Politics & Government

A ‘concerted scheme’ or ‘mistakes?’ Closing arguments made in Jerry Lundergan case.

‘That’s just wrong.’ Attorney for Jerry Lundergan says charges are politically motivated.

Jerry Lundergan's attorney, J Guthrie True, speaks to press outside of federal courthouse downtown after both Lundergan and Dale Emmons made their first court appearance.
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Jerry Lundergan's attorney, J Guthrie True, speaks to press outside of federal courthouse downtown after both Lundergan and Dale Emmons made their first court appearance.

Prosecutors and defense attorneys presented starkly different views Wednesday of evidence that will decide the fate of former Kentucky Democratic Party Chairman Jerry Lundergan and veteran consultant Dale Emmons, who are accused of scheming to funnel illegal contributions Secretary of State Alison Lundergan Grimes’ 2014 U.S. Senate campaign.

The two sides presented closing arguments in the case in federal court in Frankfort.

Prosecutor Robert J. Heberle told jurors that Lundegran and Emmons took part in a “concerted scheme” to make illegal corporate contributions to Grimes in three ways: with payments from SR Holding, one of Lundergan’s companies, to Emmons for his work on Grimes’ campaign; through payments Emmons made directly to vendors that were then repaid by Lundergan, not the campaign; and with payments from Lundergan’s company to vendors for which he didn’t seek reimbursement from the campaign.

The alleged illegal spending totaled more than $200,000.

“These were secret payments because the defendants knew what they were doing was wrong,” Heberle said.

In his closing argument, however, Lundergan’s attorney, J. Guthrie True, said prosecutors failed to prove Lundergan intended to break the law in order to boost his daughter’s campaign.

True said the government has treated Lundergan like a heel for making honest mistakes as he tried to help his daughter.

“You don’t convict people for mistakes,” True told jurors.

Emmons’ attorney, Brandon Wayne Marshall, said Emmons was not well-versed in the complex rules of campaign finance. Emmons did not knowingly break the law, and in campaign-finance matters, ignorance of the law is a defense, Marshall said.

“He believed that what he was doing was perfectly legal,” Marshall said of Emmons.

Grimes was in the courtroom Wednesday to listen to the arguments. She had not been at the trial earlier because she was a potential witness, but did not get called to testify.

Jurors will begin deliberating on Thursday. The outcome of the case could have a significant impact on Grimes’ political future and diminish her father’s hand, which has long helped shape Kentucky politics from behind the scenes.

Attorneys have spent a significant amount of time during the five-week trial talking about Grimes’ campaign kickoff event in July 2013, where she spoke from a platform at the Carrick House in Lexington and a big screen projected a video with an endorsement from former U.S. President Bill Clinton.

Lundergan’s company, which owns the Carrick House, only billed the campaign $3,700 for the event, which attracted reporters from Washington D.C. and was intended to signify that Grimes’ campaign was a serious challenge to U.S. Senator Mitch McConnell.

Heberle said the company paid another $25,000 to vendors who helped with the event, and did not immediately seek repayment.

Heberle told jurors that Lundergan’s company only billed the campaign after a federal investigation started and that checks to Emmons for consulting were never billed to the campaign.

Lundergan was “secretly funneling money into this campaign,” Heberle said.

True, however, said Grimes’ campaign was raising $52,000 a day at one point in 2013 and received a total of nearly $19 million for her Senate bid. There was no need for Lundergan to supplement Grimes’ then-record fundraising with money from his companies, True said.

The defense has acknowledged Lundergan did not immediately bill Grimes’ campaign to get reimbursed for some goods and services paid for through his companies. Those were innocent oversights, however, True said.

Prosecutors argued Lundergan was paying Emmons to work for the Grimes’ Senate campaign in the last half of 2013, and not for the Kentucky Democratic Party’s effort to help Grimes and other candidates — called a coordinated campaign — as defense attorneys have argued.

But defense attorneys argued that Emmons was in fact doing work to boost the coordinated campaign in 2013 while volunteering for Grimes’ campaign, meaning it was not improper for Lundergan to pay him.

Heberle displayed a chart with Emmon’s financial information that he said indicated he couldn’t afford to volunteer at the time.

However, Marshall said Emmons was not broke in 2013.

Whether Emmons was working for the coordinated campaign or Grimes’ campaign is one key issue jurors will have to decide. The evidence was that Lundergan was paying Emmons $20,000 a month at the time — money Grimes’ campaign did not reimburse.

Lundergan and Grimes wanted Emmons to get the job managing the coordinated campaign, though Grimes’ campaign manager, Jonathan Hurst, worked against giving Emmons the job.

Hurst, a political consultant like Emmons, was jealous and resentful of Emmons, Marshall said.

One noteworthy piece of evidence in the trial was that Lundergan gave Hurst $20,000 in cash and a $25,000 check with the subject line “Boy Scouts” in 2015, leaving the cash and check stuck in a couch at Hurst’s house.

Hurst said he understood Lundergan was paying him to do campaign mailings for Grimes’ 2015 reelection bid for state office. The implication was that the money was an illegal contribution.

Hurst said Lundergan also paid him for work on Grimes’ initial 2011 run for office without getting reimbursed by her campaign.

Heberle said those payments in the state races showed that Lundergan’s alleged illegal payments in the 2014 Senate campaign weren’t a mistake.

There have been no criminal charges in state court based on the allegations about 2011 and 2015.

Hurst received immunity from possible prosecution in return for assisting the government. He said the deal required him to testify truthfully.

But defense attorneys attacked his credibility. True called him a “master deceiver and manipulator” who played on Lundergan’s friendship and emotions to build his career and gouge the Lexington businessman financially before turning on him to save his own skin.

He suggested a phrase to describe Hurst: “Expect the worst from Jonathan Hurst.”

Daniel Desrochers has been the political reporter for the Lexington Herald-Leader since 2016. He previously worked for the Charleston Gazette-Mail in Charleston, West Virginia.