Former Missouri Gov. Roger Wilson has pleaded guilty this afternoon in connection with indictments late Wednesday on allegations of laundering campaign contributions to the Missouri Democratic Party through a St. Louis law firm.
Herzog Crebs partner Ed Griesedieck, indicted along with Wilson, also plans to plead guilty, said his attorney Matt Schelp.
The $8,000 in contributions originated with a state-created workers' compensation company, Columbia-based Missouri Employers Mutual Insurance Co., and Wilson.
"I made a mistake. I have taken public responsibility for the mistake. I apologize to everyone. I will bear the consequences of my mistake and will have no comment other than that," Wilson said outside the courtroom, reading from a prepared statement.
The U.S. Attorney's Office said in a news release that Wilson faces up to one year imprisonment and a fine of up to $100,000. Wilson's lawyer, Robert Haar, said his client faces probation to six months in prison and the possibility of a fine.
"It's a misdemeanor, and it doesn't change all the good things (Wilson has) done for the state of Missouri," Haar said.
Asked whether the donation was earmarked for a specific person, Haar said he couldn't comment on the facts of the case.
Sentencing for Wilson, who appeared to enter his plea this afternoon, is set for July 9, 2012, at 1:30 pm before U.S. Magistrate Judge Mary Ann Medler.
More details to come soon on this breaking story.
ST. LOUIS • Former Missouri Gov. Roger Wilson and a St. Louis lawyer were indicted on a federal misdemeanor charge late Wednesday on allegations of laundering campaign contributions to the Missouri Democratic Party through a St. Louis law firm, the U.S. Attorney's office said Thursday morning.
State campaign finance records show that the contributions, $5,000 on Aug. 28, 2009, and $3,000 on Dec. 22, 2009, were from the Herzog Crebs law firm in St. Louis to the Missouri Democratic State Committee.
But Wednesday's indictment says that the $8,000 actually came from a state-created workers' compensation company, Columbia-based Missouri Employers Mutual Insurance Co., and Wilson.
They were made at the direction of former MEM board member Doug Morgan and with the knowledge and approval of Wilson, the indictment says, and came through former Herzog partner Ed Griesedieck, who was also indicted.
Herzog Crebs was repaid for the $5,000 contribution by billing MEM for a legal expense, which was part of a larger, monthly legal bill that Wilson approved.
Morgan asked Griesedieck to bill the $3,000 contribution in two parts to him, and planned to get reimbursed from MEM, the indictment says.
Griesedieck had at least one conversation with Wilson about both the contribution and billing, the indictment says.
By August of 2010, Morgan had not paid the bill, and told Griesedieck to bill MEM instead.
But MEM's in-house counsel reviewed the legal bill. When Wilson was asked about it, he denied any knowledge of the contribution or the agreement to bill it to MEM, the indictment says.
After talking to Griesedieck and Morgan, Wilson wrote a personal check for $3,000 on Nov. 3, 2010 to cover the bill.
The other MEM board members did not know about or approve the contributions, the indictment says.
The criminal charge, misappropriation of money by someone in the insurance business, carries a potential penalty of up to a year in prison, but both men will likely face no more than probation and perhaps a fine.
The indictment sheds light on a mystery that has recently surrounded Wilson, who served briefly as governor after Gov. Mel Carnahan's death in a plane crash in 2000.
Since June 2011, when he was ousted as CEO, Wilson has refused to talk about his departure from MEM. That silence contrasted with his two decades in public office, when he was known as a straight-shooter who was always quick with a quip.
The indictment is the latest scandal for Columbia-based Missouri Employers Mutual Insurance Co., the state-created workers’ compensation firm that has endured a year of setbacks to its public image.
Two former board members were indicted separately last year for alleged theft and fraud involving other organizations. The company’s former chairman, Doug Morgan, resigned in May, and questions mounted in June when the company forced out its chief executive officer, Wilson, without explanation.
