Police, FBI investigate Elwood mayor’s campaign spending

Indiana State Police and the FBI are investigating the spending of campaign funds by the mayor of the small Madison County city of Elwood, a former campaign official said.

Former Elwood police chief Sam Hanna, who was treasurer of Mayor Ron Arnold's campaign committee, said state police detectives and FBI agents have interviewed him several times. He said they asked about out-of-state travel and personal expenses that Arnold rung up in 2012 and 2013, the Herald-Bulletin reported.

Arnold denies wrongdoing and said he wasn't aware of the investigation. His campaign finance records show that he spent about $7,000 for wireless phone service and nearly $4,000 for cable TV. Money also was allegedly used to pay for hotel rooms in Los Angeles, Louisville, and Nashville, Tenn.

Hanna said Arnold paid for the purchases with debit card that at times carried a negative balance. Hanna said he questioned some of the expenditures when he signed off on Arnold's 2012 and 2013 campaign finance reports.

"I was concerned," Hanna said.

FBI spokeswoman Wendy Osborne said she could neither confirm nor deny whether Arnold was being investigated.

A state police spokesman did not have any immediate information about an investigation when The Associated Press phoned Monday.

Madison County Prosecutor Rodney Cummings said last week that he initially denied a state police request for Arnold's campaign bank records, but approved it after investigators told him the campaign had paid for cable bills and a hotel room in California.

"There are several possible statute violations," Cummings said. "You can't use campaign funds for your own personal use."

Arnold, a Republican elected in 2011, said he had not traveled to California, but had made a payment to the home address of a hotel chain which is based in Los Angeles.

"I know people all over the state," Arnold said. "I could have been fundraising, campaigning or conducting duties as the mayor. Those should have been rightly paid by my campaign committee."

A state audit raised questions in December about travel expenses Arnold racked up during a business trip to Japan.

"I won't engage in politics of personal destruction," Arnold said.

Elwood is a city of about 8,500 people about 40 miles northeast of Indianapolis, between Tipton and Alexandria.

Indiana State Police and the FBI are investigating campaign finance spending by the mayor of a small Madison County city.

The treasurer of Elwood Mayor Ron Arnold's campaign committee told the Herald-Bulletin that he's been questioned by officers from both agencies about Arnold's expenditures for out-of-state travel and personal bills in 2012 and 2013.

Arnold's campaign finance records show that he spent about $7,000 for wireless phone service and nearly $4.000 for cable TV. Money also was allegedly used to pay for hotel rooms in California, Kentucky and Tennessee.

Campaign treasurer Sam Hanna said Arnold used a debit card for the purchases. Hanna says he questioned some of the expenditures when he signed campaign finance reports filled out by Arnold.

Arnold, a Republican elected in 2011, said he was unaware of the investigation. He told the Herald-Bulletin that he didn't travel to California but made a payment to a hotel chain's home address.

“I’ve had a group of people engaging in politics of personal destruction,” Arnold told the newspaper. “I won’t engage in politics of personal destruction.”

Before his election, Arnold was campaign manager for Indiana Gov. Mike Pence when Pence was a U.S. congressman.