Former Missouri governor Roger Wilson pleaded guilty Thursday in federal court to a misdemeanor count of laundering $5,000 in campaign donations to the state Democratic Party through a St. Louis law firm.
By STEVE KRASKE
The Kansas City Star
Federal authorities alleged that Wilson, 63, transferred the money while he was the top executive of Missouri Employers Mutual Insurance Co., a state-created workers compensation insurance agency.
At an arraignment in St. Louis before Chief U.S. Magistrate Judge Mary Ann Medler, Wilson entered his plea to misappropriating $5,000 from the insurance company. He is to be sentenced on July 9.
I made a mistake, Wilson said in a prepared statement. I have publicly acknowledged that mistake in court. I apologize to everyone for my mistake. I will bear the consequences of my mistake.
Wilson, of Columbia, was governor for a few months in 2000 and 2001, succeeding Mel Carnahan after he was killed in an October 2000 plane crash.
Wilsons guilty plea culminated a rapid-fire series of events that began when he was indicted late Wednesday. The charge was made public by federal authorities Thursday morning, and Wilson made an unscheduled appearance before Medler in the afternoon.
The speed of events caught U.S. Attorney Richard Callahan, who filed the charges against Wilson, by surprise.
I certainly had no idea it was going to happen today, Callahan said.
But he also said he had anticipated Wilsons decision to plead guilty, noting that the evidence was clear-cut. Callahan said the conspirators simply wanted to make a contribution with somebody elses money.
The charge carries a maximum punishment of a year in prison and a $100,000 fine.
Also indicted with Wilson on similar charges was attorney Ed Griesedieck, formerly of the Herzog Crebs law firm of St. Louis. He has not yet entered a plea.
Authorities alleged Wilson who led Missouri Employers Mutual from 2009 through last year took part in a 2009 scheme in which Herzog Crebs contributed $5,000 to the Missouri Democratic Party, which Wilson also once led, and then billed the insurance company for legal work to cover the $5,000 donation.
With Wilsons approval, Missouri Employers Mutual reimbursed the law firm. He allegedly did not advise his companys board of directors as to the real purpose of the $5,000 reimbursement.
The indictment also alleged a second donation of $3,000 from the law firm to the state Democratic Party later in 2009 under a similar arrangement. But in that instance, Wilson reimbursed Missouri Employers Mutual with a personal check after the companys lawyer questioned the legal billing.
In a statement, the insurer said it cooperated with the U.S. Attorneys Office throughout its investigation. The company said its board did not know or approve of the reimbursements to Herzog Crebs.
Upon learning this information, the board contacted the appropriate authorities, placed Mr. Wilson on leave, and after a full investigation terminated his employment, the company said.
Missouri Employers Mutual said an internal investigation found no other examples of inappropriately spent money.
The company has been and remains successful, and its future should not be tarnished by charges against individuals that are unrelated to the companys operation, the board said in its statement.
A Missouri Democratic Party spokeswoman said the party donated the suspect contributions to an unnamed charity that helps our veterans.
These are serious charges, but were learning the details about this situation in the papers, said party spokeswoman Caitlin Legacki.
The Kansas City Star first reported the matter was under federal investigation in September.
Established by the state in 1993, Missouri Employers Mutual provides low-cost workers compensation coverage for small businesses and now ranks as the largest workers compensation insurer in the state, with nearly $110 million in premiums written in 2010.
The company ran into a buzz saw of scrutiny last year, however, after the companys former chairman, Doug Morgan of St. Louis, was indicted in April on federal bank fraud charges.
Former company board member Karen Pletz was named in a 24-count federal indictment in March alleging theft, fraud and money laundering while she was president of the Kansas City University of Medicine and Biosciences. Both Morgan and Pletz are now deceased.
Following those unrelated indictments, Missouri Employers Mutual hired independent auditors and lawyers to conduct an internal investigation.
A state audit in February found that the company had doled out millions of dollars in bonuses and perks to its executives and that its tax-exempt status had helped the company save an estimated $50 million in taxes and amass a surplus of more than $160 million.
Some lawmakers in Jefferson City are pushing in this legislative session to remake Missouri Employers Mutual into a private insurance company. A bill sponsored by Sen. Jim Lembke, a St. Louis Republican, has been assigned to a committee, and a similar bill is moving through the House.
One bill that has passed the Senate and is now awaiting action in the House would establish an interim committee to study whether Missouri Employers Mutual should be sold, privatized or have its current structure modified.
Is it something that should no longer be this creation of the legislature that has a tax advantage over its competitors? Lembke asked Thursday. I think it has served its purpose and we should start the process of privatizing MEM.
Meanwhile, Sen. Scott Rupp, a Wentzville Republican and candidate for secretary of state, called Thursday for the Missouri Ethics Commission to take action.
This is now the third director or executive to be indicted at MEM, Rupp said. The need to pass my legislation to investigate MEM and determine whether it needs to be privatized is more important now than ever before.
U.S. Attorney Callahan said that the case was a small offshoot of a larger investigation of Morgan, and that no other charges against Wilson were anticipated. Callahan alleged that Morgan wanted to make contributions with somebody elses money and that Wilson and Griesedieck got drawn into it.
The indictment accused Griesedieck of requesting and signing a Herzog Crebs check for $5,000 made out to the Missouri Democratic Party. He also is alleged to have falsely included the amount in a legal bill sent to Missouri Employers Mutual with no detail that the money was, in fact, a contribution to the state party.
Griesedieck could not be reached for comment Thursday. But a partner at Herzog Crebs said Griesedieck had resigned this week after 20 years at the firm as a result of everything thats transpired.
In 2000, Wilson was nearing the end of two terms as lieutenant governor when fellow Democrat Carnahan died while running for the U.S. Senate.
Carnahans name remained on the November ballot, and he won the election. As governor, Wilson appointed Carnahans widow, Jean, to take her husbands place in the U.S. Senate.
Wilson had been a front-runner for the 2000 Democratic nomination for governor but abruptly dropped out in March 1998, citing a need to spend more time with his family. He never ran for office again, but he was the state Democratic chairman from 2004 to 2007.
Jefferson City correspondent Jason Hancock and The Associated Press contributed to this report.