This article first appeared in the St. Louis Beacon, Oct. 6, 2012 - The battle for secretary of state got heated this week when state Rep. Jason Kander contended that House Speaker Pro Tem Shane Schoeller ran afoul of the state's conflict of interest statutes.
Kander, D-Kansas City, and Schoeller, R-Willard, are locked in a competitive race to replace Secretary of State Robin Carnahan. The office is an important one responsible for running the state's elections and penning ballot summaries for high-stakes ballot initiatives.
But this week, the offices -- which are under the auspices of the governor's office -- emerged as a contentious issue. Kander’s campaign this week put out a press release alleging that it was unethical and illegal for Schoeller’s wife to operate a Nixa fee office after he was elected as a state representative in 2007.
Gov. Matt Blunt’s administration in 2005 awarded the Schoeller Group, LLC, the southwest Missouri fee office, which handles drivers’ licenses, vehicle plates and tags, and registrations. Shane Schoeller formed the limited liability corporation in 2003 and eventually transferred it to his wife Mendie Schoeller in 2005.
Kander contends that as soon as Schoeller became a state legislator in 2007, his wife’s continued operation of the fee office violated a state statute barring elected officials or their spouses from performing “any service for the state or any political subdivision … or any agency of the state or political subdivision for any consideration in excess of $500 per transaction or $1,500 per annum."
The exception, the statute continues, is if the “transaction is made pursuant to an award on a contract let or sale made after public notice and competitive bidding.”
Back in 2005, governors divvied out the lucrative patronage awards without a public bidding process. The contracts were often -- and still are -- highly sought after and were often given to gubernatorial backers.
The amount of money that fee offices receive for handling state-provided items is public. Documents provided by Kander's campaign show that the Nixa fee office collected around $612,000 in processing fees from fiscal years 2007 to 2009. The costs to operate the fee offices -- and any profit -- are not public because the entities are private businesses.
Schoeller worked as an administrative aide for Blunt while he was secretary of state. During this year’s campaign, Schoeller has often pointed to his experience working for Blunt as one reason he should succeed Carnahan.
In a telephone interview, Kander sharply criticized the arrangement.
“Wwhen you look at this, at the very least it’s unethical,” Kander said. “And I think that according to the statute and publicly available documents, it could probably be illegal. So I think he should return money to taxpayers.
“Shane Schoeller’s been saying that he wants to bring and restore integrity to the secretary of state’s office,” he added. “I think that something obviously unethical is something that voters should consider.”
John Hancock – a spokesman for Schoeller and a former state lawmaker who ran for secretary of state in 1992 and 1996 – dismissed any suggestion that the Republican nominee had done anything wrong. And Hancock said similar situations popped up when he served in the Missouri House.
“I remember that there were two of the legislators back in those days where they or a family member had a fee office,” Hancock said. “My assumption is that it’s fairly commonplace – fairly common practice.”
Countered Kander: “He’s now saying that it’s OK because others have done it. And if someone commits a crime and doesn’t get caught, it doesn’t change the law. That’s not a defense – that’s an excuse.”
Hancock also said that the statute didn’t apply in this case because fee offices remit money back to the state, as opposed to receiving money to perform a service. But Kander spokesman Jack Cardetti said the statute makes no such differentiation, especially since the cited law bars an official or their spouse from “any” service or “any” consideration.
Blunt starting bidding out the offices in 2007, and Gov. Jay Nixon signed legislation in 2009 making the bidding process permanent. While the Schoeller Group put out a bid for the Nixa fee office after the process changed, the contract was instead awarded to Alternative Opportunities, Inc.
Schoeller highlights expunged tax lien
Meanwhile Schoeller’s camp fired back on Friday, questioning whether Kander had a tax lien expunged from his record for political reasons.
His campaign called on Kander to “cough up all documentation pertaining to a state tax lien that was filed against him in 2011 and the curiously timed decision by the Nixon administration to scrub the lien from the public record.”
Before Schoeller put out a press release, Kander’s campaign released a letter from the Department of Revenue stating that the lien had occurred in error. The letter states that Department of Revenue issued estimated billings to Kander for March 2010 and June 2010 quarterly withholding tax periods. It goes on to say that Kander contacted the department and indicated he had no employees during those periods of time.
"Based on this information, the department agreed that the estimated billings were incorrect," wrote Taxation Division director Todd Iveson in the letter. "On April 26, 2011 the department closed your withholding tax account and issued you a certificate of no tax due. Unfortunately, the department did not release the tax lien filed on March 18, 2011, for the estimated billings. Because the lien was not released, the tax processing system continued to operate as if there was still an outstanding balance on your account."
"The department filed an expunge affidavit... with the Jackson County recorder of deeds and corrected the tax processing system to ensure the department will take no additional actions on your closed account," Iveson added. "Enclosed is your refund of $175.24. Please accept my sincere apology for the inconvenience the department caused you."
