Date: 08-31-2018

Alison Lundergan Grimes’ dad indicted in campaign finance conspiracy

Longtime Kentucky Democratic operatives Jerry Lundergan and Dale Emmons were indicted by a federal grand jury in Lexington Friday for allegedly making illegal contributions to the 2014 U.S. Senate campaign of Secretary of State Alison Lundergan Grimes and then conspiring to cover them up.

Emmons was indicted on six counts and Lundergan was indicted on 10 counts after investigators found they “willingly and knowingly” made corporate contributions of more than $25,000 to Grimes’ campaign and then worked to make false entries in the campaign’s financial records to cover up the contributions.

The indictment alleges that Lundergan and an employee of his company approached campaign consultants and vendors and told them to bill S.R. Holding Co. for work they did for his daughter’s campaign. He then did not seek reimbursement from Grimes’ campaign and only sought partial reimbursement after a grand jury subpoenaed records from Lundergan.

It also alleges that Emmons provided political consulting to the campaign, but billed Lundergan and S.R. Holding instead of the campaign, and was paid with corporate funds. When vendors billed Emmons’ business for campaign services, he was allegedly reimbursed by Lundergan and not the campaign.

The indictment says Lundergan and Emmons concealed the scheme from the campaign, causing them to file false reports with the Federal Elections Commission.

The indictments strike at the heart of the Democratic establishment in Kentucky and raise serious questions about the political future of Lundergan’s daughter, Secretary of State Alison Lundergan Grimes. Grimes is considering a run for either attorney general or governor in 2019.

Lundergan, 71, has for years led a faction of the Kentucky Democratic Party, taking control of the entire party as its chairman twice: once between June and August of 1988 and again from 2005 to 2007. He later would serve as the architect behind his daughter’s campaigns for secretary of state and U.S. Senate.

Emmons, 66, is a close friend of the Lundergan family and has worked on numerous statewide and legislative campaigns as a political consultant, including Grimes’ 2014 Senate campaign.

On his website, Emmons claims he has been part of more than 700 winning campaigns. Most recently, he helped with Lexington Mayor Jim Gray’s failed 2016 bid for U.S. Senate and 2018 bid for the U.S. House. Emmons’ son, Jamie, ran those campaigns.

On his website, he quotes Gray as saying “…Dale Emmons is the political Obi-Wan Kenobi of my generation.”

The rumors of a looming Lundergan indictment have circulated around the state ever since a grand jury sought records related to Grimes’ 2014 Senate campaign and Lundergan’s businesses.

While Lundergan wasn’t the official campaign manager for his daughter as she challenged Mitch McConnell, he was heavily involved in the campaign. Several profiles of the campaign written by national news outlets that flooded into the state to cover the race mentioned Lundergan’s outsized influence on the race.

Over the course of the campaign, Grimes reported paying $111,831 to Lexington companies owned by Lundergan and $41,745 directly to him and other family members.

The Republican Party of Kentucky filed a complaint with the Federal Elections Commission in 2014 alleging that Lundergan made “prohibited corporate contributions” to Grimes, saying he charged her campaign below market value for his services. The complaint was dismissed in 2016.

It isn’t Lundergan’s first time running into trouble with the law. The Maysville-raised entrepreneur who made his money in restaurants, catering and disaster relief was forced to give up his seat in the Kentucky House of Representatives in 1989 after he was convicted of violating an ethics law barring legislators from doing work for the state under no-bid contracts. His conviction, however, was overturned on grounds it should have been prosecuted as a misdemeanor, not a felony. The statute of limitations then expired and he was never retried.

Later the FBI seized all records of a deal between Emergency Disaster Services, a Lundergan company, and Morgan County. The two struck a deal after a tornado hit the county in 2012 and the records were seized when the FBI investigated former Morgan County Judge-Executive Tim Conley. Conley was sentenced to a seven year prison sentence in 2014 for a bribery scheme unrelated to EDS.

Emmons has also faced legal claims related to previous campaigns. In 2016, he settled a defamation lawsuit brought by State Sen. Ralph Alvarado, R-Lexington, over an ad his company produced in the 2016 state Senate election between R.J. Palmer and Alavarado. Emmons signed a public apology and paid an undisclosed amount.

By Daniel Desrochers and Bill Estep
Lexington Herald-Leader