When Josh Hawley quit his job as Missouri’s attorney general to become a U.S. senator, he handed his successor, fellow Republican Eric Schmitt, a slam-dunk lawsuit to score for state taxpayers. The evidence seemed incontrovertible that developer Paul McKee’s NorthSide Regeneration had committed tax fraud to the tune of $2.6 million. Schmitt scored a big one, all right — for the opposing team.
In sports, it’s called a thrown game. In Missouri politics, it’s called business as usual.
The Post-Dispatch’s Jacob Barker and Jack Suntrup took an exhaustive look Sunday into the longstanding financial interplay between McKee’s organization and Schmitt. The facts they laid out about this 11-year political partnership, nurtured by more than $150,000 in campaign donations, helps explain why the tax-fraud case went so badly awry in Schmitt’s hands.
McKee’s infamy in St. Louis traces back to his surreptitious acquisition of 1,500 acres of decrepit properties in north St. Louis starting a decade ago. Financing for his NorthSide Regeneration venture came through the Bank of Washington. The firm of McKee’s attorney, Steve Stone, also represents that bank.
Stone also helped write the 2007 Distressed Area Land Assemblage bill that allowed the state to grant generous tax credits to McKee for his north St. Louis venture. Of the $47 million in tax credits that came available, $43 million went to McKee. Over the years, companies tied to Stone have donated $88,000 to Schmitt’s political campaigns. Bank of Washington affiliates have handed over $52,000. McKee’s family members or their companies have donated $26,000.
In 2007, when Schmitt was making his first run for the state Senate, McKee pumped $2,600 into his campaign coffers in a single day. Stone’s firm added another $2,000 in 2008.
Schmitt sponsored legislation providing a $480 million state tax credit that would benefit McKee as he tried to develop a cargo hub at the St. Louis airport. Stone helped write the bill. Schmitt sponsored a bill to reauthorize and expand the distressed-area tax credit after it expired in 2013. The donation checks got bigger and bigger.
Schmitt’s spokesperson, Chris Nuelle, scoffed at the implication of a quid pro quo. He labeled as “completely unfounded” any suggestion that generous donations had any influence over the decision to settle the $2.6 million tax-fraud claim against McKee’s NorthSide Regeneration for a mere $324,000. Schmitt’s office also waived all future claims for tax-credit abuses against NorthSide.
At no point did Schmitt, the state’s top law-enforcement officer, see the need to recuse himself from this case. Nuelle said subordinates handled the case but declined to say whether Schmitt had approved the settlement.
When it’s about campaign finance, Schmitt’s motto sounds a lot like pass me the bucks. But when it comes to accountability for his record with McKee, watch how quickly the buck gets passed.