JEFFERSON CITY, Mo. — The U.S. attorney's office for the Western District of Missouri has been asked to open a grand jury investigation into a complaint from a Washington, D.C., watchdog group that state Sen. Ron Richard’s accepted a $100,000 campaign contribution from a Joplin businessman and his wife within days of filing legislation that might benefit the donor.
The nonprofit Campaign for Accountability filed the complaint and request Wednesday, alleging the contribution violated federal criminal law prohibiting campaign contributions in exchange for legislative assistance.
Richard is a Republican from Joplin and the Missouri Senate president pro tem. The campaign contribution came from David Humphreys, CEO of TAMKO Building Products, and his wife, Debra.
The legislative bill at issue would limit consumer protections under the Missouri Merchandising Practices Act and make it more difficult to file class-action lawsuits against manufacturers.
Richard told the Globe the Humphreys’ campaign contribution in no way affected his sponsorship of the bill, a measure he said he’s introduced three times now in legislative sessions to discourage frivolous lawsuits against Missouri businesses. He described the CfA's allegations of favoritism “reckless and not true, and they will not deter me from doing the work of the people.”
Globe requests for comment from Humphreys went unanswered on Wednesday. In a letter to The Kansas City Star last week, an attorney representing Humphreys said the check was written on that particular day simply because voter-imposed contribution limits were set to kick in the next day. It had nothing to do with the legislation, the lawyer wrote.
Wednesday's complaint and request for a federal grand jury investigation came after public criticism of Richard by two state lawmakers. One of those legislators, Republican Sen. Ryan Silvey, just a week ago suggested an investigation was warranted but said that it would not be his place to pursue the matter.
Rep. Mark Ellebracht, a first-term Democrat from Independence, said in mid-March that Richard’s bill to modify the Missouri Merchandising Practices Act would likely benefit TAMKO and thus raised concern.
Richard rejected the implications of the Silvey and Ellebracht statements as well as Wednesday's complaint. "It's unfortunate, but it's getting all too common for these types of baseless allegation to spread in this building,” Richard said.
The Campaign for Accountability describes itself as a nonprofit that uses "research, litigation and aggressive communications to expose misconduct and malfeasance in public life."
Dan Stevens, its executive director, previously served as a senior researcher at Citizens for Responsibility and Ethics in Washington, which has been accused of overwhelmingly targeting conservatives. One of its board members is Robin Brand, who the CfA’s website said previously worked for the Democratic Party. Another board member is Nick Hackworth, who most recently served as director of strategic research for Barack Obama’s 2012 presidential re-election campaign. Board member Ben Fortney also was affiliated with CREW.
The CfA alleges a "quid pro quo" can be established by Richard accepting a campaign donation from Humphreys in exchange for introducing legislation, conduct the CfA said may find that both parties violated the Travel Act, a federal law that forbids the use of the U.S. mail or foreign travel for the purpose of engaging in illegal transactions.
The CfA complaint requested a grand jury investigation into whether Richard used his position to financially benefit TAMKO in exchange for campaign contributions. By doing so, the complaint alleges, he may have deprived his constituents, the Missouri Senate and the state of Missouri of his honest services.
Richard received more than $200,000 in campaign contributions in 2016 from Humphreys, according to campaign reporting records. He and his wife gave Richard $100,000 on Dec. 7, only six days after Richard pre-filed Senate Bill 5 for changes to the Missouri Merchandising Practices Act.
On Dec. 8, contribution limits approved by voters in November took effect. They set a limit of no more than $2,600 per candidate per election and were aimed at limiting the influence of money in Missouri politics.
There had been no limits on contributions to Missouri candidates since 2008, when the Republican-led Legislature overturned an earlier law. But Missouri voters last November overwhelmingly approved limits in a constitutional amendment.
As reported in the Globe in December, Humphreys and other family members gave away more than $3 million before the Dec. 8 deadline, including $1 million to Missouri Gov. Eric Greitens. Humphreys, who has been one of the biggest donors in Missouri politics in the past decade, made 13 donations that day, and many were to people who had received earlier donations, the letter from the attorney noted.
Another of those recipients was Josh Hawley, the Republican candidate who in November was elected Missouri attorney general. Hawley received $500,000 each on Dec. 7 from Humphreys and from Sarah Humphreys Atkins, a sister of the businessman and a consultant for TAMKO.
Hawley was one of the team of attorneys who court challenged a provision in the federal Affordable Care Act over a contraceptive requirement, known as Hobby Lobby case. One of the lawyers on that case was Paul Clement, a former U.S. solicitor general who is now listed as counsel of record for TAMKO in its petition before the U.S. Supreme Court.
One of the questions raised by legislative critics of Richard's bill is what effect, if any, it would have on a class-action lawsuit filed in Jasper County Circuit Court in 2014 against TAMKO’s Heritage Series Shingles. The two lead plaintiffs — a Texas County man named Lee Hobbs and Jonesburg United Methodist Church in Montgomery County — alleged the shingles were "warping, curling and beginning to fail" before the 30 years TAMKO said they should last were up, and that they allowed moisture in and led to damage to the buildings. The suit accused TAMKO of violated the Missouri Merchandising Practices Act.
TAMKO countered the lawsuit with the assertion the shingles became defective due to weather damage and improper installation.
The case has stalled for more than a year while courts addressed the question of whether a class-action suit could even be brought against TAMKO in the first place, with TAMKO arguing that the plastic packaging around the shingles bound customers to a mandatory arbitration agreement.
