‘A criminal enterprise’: House slams Greitens’ nonprofit but drops its investigation

Former Gov. Eric Greitens' dark-money nonprofit was “designed to illegally skirt donation limits and conceal the identities of major donors,” the chairman of the House investigative committee said in a memo released Monday.

But once Greitens resigned from office June 1, the House lost the ability to continue its investigation, GOP Rep. Jay Barnes, the committee's chairman, said in the memo.

Thus, he said, the legislature’s probe into allegations of illegal activity by Missouri’s former governor is over.

“I understand this may disappoint some of you — and some in the public — who demand further accountability for Eric Greitens,” Barnes said in the memo to the bipartisan members of the House investigative committee. “But we cannot investigate alleged illegal activity by someone else with actions of our own that are either illegal or create problematic precedent for future legislators.”

Barnes said he hopes Attorney General Josh Hawley, Cole County Prosecutor Mark Richardson or the Missouri Ethics Commission will pick up the inquiry where the House left off.

In his blistering memo, laced with a litany of accusations of criminal wrongdoing, Barnes said he believed the evidence gathered by the committee over the last few months would have led to Greitens' impeachment.

He said the committee had discovered evidence of “sexual assault and domestic violence” associated with Greitens' 2015 extramarital affair. And Barnes said documents acquired by the committee could have led to criminal fraud charges relating to how Greitens obtained a donor list from a veterans charity he founded and a grant from the John Templeton Foundation and Washington University.

But it was the committee’s investigation into Greitens’ nonprofit, A New Missouri Inc., that drew the most attention in the days leading up to his resignation.

A New Missouri was founded by Greitens’ political allies in February 2017. Because it is a nonprofit, it is not required to disclose its donors or abide by campaign donation limits.

According to publicly available information, A New Missouri spent more than $2 million over the last year on political ads and contributions to campaign committees advocating on behalf of a right-to-work law.

It's unknown how much more the nonprofit spent that wasn't publicly disclosed.

The House committee issued a subpoena to A New Missouri last month demanding it turn over documents that lawmakers thought could demonstrate efforts to illegally circumvent the state's campaign disclosure laws.

A Cole County judge initially agreed to force A New Missouri to comply, setting off a panic among the nonprofit’s donors that the inner workings of the dark-money organization were about to be opened to public scrutiny.

Once Greitens resigned, however, the House dropped its effort to enforce the subpoena.

"Make no mistake," Barnes said in his memo, "Missourians deserve a full accounting of A New Missouri Inc., which I have come to believe was a criminal enterprise from its inception."

Barnes said the documents the committee obtained show that "those in charge of the Greitens’ campaign had a scheme to hide donor identities and attempt to funnel donors to a (nonprofit) if a potential donor’s identity would either be politically troublesome or they were otherwise prohibited by federal or state law from contributing to the campaign."

Catherine Hanaway, a former Republican House speaker who represents A New Missouri, said in an email to The Star that she wasn’t sure what Barnes hoped to accomplish by releasing his memo.

“He acknowledges that, since the governor resigned, he has no more authority to investigate,” Hanaway said. “Yet, he is still going to complain — to the (Missouri Ethics Commission), prosecuting attorneys, the Missouri Attorney General and federal authorities, all of whom have known about these events for a long time and have ample investigatory powers and experienced agents. Yet none of them have filed any criminal charges against the campaign or A New Missouri. “

Barnes said he was preparing a complaint to be filed with the state ethics commission against Greitens’ campaign and A New Missouri.

One possible alternative, according to Barnes’ memo, is that Hawley could investigate.

Hawley, a Republican, is already investigating whether Greitens’ use of social media violated Missouri’s open records laws. He previously launched investigations into Greitens’ use of a self-destructing text message app called Confide and of Greitens’ use of the veterans charity’s donor list.

The attorney general’s office enforces the state’s nonprofit laws, and A New Missouri registered with Hawley’s office as a charitable organization in March 2017.

But Hawley’s spokeswoman told The Star that the attorney general’s office lacks jurisdiction to investigate A New Missouri Inc. or similar 501(c)(4) nonprofits.

“Missouri law gives the Attorney General’s Office jurisdiction over charitable activities and the Missouri Ethics Commission jurisdiction over political activities,” said Mary Compton, Hawley’s press secretary.

Compton later added: “The distinction is based on the activity. If it’s political activity — like spending money to influence an election — it’s regulated by the Missouri Ethics Commission. If it’s a charitable activity, that falls under the (attorney general’s office).”

But James Khlar, executive director of the Missouri Ethics Commission, said his agency “does not have any direct statutory authority to regulate 501(c)(4) organizations.”

Elad Gross, a St. Louis attorney who previously worked in the attorney general’s office of Hawley’s Democratic predecessor, disagrees and believes the attorney general has all the jurisdiction it needs to investigate A New Missouri.

Gross filed a lawsuit against A New Missouri last week demanding that a Cole County judge order the nonprofit to turn over certain records.

“Missourians deserve to know who is influencing their government," Gross said.

Hanaway called Gross’ lawsuit ridiculous and said she’d soon be filing a motion to dismiss.

“Mr. Gross is clearly a Democrat operative trying to prolong the Greitens saga for political purposes,” she said.

In his memo, Barnes even raised questions about Greitens' best-selling book "Resilience: Hard-Won Wisdom for Living a Better Life." The book consists of a series of letters written to a friend of Greitens who was a former Navy SEAL struggling with life after military service.

"This appears to be false," Barnes said. "The original manuscript for the book was likely written by one of Greitens’ assistants, and it was only after that manuscript was complete that Greitens began editing the book into a series of 'letters.' "

Drew Sheets, the former Navy SEAL who purportedly exchanged letters with Greitens in the book, told The Star last month that the premise of the book is true. He had been writing letters back and forth with Greitens when Greitens said he was thinking of making it into a book.

"I told him that was really awesome," said Sheets, who appeared in "Resilience" under an alias. "I love it that my story can help others. It’s a really good book. I give it to a lot of veterans and to a lot of people in trouble who are in a hard time and they always love it and say it helps them."

The Star's Allison Kite contributed to this story.

This story was originally published June 25, 2018 at 12:27 PM with the headline "‘A criminal enterprise’: House slams Greitens’ nonprofit but drops its investigation."