June 7, 2004

Secret Missouri Money Flowing Into Kansas Elections (2002)

At a JoCo Commission Open Forum at JCCC tonight I gave a 3-minute abbreviated version of this speech.  Unfortunately my time was up before I could start discussing Steve Cloud and his activities.

Thank your for this opportunity to discuss the bistate issue in this public forum.

There has been too much secrecy on the Missouri side, especially by the Greater Kansas City Chamber of Commerce, about just what is being planned and why.  This secrecy facilitated money flowing from Missouri into Kansas to affect our elections and that is what I'd like to talk about tonight.  We need more public discussion of these money flows to protect the integrity of our elections in Kansas .  My fear is this issue is more about power, control, and influence than the solution of any problem of interest to the public.  I suggest that we may not really need another election.  At this point perhaps we need an investigation.

My handout shows an overview diagram of several money flows from the 2002 election cycle.  After the diagram is a 4-page table of contents, followed by 40+ pages of documentation of what I'm talking about.  On the diagram and in the table of contents I've labeled major sections with letters of the alphabet.  Because of limited time, I will only touch on some of the information in this packet.

I'd like to mention that while I'm complaining about flow of political money into Kansas elections from Missouri , I cannot determine the source of this money.  It's possible the money came from Missouri sources, but it's also possible the money came from Kansas sources that were first sent to Missouri before returning to Kansas .  I'd also like to mention that I support the right of free speech expressed though political contributions, but we need less secrecy and better public disclosure of what is going on

In 2002 the Greater Kansas City Chamber sent $50,000 to Mike Gullion at Gold Banc for his Committee to Support Our Schools.  At the same time the OP and Lenexa Chambers of Commerce only contributed $500 each to Gullion's group.  Why is one Missouri group spending 50-times as much as the combined contribution of the OP and Lenexa Chambers to influence August 2002 primaries in Kansas ?  What was the source of this money?  What was the process by which this payment was approved?  Why did this originate in secrecy in Missouri ?

Mike Gullion says he gave $10,000 of the $50,000 to Larry Winn's Committee for Excellence, but Larry Winn says he received the money directly from the Public Affairs Committee at the Greater KC Chamber.  There is no controlling legal authority to even resolve what really happened here.  In light of the recent Securities and Exchange Commission actions against Gullion and Gold Banc, including a $100,000 fine paid by Gullion, a more complete explanation of where this money came from is in the public interest.

In 2002 several members of the board of directors of the Greater Kansas City Chamber formed a non-profit Missouri corporation to promote "social welfare and economic development." This group collected nearly half-million dollars in funds from unknown donors.  I have obtained copies of certain documents from the IRS about this Bistate Arts and Sports Corporation and I believe the IRS should be asking some serious questions: 

In a July 15, 2002 letter the IRS questioned the Bistate Arts and Sports group about their political involvement and how it was germane to their "social welfare" purpose.  Instead of answering the IRS questions, John Craft in a July 26, 2002 response said the corporation had ceased operation and had never made any political contributions.  However, documents easily obtainable from the Missouri Secretary of State show two rather large political contributions, each of about $20,000, were made in the two prior months.  This $39,500 total was given to the Greater KC Chamber's PAC.   Mr. Craft should have the opportunity in public to reconcile his statement to the IRS with the documents from the Missouri Secretary of State.

Another question the IRS should investigate is how the corporate funds were distributed when the corporation was dissolved.  Bistate Arts and Sports originally told the IRS the funds would be given to the American Stroke Foundation.  However, just prior to the dissolution of the corporation, the articles of incorporation were changed and the money was given to the Greater Kansas City Chamber of Commerce instead of the American Stroke Foundation.  Who is responsible for this shameful decision?  Stroke victims in particular should be outraged.

Finally, the IRS should challenge the contents of the IRS 990 forms filed by the Bistate Arts and Sports non-profit.  More detail should be provided than just "we spent the money."  This Missouri 501c(4) seems to have been established mostly to hide money.

Steve Rose should be commended for his voluntary disclosure of all receipts and expenditures by his Kansas Bistate Renewal Committee in 2002.  Rose had proposed voluntary quarterly reports of receipts and expenditures even though these reports were not required by law.  Rose's exemplary actions should have been emulated by those pushing the bistate tax on the Missouri side, instead of the secrecy we have observed.

So what happened to the $39,500 contribution given to the Greater Kansas City Chamber's PAC?  $20,000 was sent to Steve Cloud's Johnson County Republicans for Education PAC.  There is some circumstantial evidence that this Missouri PAC and Kansas PAC may have coordinated their efforts to give money to virtually the same set of JoCo candidates in the August 2002 primary elections.  Is it possible that from Cloud's perspective, the 2002 sales tax initiative for schools was less about schools and more about his power, his control and his influence in the county Republican Party and the state Republican Party?  Since Cloud only joined the KC Chamber in 2002, how did he arrange such a large contribution?  Or did they find him?  The Greater Kansas City Chamber, or Cloud's wife, contributed over half of Cloud's receipts in the reporting periods before the elections in 2002.  Did the Republican party elections really reflect the will of Republicans in Kansas ?  Were the 2002 elections more about Steve Cloud's will and the will of the Greater Kansas City Chamber?

In conclusion, we need more public discussion, more public scrutiny and less secrecy about this bistate issue.  We need less Missouri interference in our Kansas elections.  We need more public disclosure and accountability about the funds spent in our elections.   Our friends in Missouri should follow Steve Rose's example of good citizenship and accountability to the voters who are paying the bills.

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