Rutherford County Mayor Bill Ketron’s daughter, Kelsey Ketron Randolph, used her father’s state senate campaign funds to pay off his and his wife’s personal credit card after she had used the card for her personal purchases, a state audit says.
The credit card reimbursement placed the senate account into a negative balance, the audit said. Ketron Randolph and her husband later reimbursed the senate account by $16,595.60, the audit said.
Ketron has at least $127,535 in allegedly missing funds from his old state senate campaign finance account, the audit by the state Bureau of Ethics and Campaign Finance said. Ketron must attend a show cause hearing in April.
Also, Ketron’s leadership PAC, Quest, allegedly has at least $113,930.22 missing, a second state audit by the Bureau of Ethics and Campaign Finance says.
Trey Harwell, Ketron’s attorney, on Dec. 7 provided this statement for his client: “I take these audits seriously and am fully cooperating with the Registry. We are evaluating these audits to correct any errors and explain any discrepancies, and will substantively address these issues at the show cause hearing.”
The state senate account was audited between Jan. 1, 2018-July 31, 2019. Auditors said Ketron repeatedly reported an available balance that was not supported by bank records.
The auditors said they believe some of the missing funds were included in three checks totaling $7,000 that Ketron Randolph allegedly signed and that were payable to the family business, Universal International Insurance Agency Inc. (UII). Information on the checks were listed in an April 2019 Rutherford County Grand Jury indictment against Ketron Randolph, the auditors said.
According to the audit, the senate account’s disclosure statements from 2015-2017 show no disbursements to UII.
“As such, it appears that a portion of the missing $127,535 would relate to the $7,000 in check disbursements noted in the indictment,” the audit said. “The audit cannot determine an allowable reason for campaign funds to be disbursed to UII, nor was one provided by Mayor Ketron. Mayor Ketron, through his attorney, speculated that the disbursement could be a payment for an expense paid for Mayor Ketron’s Senate Campaign by UII. However, Mayor Ketron provided no supporting evidence indicating this had occurred. Therefore, the audit determined each disbursement to UII is an improper transfer of campaign funds for personal use.”
Ketron wrote a letter to auditors. It said he was not trying to “shirk responsibility for any errors.” He said that between 2014-2016 he was fighting Stage IV non-Hodgkin’s lymphoma. His daughter was his primary caregiver and as a result, he “may have given her more responsibility than she was ready for, through no fault of her own.” He also said he “never intentionally used funds donated to my campaigns for my own personal gain.”
During the audit period, the campaign received 50 cents in interest and there were no reported contributions or refunds, the audit said. There were $26,119.32 in deposits, including:
• May 31, 2018: $1,257.58 transferred; this combined the two Senate campaign accounts into one.
• July 3, 2019: The bank accepted a deposit of $16,595.60. On June 14, 2019, the bank posted a $16,595.60 credit to the account listed as “automatic charge off.” At the time of the automatic charge off, the campaign bank account had a negative balance of $16,595.60.
• July 23, 2018: A refund was a credit for an expense incurred on the same day. The campaign account showed a payment on July 23, 2018 of $396.42 for a truck payment. This payment was also on the bank statement. The truck payment and bank reversing credit happened on the same day, so the bank reversed the charge.
Regarding the July 3 and June 14 transactions, the audit said, “The bank appears to accept the deposit on July 3, 2019 to clear that ‘bad debit’ and close the account. The deposit funds on July 3, 2019 appeared to be all related to Kelsey Ketron.”
That deposit, according to the audit, included:
• “A $14,000 check written on the account of Henry S. Randolph III (Kelsey Ketron spouse) to Kelsey Ketron. The check having the notation ‘personal’ in the memo line.”
• “A $2,500 (sic) from Kelsey Ketron’s personal account written to ‘Bill Ketron’s Senate.’”
• A certified check in the amount of $95.60 from an unknown source; the check was basically cash deposited into the campaign account. Ketron was asked about this, and his attorneys said “it is likely the cash supporting the bank certified check is from Kelsey Ketron.”
Bill Ketron’s attorneys provided a statement to the auditors. It said a clerical error caused the campaign funds to be used to pay off the entirety of a personal credit card. The mistake was caught soon after that, and a deposit was made to reimburse the campaign account.
The auditors said these deposits were not contributions but appeared to be action taken by Ketron Randolph to repay her parents for personal transactions charged on their credit card. It appears the activity was processed on the senate campaign account.
Processing a personal transaction through a campaign account is not prohibited by statute, but is not recommended, the audit said. It runs contrary to the Tennessee Registry of Election Finance’s rules, which suggest that campaign funds be kept separate from personal funds. The regulations also help candidates in complying with state law that prohibits the use of campaign funds for personal use.
Other audit findings say Ketron:
• Failed to report $7,965.27 in disbursements incurred by the senate campaign. There were 70 unreported transactions totaling $4,460.63. Also, $3,339.64 was improperly paid to Ketron’s credit card for unidentified expenses, and the payment was not reported as an expense.
• Reported $32,920.89 in disbursements that appear not to have been incurred.
• Failed to provide a supporting receipt, invoice, or other supporting document for more than 80 expenditures totaling $20,204.57 incurred by the campaign. Recipients included Advance Auto Parts; AT&T; Thorntons; Nashville restaurant 5th & Taylor; Fifth Third Bank; Walmart; BJ restaurant; Kroger; Middle Tennessee State University ticket office; MTSU alumni events; Sam’s Club; and The Boulevard.
• Was in non-compliance for failing to retain sufficient disbursement records to determine the purpose and proper disclosure of several expenditures.
Ketron filed to run as a senate candidate in the August 2018 primary, the audit said. He named his daughter as treasurer for the 2018 election. He then ran as Rutherford County mayor and did not qualify for the senate race, but was required to file senate campaign finance statements. On March 4, 2020, after the audit period but while the audit was taking place, he named Jimmy Davis as political treasurer for the 2018 election.