Local architect and former mayoral candidate Matt Kelty is facing a lawsuit filed in Allen Superior Court on Tuesday on behalf of a former campaign adviser who alleges Kelty still owes him $125,000 of a $150,000 loan he granted Kelty to fund his ill-fated campaign.

Frederick Rost III says Kelty “refused” and “continues to refuse” to pay him the remainder of the loan he issued him in December 2006, according to the lawsuit. Kelty used the $150,000 to make two personal loans to his campaign: one of $140,000 and one of $8,000.

However, that was before Kelty pleaded guilty Oct. 20, 2008, to misdemeanor false informing and two counts of felony filing a fraudulent campaign report. The plea came shortly after incriminating e-mails surfaced that proved Kelty lied to a grand jury when he said he had no knowledge of contributions to his campaign.

Kelty declined to comment on the suit. Rost's attorney, Kylee J. Shirey of Barrett and McNagny, also refused to comment, citing requests by Rost.

Kelty had insisted the $150,000 he received from Rost was a loan he planned to pay back, not a campaign contribution.

Rost, though, said payments stopped after he received $25,000, according to the lawsuit. In an interview last December with The News-Sentinel, Rost acknowledged the relationship between the two men had become strained. It was Kelty's decision to omit the source of the loan from his campaign-finance reports, Rost added.

The promissory note called for Kelty to make monthly payments of interest to Rost of $1,000 from January 2007 through November 2007, and $25,000 a month in principal payments from June 2007 through November 2007. Payments were to be made electronically between banks. The note calls for a late charge of 1 percent to kick in if payments arrive later than 10 days.

Rost later granted two amendments to the loan, giving Kelty additional time to make the payments. Those apparently were not met.

Rost is seeking repayment of the loan's principal amount of $125,000, plus late charges, interest and expenses. He is also requesting attorney fees and expenses.

Rost, now living in Colorado, is an executive with defense contractor with the Sierra Nevada Corp. and former president of the Allen County Right to Life Committee, which endorsed Kelty.