Ex-lawmaker Jeremy Durham may face almost $7 million or more in state fines as a result of at least 690 violations of state campaign finance law, according to a USA TODAY NETWORK-Tennessee analysis of a new campaign finance and ethics report.
The information, contained in a "show cause" notice issued Feb. 28 by the Tennessee Registry of Election Finance, also provides for the first time the names of prominent campaign donors and business owners who gave Durham thousands of dollars that the former Franklin lawmaker never reported on his campaign disclosures.
Additionally, the report details nearly $76,000 in improperly disclosed campaign expenditures — on everything from Florida restaurants and airplane tickets to flowers and a Yankee Candle purchase. Among these findings are many of the more than $10,000 in illegal purchases Durham made that were included in a recently released state audit, including suits, sunglasses and spa products.
A show cause notice is the registry’s formal notification that a person is under investigation, detailing the specific allegations against that person. The 30-page Durham notice, obtained by the USA TODAY NETWORK-Tennessee, mirrors many of the accusations included in the registry’s audit that was released in February.
The donors and reportedly undisclosed contributions listed in the show cause notice include:
- Lee Beaman, a well-known Republican fundraiser and prominent Nashville car dealer, gave Durham $3,000. Durham reported receiving only $1,500;
- Cathy and John Simmonds gave Durham $6,000, but he reported receiving only $1,000. John Simmonds, the former CEO of Southeast Financial Credit Union, wrote a letter to a federal judge seeking leniency for a former youth pastor who admitted to statutory rape and child pornography charges. Durham also wrote a letter on the man’s behalf, although there is no discernible personal connection between Durham and the man;
- Tracy and Cynthia Miller, who are the brother and sister-in-law of prominent Republican donor and businessman Andy Miller, donated $6,000 to Durham. He reported only $4,500.
Durham has denied any wrongdoing and has stopped communicating with this news organization. Durham’s lawyer, Nashville criminal defense lawyer Peter Strianse, did not respond to a request for comment sent Tuesday evening.
Strianse tried to persuade the registry in February to not release the audit findings before Durham had a formal chance to respond. The registry quickly denied his argument, saying it is typical for the registry to release audits at the time they are conducted.
After the meeting, Strianse said there were many problems with the audit but declined to provide specifics.
The registry’s show cause notice shows Durham failed to report thousands of dollars in contributions, received excess donations and double-dipped by reimbursing his campaign for expenses paid by the state. It also provides a clearer picture of the state’s investigation into how Durham inappropriately used his campaign funds.
The latest document shows that between January 2013 and August 2016, Durham made at least 208 expenditures totaling nearly $76,000 that were either not reported or reported improperly. The show cause notice states he spent much of his campaign money at restaurants, including what appears to be a Japanese restaurant in South Carolina, a Creole restaurant in Florida, as well as Nashville eateries like The Standard and Kayne Prime and even a local bakery.
Beyond the various food expenses, the new report shows how Durham spent money during the two-week hiatus he took in February 2016 after the USA TODAY NETWORK-Tennessee published a story about inappropriate late-night, lewd text messages sent by Durham to several women. After the story published, Durham resigned his leadership position, removed himself from the House GOP caucus and announced he would step away from the legislature to seek help.
The $2,144 in expenses incurred during his legislative hiatus included a $550 payment to Rep. Andy Holt, R-Dresden, and $179 spent at Tom James Co., a Nashville-based company that makes suits, according to the report.
Exactly two weeks after returning from his hiatus, the report shows Durham paid $1,000 to LogicForce, a company that Durham hired to make a forensic copy of his cellphone. The payment to the computer forensic company came the same month Tennessee Attorney General Herbert Slatery began his investigation into Durham.
While the various expenses outlined in the show cause notice do not indicate Durham spent campaign money after he suspended his re-election bid in July, four days after he lost in the August primary it states he spent $104 in Chicago at Dick’s Last Resort.
Although the show cause notice is an additional step in the state campaign finance and ethics investigation, federal and state prosecutors may use it as well. The FBI is investigating Durham on allegations of wire fraud, mail fraud and bribery, according to a subpoena obtained by the USA TODAY NETWORK-Tennessee in 2016.
Stephen Crump, a district attorney in East Tennessee, also is conducting a state investigation into Durham’s actions. The Tennessee District Attorneys General Conference assigned him the case after Williamson County prosecutor Kim Helper asked for her office to not be involved due to possible conflicts of interest.
The show cause notice points to roughly 690 transactions or reporting issues that may be a violation of state campaign finance law. During the registry’s February meeting, registry member Patricia Heim guessed there could be 500 violations or more in the report.
The final number of violations probably depends on the registry’s interpretation of what constitutes a violation. In theory, every inappropriate expense or report is a violation that can be punished with a fine of up to $10,000 or even more when the transaction involves especially large amounts of money.
Many of the violations revolve around inappropriate purchases or reporting: In addition to the at least 208 expenses improperly reported, Durham also received his state per diem the same day he made campaign expenses for “food and food related items” more than 160 times and made dozens of illegal purchases, according to the show cause notice and audit. These issues were included in the USA TODAY NETWORK-Tennessee analysis that found roughly 690 violations. If Durham were fined $10,000 for each violation, the final penalty would be nearly $7 million.
Although Durham faces a fine in the millions of dollars, the final financial penalty levied probably will be much less. The registry historically issues fines in much smaller amounts, although it has been known to dole out more stringent punishments for more egregious cases.
Durham’s potential fine would be the largest penalty ever levied against a lawmaker by the registry. Former Sen. Jerry Cooper was assessed a $120,000 fine in 2007 for personal use of campaign funds, according to Drew Rawlins, executive director of the state Bureau of Ethics and Campaign Finance.
Durham has until May 1 to respond to the letter. The registry is scheduled to discuss the case during a meeting in June. In February, Strianse said Durham may attend the June meeting.
The registry began its investigation of Durham in June after the Tennessee attorney general provided information obtained through the course of its own investigation. After the USA TODAY NETWORK-Tennessee found Durham had sent lewd, late-night text messages to several women, the attorney general began examining the lawmaker's conduct.
A scathing attorney general report in July stated Durham had inappropriate sexual contact with at least 22 women, prompting Durham to suspend his re-election campaign a few days later. In September, his colleagues in the House of Representatives voted to expel Durham, making him only the second lawmaker ousted since the Civil War era.