Grand jury investigating loans to Sam Brownback’s re-election campaign

Sam Brownback
Gov. Sam Brownback (AP Photo/Charlie Riedel)

WICHITA, Kansas (AP) — A federal grand jury is looking into loans made to Kansas Gov. Sam Brownback’s re-election campaign and has ordered the state’s ethics chief to testify next week as part of its investigation, according to a subpoena obtained by The Associated Press .

Carol Williams, the executive director of the Kansas Governmental Ethics Commission, was summoned to appear before the grand jury Wednesday in Topeka, according to documents the AP obtained through an open records request. She also was ordered to provide documents pertaining to loans Brownback’s campaign received in 2013 and 2014.

KSN spoke with Williams over the phone Thursday. Although she could not and would not discuss the specifics of this investigation, Williams addressed some of the duties and responsibilities of the commission.

“Candidates have always been permitted to make loans to their campaign, and there’s no limitation on the amount of money a candidate or a candidate’s spouse can loan to the campaign. Oftentimes, candidates make loans from savings or some other source,” said Williams.

The subpoena doesn’t say which specific loans are being investigated, but the only loans listed on campaign disclosure reports for those years are one from Brownback himself and others from Lt. Gov. Jeff Colyer. Colyer loaned Brownback’s campaign $500,000 in August — the third such loan the governor’s running mate made to their re-election bid — according to the last disclosure report, filed days before the November general election.

Such large loans by candidates to campaigns are uncommon in Kansas, and the pattern of repaying one within days is a highly unusual move that has generated unanswered questions about where Colyer obtained such a large amount of cash.

The governor’s office said it was unaware of the investigation. The U.S. attorney’s office declined comment.

Governor Brownback’s office offered this statement:

Sam Brownback“The campaign followed all applicable laws and ethics regulations and this investigation has no merit.

“It is a common practice for candidates to make loans to their campaigns and any loans were done in compliance with Kansas law and ethics regulations.

“The latest campaign financial report will be filed today and will clearly show those loans are in the process of being repaid. Governor Brownback’s focus is on doing the people’s work, preparing a budget and an agenda for the upcoming legislative session.”

Kansas Senate Democratic leader Anthony Hensley offered this statement:

Kansas Senate Minority Leader Anthony Hensley

“This is a dark cloud that hovers over the process with the governor’s inauguration and a new legislative session beginning next week.

“Gov. Brownback and his people have a lot of explaining to do. The loans were clearly a tactic to deceive Kansas voters. My questions are, where did the money for the loans come from and were they made in accordance with state and federal law?

“Hopefully the Grand Jury will find the answers the people of Kansas deserve to know.”

Brett Berry, general counsel for the ethics commission, released the document Thursday through the open records request, but otherwise declined comment. Williams also declined to comment.

Colyer told the AP in August that the two $500,000 short-term loans he made to Brownback’s re-election campaign are examples of the good stewardship Kansas residents expect from government officials.

“It was just simple cash management,” Colyer told AP at the time. “It’s good money management, that’s all. That’s what you’d expect for me to do with the state’s money, too, is to manage it well. We manage our campaign well — that’s it.”

Earlier finance reports indicate that Colyer, a reconstructive plastic surgeon, made his first $500,000 loan on Dec. 31, 2013, the last day covered by a finance report due in early January 2014, and it was repaid on Jan. 2, 2014. He then made a second $500,000 loan on July 23, 2014, the second-to-last day covered by a finance report due in late July. That loan was repaid two days later, when a new reporting period started.

The third $500,000 loan from Colyer was made on Aug. 13, and it’s not clear whether it has been repaid. The next campaign finance report, which would disclose such a repayment, is due Saturday. Brownback also loaned his campaign $200,000 during the last reporting period. Those are the only loans the Brownback campaign reported receiving in financial disclosure filings.

Colyer also refused at that time to discuss other details about the loans, such as the source for them. But he said the campaign didn’t keep his first loan because it wasn’t going to earn much interest.

Reporters also asked Brownback, after an unrelated statehouse news conference in August, whether he could explain the loans, and he declined.

“I’m not going to explain the thought process,” Brownback said at the time.

Democrat Paul Davis, who narrowly lost to Brownback in November, made the loans an issue on the campaign trail. Davis’ spokesman, Chris Pumpelly, said before the election that voters “deserve to know where this money came from.”

KSN sat down Thursday with former U.S. Attorney Randy Rathbun to gain some perspective regarding how an investigation of this nature begins.

“For subpoenas to actually have gone out from the grand jury, that means someone had to, either a confidential informant or somebody, had to go to probably the FBI and make some sort of allegations that there were some wrongdoing,” explained Rathbun. “Obviously, the federal government can’t prosecute violations of state campaign laws, so there has to be something else that the U.S. Attorney’s Office is looking at.”

Rathbun confirmed that there is nothing wrong or illegal about a candidate giving personal loans to his or her campaign.

“We can only guess at this point what the U.S. Attorney is looking at in that case,” he said.

“There’s a number of different statutes that they [U.S. Attorney’s Office] can use to investigate public officials based upon violation of state law, but those, [it] wouldn’t be a prosecution for a violation of Kansas campaign laws,” Rathbun continued.

Because the investigation is ongoing, the grand jury cannot talk about it. Rathbun says no one will know why information is being subpoenaed unless there is an indictment.

Rathbun tells KSN News that with situations like this, where subpoenas have been distributed, investigations can take months.

Rathbun was a U.S. Attorney from 1993 – 1996.

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