Sen. Braun's campaign accused by FEC of breaking campaign finance laws

Republican Sen. Mike Braun's 2018 campaign has been accused of accepting millions of dollars of potentially improper loans in a Federal Election Commission memorandum and draft audit released this week.

Braun's campaign, however, argues in a response to the FEC that all the loans and contributions were legal.

State Democrats are now accusing the Hoosier of stealing a U.S. Senate seat and said Braun "cheated his way to his so-called victory."

Braun took out Democratic incumbent Sen. Joe Donnelly during the 2018 campaign after a tight, nationally-watched race, a victory due in part to Braun's ability to self-finance his campaign.

The race was a crucial one: since Donnelly's ouster, no Democrat has held statewide office in Indiana.

The FEC auditors were concerned because it appeared Braun accepted bank loans that did not require collateral.

Joshua Kelley, Braun's chief of staff and senior political advisor, said the report that was sent to the FEC Commissioners for review is only a draft and does not include information from documents submitted by the campaign late last week.

"If you have read the documents that the campaign committee has since provided to the FEC or listened to the recent hearing with the FEC commissioners, it is clear that the final version of the FEC’s audit report will conclude that all the loans fully complied with the law," Kelley said in a statement. "Sometimes these FEC audits require time to work themselves out; that has been the case here, and we’re not the least bit concerned about how the process will end."

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The report, which did not spell out any potential consequences, says that Braun received "apparent prohibited loans" and lines of credit totaling $8.5 million.

Most of that money came from financial institutions "that did not appear to be made in the ordinary course of business" because the banks were not assured repayment. FEC auditors said that means they appeared to be prohibited contributions from financial institutions.

Braun's campaign argues in a written response to the draft audit posted on the FEC website that it's not abnormal for "creditworthy" individuals such as Braun to get unsecured lines of credit.

"It is the undersigned counsel’s understanding and belief that the commercial lending institutions that made the Loans did so in their ordinary course of business (i.e., in their own commercial interests), and not for the purpose of influencing the outcome of the Candidate’s candidacy," Chris Gober, an attorney for the campaign, wrote.

During a Nov. 10 FEC hearing, Gober said the campaign submitted more loan-related documents to the FEC on Nov. 4 after both the draft report and Nov. 3 memorandum accusing the campaign of breaking campaign finance laws had already been drafted. Thus, the FEC auditors' findings did not reference either.

The FEC did not immediately respond to questions from IndyStar about whether these documents would clear Braun of any wrongdoing.

FEC auditors also found two checks worth $1.5 million from Meyer Distributing, a corporation Braun founded, that they say were incorrectly reported as a loan, according to the report.

Gober says that money came from Braun's "personal funds owned by the company to the candidate," and thus was reported correctly.

During the hearing, Gober said the campaign provided the stock redemption agreement as requested on Nov. 4.

According to the draft report, the FEC found seven mistakes or potential campaign finance violations:

  • Misstatement of financial activity

  • Failure to file 48-hour notices of contributions

  • Failure to disclose contributors' occupations and/or name of employer

  • Receipt of apparent prohibited contributions-loans

  • Receipt of contributions in excess of the limit

  • Failure to disclose memo entries and candidate loans

  • Prohibited candidate personal loan repayments.

Braun's campaign blamed many of the clerical issues on a former treasurer, Travis Kabrick, who quit and who Gober said is no longer communicating with the campaign.

IndyStar's efforts to reach Kabrick were unsuccessful.

Mike Schmuhl, chairman of the Indiana Democratic Party, questioned whether Braun rightfully won the 2018 election and called on the Department of Justice, the United States Attorney for the Southern District of Indiana and the Indiana attorney general to investigate.

“It’s clear from the reporting that came out this morning that Mike Braun broke the law and stole a United States Senate seat in 2018," Schmuhl said in a statement. "Today, Hoosiers need to ask themselves a sobering question: Do we have an illegitimately elected U.S. senator? Braun used $8.5 million of ‘apparent prohibited loans’ to fuel his campaign — an amount of money that made his campaign much more competitive."

Republican Mike Braun reacts aduring an election night party, Tuesday, Nov. 6, 2018, in Indianapolis, after defeating Sen. Joe Donnelly, D-Ind.
Republican Mike Braun reacts aduring an election night party, Tuesday, Nov. 6, 2018, in Indianapolis, after defeating Sen. Joe Donnelly, D-Ind.

Schmuhl also referenced Braun's pledge to push to overturn the 2020 presidential election results in January. Braun later changed his mind and voted to certify the election results after the Jan. 6 insurrection.

The FEC commission is now tasked with deciding whether Braun's campaign should face any consequences.

Call IndyStar reporter Kaitlin Lange at 317-432-9270. Follow her on Twitter: @kaitlin_lange.

This article originally appeared on Indianapolis Star: FEC: Indiana US senator's campaign broke campaign finance laws