Governor’s Fair Finance settlement yields just $3,000

Indiana Gov. Mitch Daniels, one of the largest recipients of indicted financier Tim Durham’s political largesse, has reached a settlement with Fair Finance Co.’s bankruptcy trustee that recovers just $3,000.

Daniels’ Mitch for Governor Campaign Committee received about $200,000 in contributions from Durham and his companies, including $90,000 in the four years before Durham-led Fair landed in bankruptcy court in February 2010. So-called fraudulent transfer law allows trustees to go back just four years to recover transfers.

Attorneys representing bankruptcy Trustee Brian Bash declined to comment. But court papers filed Tuesday afternoon show Daniels’ committee isn’t paying more because it has only $3,500 in cash remaining.

Daniels is in the final year of his second and final four-year term in office. Since he won re-election in 2008, much of his campaign war chest has gone toward supporting other GOP committees and candidates.

Those committees soon may hear from attorneys for Bash. Under the settlement, the Mitch for Governor Campaign Committee consented to have a $90,000 judgment entered against it—a move that sets the stage for the trustee to try to collect from those committees. In the settlement, the Mitch for Governor Campaign Committee affirmed the trustees’ right to pursue recoveries from subsequent transferees.

Jane Jankowski, a spokeswoman for the governor, was not immediately available for comment.

Daniels is the last major politician to settle with Bash. The largest deal, struck late last year, was with former Marion County Prosecutor Carl Brizzi, who agreed to return $180,881. The 10 settlements Bash negotiated with candidates and committees are expected to recoup a total of more than $386,000.

Durham was one of the state’s largest contributors to GOP political candidates before his financial empire collapsed in late 2009. The trustee contends the payments were fraudulent transfers because they were made when Durham and his companies were insolvent.

The trustee since early 2010 has been trying to recover money for Fair Finance's investors—Ohio residents who purchased unsecured certificates with interest rates as high as 9.5 percent. Bash alleges Durham “utterly looted” Fair after buying it in 2002, stripping the business of the financial wherewithal to repay more than 5,000 investors who are owed more than $200 million.

Durham and two business partners, James Cochran and Rick Snow, were arrested in March after being indicted on 12 felony counts, including conspiracy to commit wire and securities fraud. They deny wrongdoing.

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