Across America, taxpayers are concerned about politicians rigging the system. In many cases this looks like a “friends and family plan” in which the close associates of politicians get special favors and perks. A prime example is the campaign fund of Chicago Mayor Rahm Emanuel. During the 2015 mayor’s race, our team at OpenTheBooks.com found 600 Emanuel donors who contributed $7 million in campaign cash (2011-2014) while their affiliated companies received $2 billion in city payments (since 2002).
Emanuel was hardly the first Illinois politician to engage in “pay to play” politics. In 2008, the Chicago Tribune found that 235 individuals made donations of exactly $25,000 to then-Governor Rod Blagojevich’s campaign and discovered that “3 of 4 donations came from companies or interest groups who got something.”
If Missouri Sen. Kurt Schaefer’s (R-Columbia) campaign for Attorney General is any guide, it looks like the “Show Me” state may be following in Illinois’ footsteps.
Our investigators at OpenTheBooks.com have discovered that, since 2008, Schaefer raised $720,000 in campaign cash from 271 individual donors and their affiliated companies that also received $3.1 billion in state payments.
Use the interactive map above to search all FY2015 Missouri state payments to companies by ZIP code: zoom-in and click a pin to see state payments.
Schaefer isn’t a household name but he’s the big boss in the Missouri Senate. As either second-in-command or Chairman of the Senate Appropriations Committee since 2009 – Schaefer is in a position to win friends and influence people. Now, the ambitious Schaefer is running for the top law enforcement position in Missouri: Attorney General. So, our organization at OpenTheBooks.com compared the FY2008-2015 Missouri state checkbook with his campaign donations. Here’s what we found:
Two hundred-seventy one individuals or their affiliated companies gave $720,000 in political cash to Schaefer’s campaign committee. Those companies received $3.1 billion in state payments since 2008. That means campaign gifts from interested parties amounted to $1 of every $3 of Schaefer’s $2.08 million in campaign cash on-hand as of April 30, 2016.
All of these transactions are legal, but the pattern is troubling. Missouri may want to learn an ethics lesson from Illinois before it’s too late.
After the Blagojevich debacle, Illinois passed a “pay to play” prohibition. Any company receiving more than $50,000 in state funds is barred from contributing to statewide candidates or officials responsible for awarding the contracts.
What would happen if we applied a law similar to the Illinois ethics law to Schaefer’s campaign fund? Our analysis shows that 154 of his donors might have been stopped from contributing nearly $500,000 since 2008. In fact, 24 of Schaefer’s top 30 potentially conflicted donors (or their affiliated firms) received more than $50,000 in payments from the state of Missouri since 2008.
Here are some examples of Schaefer’s campaign donors with potential conflicts-of-interest:
Among companies receiving state payments, the top contributor to Schaefer’s campaign fund is Schaefer’s place of employment, the law firm of Lathrop & Gage LLP. Since 2008, the firm, partners and employees gave Schaefer $48,604 in campaign donations. Meanwhile, state records show the firm received state payments of $66,319.
While a partner at Lathrop & Gage, Schaefer faced allegations that he used his state senate position to benefit the law firm’s clients. In 2013, the allegations includedSchaefer’s support of legislation that allowed Chinese-owned companies to buy tens of thousands of acres of Missouri farmland. The now Chinese-owned Smithfield Foods company received that perk and Schaefer’s campaign fund received $30,000 from them (2013-2015).
Did Schaefer play favorites in his hometown of Columbia, Missouri? The Columbia-based Machen auto dealerships received $51.9 million in state business since 2008 and gave $6,750 in campaign donations to Schaefer. Emery Sapp & Sons received $315.2 million in state payments and gave $5,125 in campaign cash. MFA Oil Co received $121.3 million in state payments and gave $3,800 in campaign cash. (All campaign donations to Schaefer from the entities cited above were from partners, employees or the companies since 2008.)
With Schaefer creating the appearance of favoritism and cronyism on many levels, we asked him to release his personal income tax returns. We talked to his campaign manager, but at press time, Schaefer hadn’t responded on the merits.
It's alleged that other major campaign donors received the benefit of Schaefer carrying their legislation. For example, the Missouri Association of Realtors PAC gave $109,155 in direct and in-kind donations since 2008. The Realtors also funded an organization to fight off the elimination of the state’s income tax by hiring Schaefer’s chief of staff as a political consultant.
For the good of Missouri, here’s our recommendation: Take a lesson from fifteen states including Illinois and enact a tough “pay to play” law for statewide offices and officials responsible for awarding contracts, or other types of state payments.
I’ve often complained that corruption is the number one manufactured product in Illinois. If Missouri doesn’t rein in its politicians, corruption may become Illinois’ leading export.
According to a representative at Strong Garner Bauer, payments of $9.8 million (listed on our information graphic within this article) gleaned from the Missouri state checkbook “actually consisted of a jury award to their client in a suit against a state entity, a Chiropractor the state board put out of business through their gross negligence.”
The state payments were not as a result of state services (nor did we represent them to be state services – we’ve consistently used the more accurate term ‘state payments’).
We appreciate the additional context regarding the public purpose for the state payment into the law firm. Readers should be aware that the vast majority of all public payments would not have a legally actionable quid-pro-quo behind them – nor have we represented any such conduct. As we have stated in the article, at arm’s length, all of the transactions involving entities receiving ‘state payments’ and giving ‘campaign donations’ are entirely within the legality of Missouri statutes at this time.
Adam Andrzejewski is the CEO of OpenTheBooks.com - the worlds largest private database of government spending.