate Judge Matthew A. Stinnett scheduled a hearing on the defense motions on June 25.