JEFFERSON CITY — Gov. Mike Parson’s administration is doubling down on its support for a nonprofit that promotes Missouri businesses, proposing a $1 million boost to the organization’s budget.
The Hawthorn Foundation, launched in the early 1980s, could see a 33% funding increase for the fiscal year that begins in July, from $3 million in overall funding this year to $4 million.
The proposed investment underscores the importance Parson’s administration has placed on such recruitment activities. But some members of the Legislature have questioned the support, wondering if the money would be better spent elsewhere.
The top-ranking Democrat on the House Budget Committee voiced concern about the funding boost due to the Hawthorn Foundation’s close relationship with Parson and its lack of transparency standards comparable to those of state government agencies.
“I’m not particularly inclined to expand funding of this entity that seems to operate in a somewhat shady way,” said Rep. Peter Merideth, D-St. Louis.
“It’s a government arm that isn’t subject to the transparency of government,” he said.
He said the hiring of Becky Willard, a political fundraiser and the spouse of Parson’s chief of staff, Aaron Willard, advanced his belief that the organization is a “political arm” of the governor.
“Now that they’ve gone and hired who they have to run it I think it’s even clearer that it’s being used more and more as a political arm than as just a state economic development arm,” he said.
Peggy Smith, spokeswoman for the Department of Economic Development, said the increase would “bolster the state’s business recruitment and attraction efforts.”
She said the funds would flow directly to the Missouri Partnership, a second nonprofit the Hawthorn contracts with for business recruitment services.
“This request did not originate with the Governor’s Office,” Smith said when asked if the governor’s office proposed the $1 million increase.
“None of the funding requested will remain with the Hawthorn Foundation,” she said. “Especially in times of economic recovery, it’s incredibly important to invest in activities that will promote further job creation and growth.”
Hawthorn’s funding comes from the Economic Development Advancement Fund, created in 2007, according to budget documents.
“This fund grants the Department (of Economic Development) the authority to collect a fee from awardees on certain state tax credits issued, (and) direct those fees to the fund,” budget documents say.
The $1 million boost won’t be from general revenue, the documents said.
House Budget Chairman Cody Smith, R-Carthage, said he has mixed feelings about economic development programs and incentives.
“I tend to think that lower taxes, lower regulations are a better way (to) create an environment to foster business in Missouri,” he said. “But I acknowledge that we are competing with other states that aggressively pursue businesses.
“Because of that, we should compete on some level with other states through these types of programs,” he said.
Role in hiring
The funding increase would follow the hiring of Willard in March as the foundation’s executive director.
The Post-Dispatch reported then that Hawthorn’s executive committee selected Willard.
Asked if the governor’s office had any involvement in the hiring process, John Sebree, the chairman of the Hawthorn Foundation, said “not at all.”
But emails obtained by the Post-Dispatch through an open records request reveal an interest by Parson and his administration in the hiring process, which Sebree, CEO of the Missouri Realtors Association, did not mention in March.
On March 3, Rob Dixon, an ex-officio member of the executive board and director of the Department of Economic Development, told Sebree that Parson wanted to meet and to have the final say on the hire.
“He would like to reserve the choice between the two finalists, rather than us presenting one recommendation,” Dixon said. “He doesn’t want us to come in with our pick. He wants us to give him our counsel on both candidates, but he wants to make the final decision between the two.
“This is a change from what we discussed earlier,” Dixon said, “but I don’t think it changes any of our plans or process. It just stops short of us making the final pick.”
Aaron Willard was also personally involved in the hiring process, records show.
“After our meeting where Aaron Willard presented to the Board, we ended up with a good number of candidates for the Executive Director position,” Sebree said in a Feb. 11 email. “Aaron, Rob and I have talked several times this week and have a group of five that we’d like to interview.”
But asked if Parson ultimately made the hiring decision, Kelli Jones, spokeswoman for the governor’s office, and Sebree, said he did not.
“The Hawthorn Foundation Executive Committee chose Becky Willard,” Jones said in an email.
“What Rob mentions in that email is not how it ended up playing out,” Sebree said. “The executive committee chose Becky.”
Other applicants included Fred Parry, a former Republican Boone County commissioner, emails show. On Feb. 18 he asked University of Missouri System President Mun Choi to consider writing him a letter of recommendation.
“I know that you currently serve on the Executive Committee of the Foundation and your support would certainly mean a great deal to me,” Parry said in an email to Choi.
Sebree said in March the foundation needed a “fundraiser,” and that Willard had raised funds for Sen. Roy Blunt, R-Mo., for five years.
Indeed, underscoring the importance of fundraising to Hawthorn, when Bayer was late on an annual $50,000 donation to the foundation, officials discussed personal outreach from Parson to the company.
“Director Dixon and the Hawthorn leadership felt that a call from the Governor would be beneficial as so much connectivity has been lost during COVID,” a March 1 meeting request said. “Hawthorn wants to ensure that Bayer continues to see the value of their investment.”
The Hawthorn Foundation has long bankrolled international business mission trips for Missouri governors. The Post-Dispatch reported in May that Parson trips to Israel, Greece and the United Arab Emirates were possibilities this year. But the governor’s office as of October had yet to announce travel plans.
For fiscal year 2020, the group paid nearly $74,000 in travel or entertainment expenses for public officials, according to the group’s latest tax filing.
Its largest expense was the transfer of $2.72 million to the Missouri Partnership; it received $2.25 million in government grants, according to its latest filing.
Other revenue included $862,000 in membership dues.
Bond a contractor
Beyond transferring the entirety of its state support to the Missouri Partnership, the Hawthorn Foundation also continued to pay Clayton-based Kit Bond Strategies six figures for consulting services.
Christopher S. “Kit” Bond, a former Missouri governor and senator, helped launch the Hawthorn Foundation in the early 1980s.
In the annual period covered by the latest available tax filing, Kit Bond Strategies was paid $187,000 by Hawthorn, while Memphis, Tennessee-based law firm Baker Donelson received $190,000 for consulting services.
Becky Willard did not respond to questions about the contract and a request for invoices from the company.
Sebree said Hawthorn partners with the Department of Economic Development “to promote the enhanced role of the military, military bases, military installations and agencies, defense industries, defense-related research, and veterans in the economy of the state.”
He said the two contractors perform that work.
“Both of these firms have provided excellent work for the Foundation and the State of Missouri and have given us no cause for concern,” Sebree said. “The contractors work in coordination with the Office of the Missouri Military Advocate.
“This position is currently vacant; however, once the new Advocate is appointed and confirmed, Hawthorn Foundation intends to work with the Advocate to bid the contracts,” Sebree said.
Originally posted at 9 a.m. Saturday, Oct. 30, 2021
Editor’s note: A previous version of this article misstated Sebree’s title with Missouri Realtors.