July 23, 2014 at 2:10 p.m.
Loophole should be closed (06/25/07)
Editorial
Don't look now, but some folks in Fort Wayne have just driven a truck through a loophole in Indiana's campaign finance laws.
Actually, it's arguable whether the loophole exists and the matter has been forwarded to a special prosecutor.
But an Allen County Election Board interpretation of the law sets a precedent that - if it stands - the Indiana General Assembly needs to reverse as soon as possible.
Here, in a nutshell, is what happened. Matt Kelty, who was seeking the Republican nomination for mayor of Fort Wayne, accepted a couple of loans, one of which was nearly $150,000.
He then loaned that money from his own pocket to his campaign.
Originally, he reported that the loan was a personal one from him.
But, after he successfully won the nomination, he revised that to disclose that the money had initially come from a supporter and some campaign workers.
That disclosure prompted election officials to look at the key question: Is a loan to a political candidate - one which the candidate in turn loans to his campaign and which can be paid off with other future campaign donations - really a loan to the campaign itself?
Is this merely a technicality?
Or is it the equivalent of money laundering?
The loan in this case was particularly glaring since it provided about $6 of every $10 the campaign spent.
The partisan politics of the affair don't really matter beyond the limits of Fort Wayne.
But the broader implications for state campaign finance law are huge.
If the precedent set in Allen County stands, then the state's current campaign finance laws are essentially meaningless.
As long as the money is called a loan to the individual rather than to the campaign, nothing would be disclosed.
Candidates have complained, with real justification, that current laws on the books are vague and confusing. And the last thing anyone wants to do is create a new set of bureaucratic hurdles for office-seekers. Nothing should be done to discourage people for running for office.
But at the same time, it's imperative that the system be transparent, that voters know where the money is coming from.
Closing the "personal loan" loophole is a good first step, but our guess is the entire system needs an overhaul. - J.R.[[In-content Ad]]
Actually, it's arguable whether the loophole exists and the matter has been forwarded to a special prosecutor.
But an Allen County Election Board interpretation of the law sets a precedent that - if it stands - the Indiana General Assembly needs to reverse as soon as possible.
Here, in a nutshell, is what happened. Matt Kelty, who was seeking the Republican nomination for mayor of Fort Wayne, accepted a couple of loans, one of which was nearly $150,000.
He then loaned that money from his own pocket to his campaign.
Originally, he reported that the loan was a personal one from him.
But, after he successfully won the nomination, he revised that to disclose that the money had initially come from a supporter and some campaign workers.
That disclosure prompted election officials to look at the key question: Is a loan to a political candidate - one which the candidate in turn loans to his campaign and which can be paid off with other future campaign donations - really a loan to the campaign itself?
Is this merely a technicality?
Or is it the equivalent of money laundering?
The loan in this case was particularly glaring since it provided about $6 of every $10 the campaign spent.
The partisan politics of the affair don't really matter beyond the limits of Fort Wayne.
But the broader implications for state campaign finance law are huge.
If the precedent set in Allen County stands, then the state's current campaign finance laws are essentially meaningless.
As long as the money is called a loan to the individual rather than to the campaign, nothing would be disclosed.
Candidates have complained, with real justification, that current laws on the books are vague and confusing. And the last thing anyone wants to do is create a new set of bureaucratic hurdles for office-seekers. Nothing should be done to discourage people for running for office.
But at the same time, it's imperative that the system be transparent, that voters know where the money is coming from.
Closing the "personal loan" loophole is a good first step, but our guess is the entire system needs an overhaul. - J.R.[[In-content Ad]]
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