Grand jury declines to indict political blogger

FRANKFORT — A Franklin County grand jury decided today not to indict Democratic political blogger Mark Nickolas in a tax case, said Commonwealth’s Attorney Larry Cleveland.

“As far as I’m concerned, this case is over,” Cleveland said.

Nickolas’ attorney, Scott White of Lexington, said, “Obviously we are ecstatic but not surprised that Mr. Nickolas has been exonerated. We felt that once we could present the facts to a grand jury everyone would realize that nothing improper had occurred.”

Cleveland said the state Department of Revenue alleged that Nickolas had violated state tax laws by soliciting funds for his non-profit blog, BlueGrassReport.org, and using the money for personal expenses.

The grand jury heard from the state department and an accountant for Nickolas before deciding not to indict, the prosecutor said.

“It looks like he may have used some contributed money for personal expenses but he gave back so much of his time and resources to the blog that the grand jury couldn’t determine that it appeared he did anything wrong,” Cleveland said.

White said Nickolas “has put a lot of his personal income and time into the blog.  This removes any cloud over his head and he can continue with his work.”

Jill Midkiff, a spokeswoman for the state Revenue Department, said the Nickolas case was “handled similarly” to other tax cases and the state plans “to proceed civilly” against Nickolas.

She said that meant the state would consider any use of non-profit funds by Nickolas for personal expenses as taxable income.

“We will review how much of the non-profit funds he used personally and send him a tax bill for that,” she said.  “I don’t know the amount but there will be a tax bill for him.”

Nickolas could appeal that to the department and then to the Board of Tax Appeals, she said, adding that any decision from the board could be appealed to Franklin Circuit Court.

Midkiff said politics played no role in the department’s action against Nickolas, whose blog often criticizes Republican Gov. Ernie Fletcher.

Several months ago, a Franklin County grand jury indicted Nickolas on three counts of willfully failing to file state income taxes for 2003, 2004 and 2005.

But Nickolas actually had filed the tax returns in December of last year. Cleveland then decided to drop the charges, which were sought by the state Department of Revenue.

Nickolas has said on his blog that he thinks the indictments were an attempt by the Fletcher administration to assassinate his character. A spokesperson for the department denied that accusation.

- Jack Brammer