Here’s how Mike Sanders’ alleged kickback scheme worked
Mike Sanders, who made his name in politics as a law-and-order prosecutor, engineered an illegal kickback scheme that netted tens of thousands of dollars while serving as head of Jackson County government and the Missouri Democratic Party, a participant in the conspiracy told The Star.
In recounting the scheme in an interview Wednesday, Steve Hill, a longtime friend of the former county executive, said that in 2010 Sanders offered him a proposition. Hill, a quadriplegic living on disability, said he needed extra cash and so he agreed to the arrangement.
On Sanders’ instructions over the next three years, Hill said, he cashed more than $60,000 in checks made out to him from bank accounts for Sanders-controlled political campaign committees. The money was ostensibly for work on those committees.
But, Hill said, he never performed the work and instead returned most of the money to Sanders.
The arrangement is the subject of a federal investigation that may be coming to a close after more than four years, The Star has learned.
“He came to me one day and said, ‘Man, here’s what I want you to do: Go cash this check for me, man, keep $200 or $300 for yourself,’” Hill said during a nearly two-hour interview Wednesday night.
“I thought about it for a minute. What the hell? All right, I’m in a wheelchair, man. I’m hurting for a few bucks. And $200 or $300 would help me out.”
Officials with the U.S. Attorney’s Office for the Western District of Missouri did not immediately respond to requests for comment on Thursday. Bridget Patton, an FBI spokeswoman, said the agency could not confirm or deny the existence of an investigation.
Sanders did not respond to multiple requests for comment. His attorney, J.R. Hobbs, declined comment in a phone call Thursday.
Campaign finance records reviewed by The Star show that the checks to Hill ranged from $1,175 to $5,300. They were sometimes issued just days or weeks apart for what the reports identified as a range of campaign services that were described in only general terms.
The records showed Hill as being paid for “constituent research,” “voter education,” and “GOTV” activities, the initials standing for get-out-the-vote.
Sanders would hand-deliver the checks to Hill’s rental home north of the river, Hill said. Then at Sanders’ instruction, he would cash the checks and return all but a small portion of the money in cash.
Hill said he needed the money to supplement his Social Security income. He’s used a wheelchair since his neck was broken during an assault nearly 30 years ago. After being evicted from his Clay County home last summer, he is temporarily living in a nursing home in Independence.
The two men have known each other since grade school and graduated the same year — 1985 — from Winnetonka High School in the North Kansas City School District.
Hill, 51, said he knew the arrangement wasn’t proper, but assumed the money was being used for political purposes. In fact, he said, Sanders “insinuated it” at times.
But the federal authorities who have been investigating Sanders and some of his associates for the past four years had another explanation for Hill.
“They were putting the money in their pocket,” Hill said. “They were stealing it. That’s what they (the feds) said.”
Hill shared his account with a federal grand jury a year ago. He said the FBI has been focusing on the payments since at least 2013.
Like Sanders, his former chief of staff, Calvin Williford, has hired a criminal defense attorney as the government looks into possible abuses of campaign funds. Williford declined comment via text message on Thursday.
Sanders controlled multiple campaign committees in addition to his own, but his name was not officially tied to them. One in particular has been the subject of the FBI’s intense interest because most of the checks to Hill were from the bank account of that group, Integrity in Law Enforcement.
Integrity in Law Enforcement was formed in 2004, when Sanders was county prosecutor, and occasionally spent money on his behalf and to support other Jackson County political candidates. It was terminated this summer.
Sanders was not officially affiliated with the fund, but sources familiar with Sanders and the committees said he exercised authority over its checkbook and had close ties to treasurer J. Martin Kerr. The two shared an office before Sanders left to become county prosecutor in 2002.
Kerr told The Star that federal authorities have been in contact with him “the last few years,” but he declined to discuss anything further about the investigation on the advice of his attorney.
“I don’t think I’m the target of any particular investigation,” Kerr said, “but just to be safe, that’s where I’m at.”
Sanders, 50, surprised political observers two years ago this month when he announced his resignation barely one year into his third, four-year term as head of Jackson County government. It was a sudden end to what had been a bright political career that cast Sanders as a contender for statewide or congressional office.
He was chairman of the Missouri Democratic Party from November 2011 to August 2013. Gov. Jay Nixon praised Sanders at the end of his term, saying he was “one of the most successful leaders of the Missouri Democratic Party in recent memory.”
When he resigned as county executive, he said he was leaving political life for a return to private law practice and a desire to spend more time with his wife and two sons.
“For me, I want to make sure I have enough time with my family and my kids,” he told The Star then. “That’s going to take some time.”
The decision puzzled political observers that Christmas season. Sanders had often been mentioned as a possible successor to U.S. Rep. Emanuel Cleaver or as a candidate for state attorney general.
According to Hill, it was about that time that the FBI began turning up the heat on him.
He said agents first approached his sister-in-law in late 2013 to ask about payments that Integrity in Law Enforcement had made to his brother, Joseph B. “Bruce” Hill, before he committed suicide on Thanksgiving Day in 2009.
Campaign finance reports show payments in excess of $40,000 to “Joe Hill” from July 2006 to April 2009 for a range of campaign duties, such as “candidate research” and “voter mobilization.”
The FBI also asked about Steve Hill at the time, he said, asking his sister-in-law, Shannon Hill, about his disability.
She declined to comment Thursday.
Steve Hill told The Star he let Sanders know of the FBI’s interest in a phone call at the time:
“I said, ‘Mike, Shannon just got a visit from some people who are poking around ...one of the agencies. The three-lettered agencies. You know man, I didn’t want to say the FBI is on your ass.
“He said, ‘All right, man, I’ll take care of it.’ And that’s the last time I talked to him.”
According to campaign reports on file with the Missouri Ethics Commission, Steve Hill received 14 payments totaling $52,275 from Sept. 7, 2010, to Dec. 4, 2013, from Integrity in Law Enforcement. He also received three payments totaling $6,950 in 2011 from Sanders’ personal campaign committee, Sanders for Jackson County.
He also received a single, $5,000 check from another Sanders-linked committee, the Jackson County Democratic Coalition.
He cashed so many checks, he said, that a teller at the bank asked what he had done to earn all that money.
“I said, well, ‘I’m a political consultant,’ ” Hill said.
Authorities became suspicious of the payments and first approached him in 2014. But Hill stuck with his story for more than a year that he performed the services for which he was supposedly being paid.
He finally told authorities the truth in early 2016, he said, after prosecutors threatened to charge him with Social Security fraud.
To substantiate his account, Hill provided The Star an email string between his lawyer at the time, former Riverside Judge Charles McKeon, and the criminal division chief for the U.S. Attorney's Office in Kansas City, Gene Porter. Hill faced possible prison time, Porter wrote, for failing to disclose more than $62,000 in income from other sources while collecting disability payments.
“Based on this evidence, there is probable cause to establish that between September 2010 and December 2013, your client committed multiple felony violations of various federal criminal statutes,” Porter told McKeon in the initial message on Jan. 6, 2016.
“The Government is prepared to present this evidence to a grand jury and obtain an indictment of your client charging him with multiple felonies. If your client is interested in discussing options for resolving this matter pre-indictment, please contact me as soon as possible to schedule a date and time to meet.”
Hill agreed to cooperate and is now paying back Social Security for any overpayments he received based on what he believes was his share of the kickback scheme, between $6,000 and $7,000, he said.
Hill said he still considers Sanders a friend, but was speaking out because he wanted the truth to be known and discovered.
“Integrity in Law Enforcement,” Hill said, “is about the biggest oxymoron ever.”