INDIANAPOLIS (WISH) — Federal charges have been filed against a former Indiana state senator and a gaming executive accused of funneling campaign cash through straw donors leading up to the 2016 primary election.
Brent Waltz, a Republican who served in the state Senate from 2005-17, was arrested by the FBI on Monday. In the 2016 GOP primary, he unsuccessfully ran for a seat in Indiana’s 9th congressional district, losing a five-way race to Trey Hollingsworth.
Waltz, 47, faces one count of conspiracy to make conduit contributions, false statements and to obstruct justice, one count of making and receiving conduit contributions, one count of obstruction of justice, and two counts of making false statements.
Also charged is 71-year-old John Keeler, vice president and general counsel for Spectacle Entertainment. The Indianapolis-based company confirmed Keeler remained employed but had taken administrative leave as a result of the indictment.
At the time of the alleged campaign finance violations, Keeler was vice president and general counsel for New Centaur, LLC., which operated Indiana Grand Racing & Casino and Hoosier Park Racing & Casino. Keeler, an Indianapolis lawyer, served in the Indiana House of Representatives from 1982 to 1998.
According to court documents, the pair used more than a dozen straw donors to move cash between New Centaur and Waltz’s campaign, using Kelley Rogers, a political consultant for the Waltz campaign, to help arrange the transfers. Keeler orchestrated payments to Waltz’s campaign through fake invoices from an East Coast political consulting company. Federal election laws at the time capped individual donations to candidates at $2,700 per election.
A total of 13 unnamed straw donors are mentioned in court documents. They include friends, relatives and business associates of Waltz.
Documents state each straw donor contributed the maximum donation of $2,700, then was reimbursed, a violation of campaign finance law.
Paul Helmke, a former three-term mayor of Fort Wayne and a current professor at Indiana University School of Law explains how straw donations work: “One of the reasons that they do this is, No. 1, they don’t want corporate money coming into campaigns illegally and oftentimes straw donors are used as a way to illegally funnel corporate money into campaigns.”
Helmke added, “Every cycle you still see campaigns that violate the law where they will basically try to get more individuals. They want it to look like there are more individuals supporting the candidates campaign so oftentimes companies will say why don’t you all donate and then there will be a healthy bonus for you.”
Investigators also say Rogers used New Centaur money to pay for his consulting fees, which is a violation of the Election Act, according to court documents.
The Indiana Gaming Commission issued an emergency order suspending Keeler’s casino license immediately after the federal charges were made public. The order, which is effective for 90 days unless renewed, bars Keeler from holding a licensed position at any Indiana casino for 90 days.
State gaming officials also moved to open a suitability investigation into Spectacle Entertainment and former Centaur associates, separate from the criminal matter. Findings are anticipated to be presented at a public meeting.
“This matter is extremely serious,” Sara Tait, the commission’s executive director, said in an emailed statement to News 8. “The ability [of Spectacle] to continue to hold an Indiana gaming license is in question. The remaining oard of managers have urgent questions to answer. Keeler’s indictment and the separate suitability matters under investigation by our agency create an unprecedented set of negative circumstances.”
Federal investigators also say Waltz and Keeler lied to them, which, according to Indianapolis attorney and political columnist Abdul-Hakim Shabazz, could be more trouble than the campaign violations. “I would say that funneling the campaign money is one thing, but, at the end of the day, it is a Federal Election Commission violation so you can probably pay a fine and move on. when you lie to the FBI and the federal government during a criminal investigation that is were people really get into trouble, the old phrase it is not the crime that gets you into trouble its the cover-up.”
Both men are currently free and awaiting to appear in federal court. Keeler has agreed to surrender his passport and firearms, he is expected in federal court within the next two weeks..