Special Prosecutor Investigating Monarch Beverage Campaign Contributions

This is a campaign finance story that has been brewing for some time, and it appears a special prosecutor is now investigating it. Monarch Beverage, which is a corporation, a number of years ago set up a limited liability company, Vision Concepts, whose primary mission seems to be to make campaign contributions to candidate and party committees its affiliated company is barred under Indiana's campaign finance law, which places a $22,000 cap on corporate contributions.

Indiana's campaign finance law establishing limits on corporate donations was written before the law allowing the creation of limited liability companies existed. Mindful of the omission, state lawmakers knowingly chose not to amend the campaign finance law's corporate donation caps to apply to limited liability companies. This has resulted in a major loophole in the law that allows businesses to skirt the contribution cap. Monarch's Vision Concepts, LLC has made $1.5 million in campaign contributions over a period of years according to the Indianapolis Star. The Indiana Beverage Alliance filed a complaint with the Indiana Elections Board last year accusing Monarch Beverage of breaking Indiana's campaign finance law.

To nobody's surprise, the Elections Board never investigated the complaint. The Indiana Beverage Alliance then took its case to the Indiana State Police and Marion Co. Prosecutor Terry Curry. How it happened isn't clear yet, but the Indianapolis Star is now reporting that former state Inspector General David Thomas has been appointed as a special prosecutor to investigate Monarch's campaign contributions. Monarch's CEO, Phil Terry, insists Vision Concepts is a legitimate business entity and not a sham company created just for making campaign contributions. Presumably, Curry requested a special prosecutor because he's been a past recipient of campaign contributions from Vision Fleet.

This is not an isolated issue. In last year's mayoral campaign, what appeared to be a phantom business, Indy Project Venture, LLC, sprung into existence and one week later made a $50,000 campaign donation to Mayor Joe Hogsett's campaign. After media inquiries seeking to learn the identity of the campaign donor were initially turned aside by a representative of the company, Scannell Properties eventually fessed up to creating the new business to support its interest in public safety and education. The firm denied it was interested in developing a new criminal justice center after the Democratic-controlled City-County Council followed Hogsett's lead in coming out against the private consortium chosen by the Ballard administration to develop a privately-operated criminal justice center. It was a peculiar move by Hogsett because his law firm's lobbying arm was being paid by the Ballard administration to lobby the council for passage of the deal.

Nationally, public interest groups have complained for a number of years that phantom businesses are being set up to make large campaign contributions to SuperPACs, PACs and other campaign committees. This has raised questions about whether campaign finance laws prohibited foreign contributions in federal elections is being circumvented by the use of phantom firms. Congress has shown no interest in reforming campaign finance laws to address these concerns just like the Indiana General Assembly has shown no interest in amending Indiana's campaign finance law to close this big loophole. Against that backdrop, I would be very surprised if Thomas chose to seek charges in this case.