Financial questions hound Indiana state treasurer candidates

Financial questions from years-old deals are dogging two top candidates seeking the Republican nomination for state treasurer and evoking memories of previous intraparty battles.

For Marion Mayor Wayne Seybold, questions about a deal to redevelop a former YMCA building in the city's core have bubbled up. A fight among church officials over a land sale has crept into financial adviser Don Bates' race.

Both cases are old transactions, but the questions have persisted as each man seeks the Republican Party's nod to become one of the state's chief investment officers.

Seybold, Bates and Kelly Mitchell, a top staffer in the treasurer's office, will seek the nomination next week during the Republican Party convention in Fort Wayne. The three are looking to replace Treasurer Richard Mourdock, who is term-limited and cannot seek re-election in November.

Seybold faces scrutiny over a $2.5 million loan Marion made in 2009 to a Korean businessman, Michael An. The money was offered through tax-increment financing, a popular economic development tool that provides developers money up front in return for the guarantee their property tax payments will repay that debt in the future.

But The Marion Chronicle-Tribune has reported extensively on questions about the deal — including whether the money was spent properly and if it will be repaid to the city. The paper's most recent story focused on a city refinancing of that loan in 2011 that decoupled the property tax payments from the loan, leaving open the possibility it may not be repaid if the project falls through.

Seybold said last week that the questions have been blown out of proportion and that the project is moving forward after hitting some road bumps. He calls the redevelopment of the former YMCA building crucial to his city's rehabilitation.

And he blames political opponents, including Grant County Democrats, for trying to take advantage of the statewide attention being paid to him as he runs for treasurer.

"Now you fast forward to me running for state treasurer, and now this has become this big political hot button," Seybold said.

In Bates' case, a former pastor at the church he attends accused him in a 2010 lawsuit of illegally selling $7,900 in church property. The suit, which was uncovered by libertarian blogger and talk show host Gary Snyder, is set for trial in August.

The Bates campaign provided a statement from local prosecutor David Daly saying he decided not to pursue criminal charges. It also provided a statement from a church official, saying that the former pastor did not speak on the church's behalf.

Whether the years-old issues resonate with the roughly 1,700 convention delegates remains to be seen.

Seybold has the backing of the state's establishment Republicans, while Bates is working with support from social conservatives and Tea Partyers.

Convention battles have proven to be some of the nastiest, in part because the target audience is not the voting public, but a select number of delegates. In the 2002 convention battle for secretary of state, Mourdock squared off against Mike Delph, now a state senator, and Todd Rokita, now a congressman. During the convention battle, flyers were circulated falsely claiming that Delph was throwing his support behind Mourdock.

Rokita ultimately won, served two terms and used the office as a launching pad for a congressional run. Mourdock won the treasurer's nomination in 2006 and is now term-limited from seeking re-election.

Whoever wins the nomination this year will face Democrat Mike Boland, a former Illinois lawmaker, in the general election.