Chuck Hatfield, a longtime political adviser to Gov. Jay Nixon, was retained by Missouri Employers Mutual to help manage the crisis. Jim Owen, a former law school classmate of Nixon, became the CEO.
During Wilson’s tenure, the state-sponsored insurance company made at least one political donation to Jay Nixon’s gubernatorial campaign, even though the governor controls the 5-member board of Missouri Employers Mutual by appointing three of the insurer’s board members.
According to the Missouri Ethics Commission, the firm contributed $4,000 to the “Jay Nixon for Missouri” committee on Dec. 30, 2008. The contribution was made after Nixon’s election but before he took office in January 2009.
A recent state audit took issue with Missouri Employers Mutual’s spending practices, but did not dwell on its political contributions. However, the audit noted that company funds since 2003 were used for $8,000 in political contributions to the Missouri Democratic Party; $7,400 in cash and in-kind donations to the Missouri Insurance Coalition Political Action Committee; and $4,000 in donations to gubernatorial inaugural festivities in 2005 and 2009.
State Auditor Tom Schweich portrayed a company that operates like a private entity, handing out hefty bonuses to employees, while enjoying federal tax-exempt status and other advantages that its private competitors lack.
The company was created by the Legislature in 1993 in response to a crisis in the state's insurance industry, when small businesses struggled to afford workers' compensation coverage. As an “independent public corporation,” the firm has avoided about $50 million in federal taxes since its founding, which has enabled it to accumulate a surplus of $163 million and become the state’s leading workers’ compensation provider.
The insurer paid about $1.58 million in severance benefits or settlement payments to four former top executives and employees who either resigned or who left the company in 2009 and 2010, the auditor found. The firm also has bankrolled lavish business jaunts to Hawaii and Mexico, along with sports tickets and suites for its board members, executives, employees and guests.
Amid state lawmakers' questions about the company's large surplus and tax-exempt status, Missouri Employers Mutual recently decided to pay its first dividend to members
Griesedieck's firm worked for Missouri Employers Mutual, but he had another connection.
He also represented a development company in a failed bid for a casino in north St. Louis County.
Last year, federal prosecutors claimed in an indictment that MEM board member and former chairman of the St. Louis County Planning Commission Doug Morgan told at least two friends he was a secret partner in the development company, North County Development LLC.
Politics ran in Wilson’s family.
Wilson was an assistant elementary school principal in Columbia in 1976 when friends persuaded him to run for Boone County collector, an office his father had held. Wilson’s grandfather had been Boone County sheriff when he was killed in a gunbattle with bank robbers in 1933.
Roger Wilson moved to the state Senate in 1979. Education and law enforcement were his focus, along with the state budget. He headed the Appropriations Committee for six years.
He won his first statewide election in 1992, edging out State Auditor Margaret Kelly in the lieutenant governor’s race. He won re-election in 1996.
Wilson was expected to run for governor in 2000 but dropped that quest in March 1998, citing a distaste for raising the millions of dollars needed for the campaign and a desire to spend more time with his family.
Wilson was nearing the end of his term as lieutenant governor in October 2000 when Carnahan was killed in a plane crash. Wilson took over as governor for three months, until Democrat Bob Holden was inaugurated.
After leaving the Capitol, Wilson worked for a money management firm. He served as the Missouri Democratic Party's chairman from 2004 to 2007.
The county government building in Columbia is named after him. A statute of him stands outside the building.
Griesedieck's profile has been removed from the Herzog website, and a reporter was told Wednesday that he was no longer with the firm.
In his 2008 profile, the firm said that Griesedieck was a partner and member of the firm's management committee and did corporate and real estate work and acted as general counsel for a number of medium and large corporations throughout the Midwest.
He also is a former city attorney and prosecuting attorney for several St. Louis County communities and hosted the “Ask the Attorney” program on KMOX for 20 years.
He graduated from Notre Dame and St. Louis University Law School, the site says.