The warranty included an arbitration provision that stated, "Mandatory Binding Arbitration: Every claim, controversy, or dispute of any kind whatsoever including whether any particular matter is subject to arbitration … between you and TAMKO … relating to or arising out of the shingles or this limited warranty shall be resolved by final and binding arbitration, regardless of whether the action sounds in warranty, contract, statute or any other legal or equitable theory."
The claim that customers had agreed to arbitration with TAMKO has been made not only in Missouri but in other states as well.
As for the Missouri case, both the Jasper County Circuit Court and the Southern District Court of Appeals disagreed with TAMKO, and the Missouri Supreme Court deferred to the appeals court’s judgment. Right now, that question is pending before the U.S. Supreme Court.
Calls to Holland Law, the St. Louis firm representing both Hobbs and the church, were not returned.
If the U.S. Supreme Court rejects TAMKO's arbitration claim, the case returns to Jasper County Circuit Court to address the claims of Hobbs and others.
Richard has said his bill to modify the Missouri Merchandising Practices Act does not contain a retroactive provision and thus would not affect the 2014 class-action suit against TAMKO or any other pending court actions.
"No bill can do that," he said.
Ellebracht, the Democratic legislator and also a lawyer, disagrees. He said Richard's Senate bill and those filed by Rep. Glen Kolkmeyer, R-Wellington, whose House bill is similar to Richard’s Senate bill, take out a clause in the law that says “no order of dismissal under this section shall operate to divest a court of venue or jurisdiction otherwise proper at the time the action was commenced.”
By removing that provision, Ellebracht said, he believes defendants would have the flexibility to “attack” the appropriateness of the lead plaintiffs over the issue of class-action status in pending lawsuits.
While substantive changes to the law can’t be retroactive, procedural changes can be, Ellebracht said. Procedure can include questions over what cases the court can hear. Class certification requirements are procedural and a defendant can move “to decertify” at any time, he said.
Ellebracht said that if the class-action lawsuit is disallowed by the Supreme Court, all the plaintiffs would have to challenge TAMKO on the shingle question individually. He said they most likely would not have the funds to do so.
Two trial attorneys — David Angle of Columbia, and Ken McClain of Kansas City, who represented a number of employees of Jasper Popcorn in lawsuits against the manufacturers of butter flavoring used at the plant — backed up Ellebracht's concerns, though both said the issue of whether reforms of the Missouri Merchandising Practices Act could apply to pending cases would face a court challenge.
Missouri residents have filed 208 actions under the Missouri Merchandising Practice Act since 2013. Richard said he does not intend the bill to prevent those with "legitimate claims" from joining in a lawsuit and that he does believe there are times when class actions are appropriate.
Richard said his bill to modify the act is still being redrafted and will be part of the normal legislative negotiations. “We're trying to make sure it's fair and workable," he said.
Richard also said that Kolkmeyer’s changes to the merchandising act likely have a better chance of succeeding in the current legislative session than his own modifications.
Three single-issue bills sponsored by Kolkmeyer have passed the House and now await Senate action. If no changes are made, a vote by the Senate would put the bills on the governor’s desk. Kolkmeyer’s bills would require all class-action plaintiffs to be in the same county, and the elements of the case would have to be similar.
Kolkmeyer said his intention is to restrict out-of-state plaintiffs from clogging Missouri's courts.
Though he has no active campaign, Richard collected more than $1 million in campaign contributions over the past year. A form on file with the Missouri Ethics Commission lists plans for a statewide run for public office in 2020.
Richard said the filing keeps his options open and allows him raise funds to help other other Republican candidates so the party can maintain its legislative majority in 2018.
"It's in case I decide to, but I have no plans for that,” he said. “I have to keep an active committee so I can raise money."
Because of term limits, Richard will leave the Senate at the end of 2018. He has served in Jefferson City since 2003, first in the House of Representatives and then in the Senate after being elected in 2010. He has served as speaker of the House and has been Senate president pro tem since 2015.
He has run without serious — or any — opposition since he was first elected to the House. That has allowed him to use his campaign contributions to help elect other Republican candidates.
Richard started 2016 with nearly $400,000 in his campaign accounts. He collected more than $1 million over the year and made more than $960,000 in donations, primarily to other GOP candidates. He currently has about $250,000 in campaign accounts.
Richard said if he decides to end his political career, he will give money remaining in his campaign fund to the Senate (GOP) Majority Fund and to Missouri Southern State University.
In the month after the election, the Humphreys family made 13 donations to 12 entities the day before Missouri campaign limits went into effect:
• $1 million to newly elected Gov. Eric Greitens.
• $1 million to newly elected Attorney General Josh Hawley.
• $500,000 to the Missouri Republican Party.
• $100,000 to newly elected Secretary of State Jay Ashcroft.
• $100,000 to Senate President Pro Tem Ron Richard, R-Joplin.
• $100,000 to Senate Majority Floor Leader Mike Kehoe, R-Jefferson City.
• $100,000 to Senate Assistant Majority Floor Leader Bob Onder, R-Lake Saint Louis.
• $100,000 to Rep. Holly Rehder, R-Sikeston; now House speaker candidate and right-to-work legislation sponsor.
• $100,000 to Rep. Rob Vescovo, R-Arnold.
• $50,000 to House Majority Floor Leader Mike Cierpiot, R-Lee’s Summit.
• $50,000 to Rep. Shamed Dogan, R-Ballwin.
• $25,000 to Rep. Courtney Curtis, D-Ferguson.
Source: Missouri Ethics Commission