Oct. 28, 2010 -- This story has been updated.
In the bitter U.S. Senate race in Kentucky, a local millionaire has helped launch a barrage of ads attacking the Democratic candidate – a candidate who, as the state's attorney general, is prosecuting the businessman's nursing home for allegedly covering up sexual abuse, records show.
The businessman's name is Terry Forcht. And like many super-wealthy conservative donors who are quietly stoking the GOP's mid-term election surge around the nation, the extent of his investment in the 2010 campaign is both vast and, for now at least, largely unknown.
In addition to donating personally to Republican Rand Paul's upstart campaign, Forcht is the banker handling funds for American Crossroads. The conservative group was founded by Republican strategist Karl Rove and has, through its non-profit arm, American Crossroads GPS, channeled millions into this year's campaigns without identifying its donors.
American Crossroads GPS and other outside groups that shield the identity of their donors have emerged as a fixture of the 2010 campaign season, thanks to a recent U.S. Supreme Court ruling that loosened restrictions on political giving. The case of Forcht's opaque role in the Kentucky contest offers a glimpse at why some election reform groups believe anonymous donations are so problematic.
"Secret contributions are a formula for scandal and corruption," explained Fred Wertheimer, president of the campaign finance reform group Democracy 21. "We learned that lesson in Watergate."
While Forcht would not return calls and a company spokesman would not respond to questions about Forcht's interest in the race between Paul and Democrat Jack Conway, circumstances suggest the wealthy Kentucky businessman has a significant stake in the outcome.
Forcht heads nine community banks, owns 18 radio stations, a newspaper, a monthly and a printing company, heads a real estate brokerage, and operates a chain of nursing homes. One published report said Forcht held extensive interests in 93 separate businesses, some of which are subject to federal regulation. But in spending to elect Paul to the U.S. Senate, Forcht is not only advocating for an ally in Washington.
He is also seeking the defeat of Conway, the same man who, as the Kentucky attorney general, has been leading an aggressive and very public prosecution of a Forcht-owned nursing home for allegedly covering up the scandalous sexual abuse of an elderly resident. The case was brought after the nursing home allegedly failed to report to authorities, or even tell the 88-year-old victim's family, that she had been sexually abused by another resident.
State records reviewed by ABC News show that Forcht is both the chairman and the registered agent for the Hazard Nursing Home, where the alleged incident took place. As such, Forcht was to be summoned to appear in a Kentucky court last month, state officials said. Forcht's company and its administrator have pleaded not guilty to the charges.
The case has been big news in Kentucky, with the lurid details of the elderly woman's abuse played out in state and local newspapers. Conway issued a press release upon bringing the charges, saying he wanted to make a public example of Forcht's nursing home. The charges, he said in a press release, were intended to "send a message to nursing home operators and administrators that they have an obligation to notify authorities if a resident is abused while in their care."
Forcht Hosted Rand Paul Fundraiser
As the case was brewing, Forcht was stepping up his efforts to see Conway defeated in the upcoming U.S. Senate contest. In July, Forcht and his wife hosted a fundraising reception for Paul at a Forcht Bank branch in Lexington.
Forcht has in one sense become a classic political "bundler" – a fundraiser who has tapped his vast network to gather thousands of dollars from friends and employees on behalf of Paul and other Republican candidates. By the tally of the Louisville Courier-Journal last weekend, Forcht bundled more than $21,000 in checks for Paul in just the last five days of June. And he raised more than $1.1 million for Paul and other Republicans over the past few campaign cycles.
Less is known about Forcht's ties to American Crossroads, the conservative group founded by Rove. The group's non-profit arm, American Crossroads GPS, has collected millions in secret to back GOP candidates. In August, American Crossroads filed papers with the Federal Election Commission identifying Forcht Bank as the temporary destination for the millions in deposits it was collecting on behalf of GOP candidates around the country.
"It is extremely unusual for a Washington, D.C.-based political committee that is raising money nationwide to use an out-of-state community bank as its campaign depository," said Brett Kappel, a D.C.-based election lawyer.
A spokesman for American Crossroads said Thursday that former RNC Chairman Mike Duncan, himself a community banker, recommended the group contract with Forcht for its banking needs, saying the group "sought to use a community bank that would have a high degree of customer service for our activities."
Jonathan Collegio told ABC News that Forcht has had "no role in American Crossroads or Crossroads GPS operations," but would not say whether Forcht donated money to the non-profit arm of the group. "We don't disclose donors to the 501 c4," he said.
"This is a desperate attempt to connect unconnected dots by a desperate campaign, which has no traction on any real issues," Collegio said.
Federal records show American Crossroads has spent more than $1.1 million on ads attacking Conway. American Crossroads GPS has spent $461,459 on anti-Conway ads in the past three weeks, according to filings with the Federal Election Commission.
The Paul campaign could not be reached for comment and a message left at the American Crossroads headquarters has not been returned. John Collins, a spokesman for Conway, said the outside group has waged an aggressive push in Kentucky. They financed automated telephone ads attacking Conway and sent a six-page mailer to hundreds of thousands of Kentucky households, Collins said. Conway has objected to the work by the group's non-profit arm – which does not disclose the source of its funds.
"Jack believes the people of Kentucky should determine elections, not anonymous donors," Collins, the Conway campaign spokesman, said this week.