Former Republican mayoral nominee and convicted felon Matt Kelty now faces a lawsuit from his ex-campaign chairman in connection with money lent to him during the campaign.
Filed Monday by Fred Rost, who helped with Kelty’s 2007 run for Fort Wayne mayor, the lawsuit seeks a judgment against Kelty of $125,000, according to court documents.
Campaign finance reports filed this year indicated Kelty’s campaign committee had not repaid the debt that he described in a written explanation with the report as “personal in nature” and consisted of the money lent by Rost and campaign manager Glenna Jehl.
According to the lawsuit, Rost demanded Kelty repay the promissory note, but Kelty has “refused and continues to refuse” to pay. Rost is seeking not only the remaining $125,000 but also interest, late charges and attorney fees.
Messages left for Kelty and Rost were not returned Tuesday.
An upstart Republican candidate, Kelty defeated Allen County Commissioner Nelson Peters in the May 2007 GOP primary, building a spirited, grass-roots campaign popular among social conservatives.
But there were questions early on about where Kelty was getting his campaign money, with the Allen County Election Board investigating how Kelty reported $158,000. Kelty said he lent the money to the campaign himself, but it was later revealed that the money came to him from people close to the campaign, specifically Rost and Jehl.
Kelty contended the money was a personal loan, which he then in turn gave to the campaign.
While the election board agreed, voting 2-1 along party lines that Kelty did not violate campaign finance laws in how he reported the money, an Allen Superior grand jury disagreed.
Called at the request of Special Prosecutor Dan Sigler, in August 2007 the grand jury issued a nine-count criminal indictment against Kelty, including seven felony charges and two misdemeanors.
The indictment came just over two months before the general election, in which Kelty, a local architect, faced off against the eventual winner, Democrat Tom Henry.
In October 2008, on the day his trial was to begin, Kelty pleaded guilty to two felony charges of filing fraudulent campaign reports and one misdemeanor charge of false informing, admitting he had lied to the grand jury.
Allen Superior Court Judge Ken Scheibenberger sentenced Kelty to a year of informal probation, community service and ordered him to pay a small fine.
Since the case ended, Kelty has had public financial struggles – trying unsuccessfully in 2008 to auction his Florida Drive home to pay mounting legal costs.
