Grand jury investigates loans to the re-election campaign of Gov. Sam Brownback

A federal grand jury is looking into loans made to Kansas Gov. Sam Brownback’s re-election campaign and has ordered the state’s ethics chief to testify next week as part of its investigation, according to a subpoena obtained by The Associated Press.

Carol Williams, the executive director of the Kansas Governmental Ethics Commission, was summoned to appear before the grand jury Wednesday in Topeka, according to documents the AP obtained through an open records request. She also was ordered to provide documents pertaining to loans Brownback’s campaign received in 2013 and 2014.

The subpoena doesn’t say which specific loans are being investigated, but the only loans listed on campaign disclosure reports for those years are one from Brownback and others from Lt. Gov. Jeff Colyer. Colyer loaned Brownback’s campaign $500,000 in August — the third such loan the governor’s running mate made to their re-election bid — according to the last disclosure report, filed days before the November general election.

Such large loans by candidates to campaigns are uncommon in Kansas, and the pattern of repaying one within days is a highly unusual move that has generated unanswered questions about where Colyer obtained such a large amount of cash.

In a statement released Thursday afternoon, Brownback spokeswoman Eileen Hawley said any federal probe is without merit.

“The campaign followed all applicable laws and ethics regulations and this investigation has no merit,” the statement said. “It is a common practice for candidates to make loans to their campaigns and any loans were done in compliance with Kansas law and ethics regulations.”

The U.S. attorney’s office declined to comment.

Brett Berry, general counsel for the ethics commission, released the document Thursday through the open records request but otherwise declined to comment. Williams also declined to comment.

Colyer told the AP in August that the two $500,000 short-term loans he made to Brownback’s re-election campaign are examples of the good stewardship Kansas residents expect from government officials.

“It was just simple cash management,” Colyer told the AP at the time. “It’s good money management, that’s all. That’s what you’d expect for me to do with the state’s money, too, is to manage it well. We manage our campaign well — that’s it.”

Earlier finance reports indicate that Colyer, a reconstructive plastic surgeon, made his first $500,000 loan on Dec. 31, 2013, the last day covered by a finance report due in early January 2014, and it was repaid on Jan. 2, 2014. He then made a second $500,000 loan on July 23, 2014, the second-to-last day covered by a finance report due in late July. That loan was repaid two days later, when a new reporting period started.

The third $500,000 loan from Colyer was made on Aug. 13. Documents released Thursday afternoon show the campaign repaid Colyer $400,000 on Nov. 21, with $100,000 of the loan still outstanding at the end of the year.

Brownback also loaned his campaign $200,000 during the last reporting period, and Thursday’s documents show that loan wasn’t repaid in 2014. Those are the only loans the Brownback campaign reported receiving in financial disclosure filings.

Colyer also refused at that time to discuss other details about the loans, such as the source for them. But he said the campaign didn’t keep his first loan because it wasn’t going to earn much interest.

Reporters also asked Brownback, after an unrelated statehouse news conference in August, whether he could explain the loans.

“I’m not going to explain the thought process,” Brownback said.

Democrat Paul Davis, who narrowly lost to Brownback in November, made the loans an issue on the campaign trail. Davis’ spokesman, Chris Pumpelly, said before the election that voters “deserve to know where this money came from.”

This story was originally published January 8, 2015 at 3:13 PM with the headline "Grand jury investigates loans to the re-election campaign of Gov. Sam Brownback."