No criminal charges for Monarch Beverage in campaign contributions investigation

A special prosecutor appointed to look into allegations of illegal campaign contributions made by Indiana's largest beer distributor won't bring any criminal charges against the company.

Former Indiana Inspector General David Thomas was appointed earlier this year to review allegations that Monarch Beverage illegally funneled more than $1.5 million in campaign contributions to several prominent elected officials. Monarch's competitors alleged that the company passed the money through a small limited liability company called Vision Concepts to bypass corporate campaign contribution limits.

In Thomas' report dated Wednesday, the special prosecutor wrote that he could find no evidence that Monarch violated the state's criminal laws by exceeding the limit of campaign contributions by a corporation, or making contributions in the name of another.

Monarch CEO Phil Terry, who denied the allegations when they were reported by IndyStar last year, said the company is satisfied with the report's conclusion.

"Monarch and Vision have known, believed, that our political activities have been legal, fully disclosed and in fact the special prosecutor’s report verifies that," Terry said Friday.

Complaint: Monarch Beverage improperly funneled campaign cash

​An initial election complaint against Monarch was made by the Indiana Beverage Alliance, a group of smaller beer distributors that compete with Monarch. But IBA President Marc Carmichael told IndyStar he asked for a criminal investigation after growing frustrated with months of inaction by the Indiana Election Commission.

Though the investigation notes that Monarch shares the same registered agent and physical address with Vision Concepts, it also found that most of the limited liability company's customer base was independent from Monarch.

"In fact," Thomas wrote in the report, "the investigation demonstrated Vision Concepts LLC had an average of 775 annual customers over the recent four-year period we examined."

Thomas wrote that investigators randomly selected and reviewed some of those customers, finding that they were viable companies independent from Monarch.

He continued: "a prosecution would be hard-pressed to prove that Vision Concepts LLC was making its campaign contributions in the name of another."

Though state law limits corporations like Monarch to giving $22,000 a year to state and local campaigns, it allows certain kinds of businesses, including limited liability companies, to make unlimited donations. That exemption, which exists because Indiana didn't have LLCs when the state's campaign finance laws were written, is often is used to skirt campaign contribution limits.

An IndyStar review of campaign finance records found that several of Monarch's competitors — including members of the Beverage Alliance — have affiliated LLCs that have contributed more than would be allowed under the corporate caps. The practice extends to real estate companies, telecom giants and engineering firms.

Exclusive: Special prosecutor investigating allegations against Monarch Beverage

Thomas' report says that even assuming Vision Concepts was completely owned and operated by Monarch, the law may allow separate and unlimited campaign contributions by a limited liability company.

"This declination of prosecution decision is not based upon what might be the best governmental campaign policy," Thomas wrote. "Instead, the sole inquiry and decision is whether there is evidence that someone should be arrested for violating a crime."

The report further notes that during its investigation, it found other companies that appear to have affiliations similar to that between Monarch and Vision Concepts, including entities within IBA's network.

"If so," the report says, "the issue of selective prosecution becomes a third challenge to a successful prosecution."

In a statement released Friday, Carmichael, the IBA president, said his organization was disappointed by the report.

"The investigation report raised new questions and failed to answer many of the concerns we raised with the (Election Commission) in 2014," the statement said. "While we are OK with there being no criminal charges at this time, we will talk among ourselves and decide what our next steps will be."

The report suggests IBA has additional options if it wishes to press the issue, including seeking a change to the law, asking the Election Commission to seek damages or petitioning the judicial branch for review.

Call IndyStar reporter Jill Disis at (317) 444-6137. Follow her on Twitter: @jdisis.

Call IndyStar reporter Tony Cook at (317) 444-6081. Follow him on Twitter: @indystartony.