NASHVILLE, Tenn. — A Nashville social club's owner has reached a deal to plead guilty to a campaign finance scheme alleged against him and a Tennessee state senator who has criticized the charges as a “political witch hunt."
Attorneys for Joshua Smith last week notified the federal judge in Nashville of the plea deal reached with prosecutors. One of the lawyers signaled Wednesday that Smith is willing to testify, a key development as state Sen. Brian Kelsey, a Republican, is scheduled to head to trial in January 2023 after pleading not guilty.
“Mr. Smith accepts responsibility for his involvement and if he is called to testify he will be truthful regarding the activities that took place,” an attorney representing Smith, Phillip S. Georges, said in a statement Wednesday.
The five-count indictment filed in October 2021 alleges that Smith, owner of The Standard club, and Kelsey violated campaign finance laws by illegally concealing the transfer of $91,000 during the lawmaker’s 2016 failed congressional campaign. Smith's attorneys indicated he plans to plead guilty to one of the counts.
The Standard is a restaurant and private club near the state Capitol that is often frequented by lawmakers and has featured its own political action committee.
Kelsey and Smith “unlawfully and secretly” funneled funds from Kelsey’s state Senate campaign committee to his federal congressional campaign committee, according to the indictment.
Prosecutors also allege that Kelsey and others caused a national nonprofit political organization to make illegal and excessive campaign contributions to Kelsey by coordinating with the organization on advertisements, and they caused the organization to file false reports to the Federal Election Commission.
Authorities did not name the national organization. But the indictment contains claims similar to a complaint filed against Kelsey’s campaign with the Federal Election Commission and the Department of Justice in 2017 by the nonprofit Campaign Legal Center.
That complaint claimed that independent expenditures made by the American Conservative Union in the 2016 race were coordinated with Kelsey’s congressional campaign. A spokesperson for the American Conservative Union has said that it has been “fully cooperating with this investigation since 2018.”
The indictment mentions, but does not charge, two alleged co-conspirators, one of whom is described as an attorney and former Tennessee House member expelled in 2016. Former Rep. Jeremy Durham, a Republican from Franklin, was the only lawmaker expelled that year.
An attorney for Kelsey did not immediately respond to requests for additional comment Wednesday.
After he was charged, Kelsey held an online news conference in which he said he was “totally innocent." In his statement, Kelsey accused President Joe Biden’s administration of “trying to take me out because I’m conservative.”
Days later, he told his fellow senators inside the Tennessee Senate chamber that he hoped that they would “not use political attacks on one another.”
Kelsey — a Republican from Germantown, a suburb of Memphis — was elected to the Senate in 2009 and served as chairman of the Senate Education Committee, a position he left after the federal charges. He previously served in the state House. Kelsey is not seeking reelection this year.