Tennessee GOP defends donations over $200,000 from former candidate accused of fraud

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Tennessee GOP defends donations from former candidate accused of fraud
http://www.tennessean.com/article/20100929/NEWS02/9290361/-1/NLETTER01?source=nletter-news
BY CHAS SISK • THE TENNESSEAN • SEPTEMBER 29, 2010

The http://www.tngop.org/">Tennessee Republican Party says it has no plans to relinquish donations from a fundraiser and former candidate for state treasurer after allegations that he orchestrated a fraudulent insurance scheme.

A spokeswoman said the state GOP has not decided what to do with donations from Ira Brody, a Murfreesboro investment banker who has been accused in a civil suit of looting an insurance fund. Brody ran unsuccessfully for state treasurer after the GOP's takeover of the state legislature in 2008 and has given more than $200,000 to the Republican Party and candidates.

"We have no plans to do anything about contributions that were received and spent during a previous election cycle," said Kim Ketchel, the spokeswoman.

"Right now we're talking in terms of an allegation in a lawsuit. Everyone is innocent until proven guilty."

In a lawsuit filed two weeks ago in New York City, Brody's former employer, Concord Capital Management, says the executive and other company insiders stole millions through a plan to lend money to wealthy individuals for the purchase of life insurance policies.

The scheme, which ran from 2007 until Brody resigned to run for state treasurer in January 2009, undermined Concord's legitimate business, resulting in damages of more than $70 million, according to the suit.

The suit was first reported Monday by Nashville TV station WTVF.

"This action arises from a shocking scheme, involving fraud, forgery, and bribery, in which a renegade group of executives … looted the assets of Concord," the lawsuit states.

"As a result of the looting and the bogus loans generated by the Concord executives, Concord lost hundreds of millions of dollars, and its business was destroyed."

The suit also names Fifth Third Bank and Bank of America as defendants. Brody declined Tuesday to comment on the lawsuit.

The fraud allegedly occurred at the same time Brody was working as a Republican fundraiser. Democrats were quick to pounce on the connection, calling on Republicans to return donations from Brody.

"I don't see how any lawmaker could keep that cash knowing it may have been stolen," http://www.tndp.org/">Democratic Party Chairman Chip Forrester said in a statement.

"Mr. Brody evidently tried to buy the state treasurer's job with ill-gotten gains. We are fortunate he is not in charge of Tennessee's revenues now."

Ketchel said Forrester's statement was "political gamesmanship."

$80,000 in 2008 cycle

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