Commissioners fail to disclose nonprofit board memberships

At least four of the five members of the Sedgwick County Commission were in violation last week of a state law that requires they disclose membership on community and charity boards where they serve.

Some of those boards then received millions of dollars in county funding in the budget that the commission passed Wednesday.

The situation came to light after Commissioner Lacey Cruse, also a member of the board of the Kansas African American Museum, sought and received a $450,000, five-year commitment from the county to help move the museum from its current location in the shadow of the Sedgwick County Jail.

Cruse offered the amendment to the budget after a significant lobbying effort by other members of the TKAAM board who had met with commissioners individually while the budget was being formulated.

It passed unanimously.

The museum, the latest user of the building that housed one of Wichita’s first Black churches, is on a side street surrounded on three sides by the jail.

Efforts to move it have been underway for at least two decades, including an attempt by the city of Wichita to grant the group land, a site that was given back when the nonprofit organization couldn’t raise enough money for a new building.

Expert warnings

The vote on TKAAM came about a week after an Aug. 16 ethics training session, where commissioners were warned against voting on nonprofits’ funding while also serving as board member.

The training session was conducted by Shauna Woody-Coussens, a managing director at BKD, the firm that does the county’s financial audits. She was asked to provide the training as the county prepares to spend about $100 million in COVID-19 relief money

“A common conflict of interest in local governments happens when office holders face a vote on a real property or land use matter that affects their personal holdings,” she said. “Other examples include voting to grant a benefit to a company in which the office holder owns stock, or even to a nonprofit organization on whose board the office holder may sit as a director.”

She also addressed why it’s important.

“If they’re not recognized and controlled appropriately, (conflicts of interest) can undermine the fundamental integrity of the officials, the decisions that are made, agencies, and the governments themselves,” she said. “Also, conflicts of interest interfere with basic ethical principles of fairness and treating everyone the same.”

But according to County Counselor Mike Pepoon, commissioners advocating and voting for county funding for nonprofits doesn’t violate the state’s conflict-of-interest statute, which exempts service on such boards from a general prohibition on public officials voting on funding that benefits their personal interests.

However, a different section of state law also requires all board memberships be disclosed on the officials’ Statement of Substantial Interests for Local Officers.

Collectively, commissioners serve on at least 30 boards that aren’t disclosed on their forms, according to Eagle research using organizational websites, tax forms, commissioners’ county biographies, campaign websites and an online database compiled by ProPublica, a nonprofit news organization.

Cruse said there was nothing wrong with her advocating for TKAAM.

“Do I think the motion I made and being on the board of this non profit was a conflict of interest? My answer is no,” she said in an e-mail. “Since the beginning of this process, I have been open and honest about my position on this board and how the process to receive this funding would need to go. I made no promises of this funding and have communicated that clearly to the board. I have nothing personal to gain and have no financial interest in the outcome of this vote. “

In Wednesday’s budget meeting, she pitched it as “an opportunity to provide funding to a museum who has been hidden in our community,” Cruse said. “Hidden by a county jail, hidden by a county building, hidden by a parking garage.”

‘Conflicts all over the place’

Commissioner Jim Howell said Cruse advocating for more TKAAM funding didn’t raise any red flags because such arrangements are commonplace at the commission and have been going on for years.

“There’s conflicts all over the place,” Howell said. “When Lacey brings forward a proposal about spending money on TKAAM, it just sounds like we’re kind of used to that. I hate to say it, but I don’t think there’s much thought to whether that’s appropriate or not because it’s kind of normal these days, that some of these [commissioners] are going to advocate for their boards.”

Howell’s own disclosure form is the only one that was up to date when the board passed the budget Wednesday. It shows he serves as an officer or director on two boards: the Kansas State Rifle Association and Calvary Baptist Church in Derby.

He last updated it May 4 after being interviewed by The Eagle on rumors that some commissioners may have had undisclosed ties to a private ambulance service while making decisions on running the public Emergency Medical Service. Those rumors didn’t pan out.

The king of undisclosed board memberships is also the chairman of the commission, Pete Meitzner. He hasn’t filed an updated statement of substantial interest since January of 2014 when he was running for re-election to the Wichita City Council. He was elected to the Sedgwick County Commission in 2018.

A check of public nonprofit tax filing records and websites show Meitzner has participated in at least 16 nonprofit and quasi-governmental boards since then.

To date, Meitzner’s board memberships have included Downtown Wichita, Greater Wichita Partnership, Visit Wichita, WSU Tech Advisory Board, Exploited and Missing Child Unit Board, South Central Kansas Transportation Coalition, Wichita Area Metropolitan Planning Organization, KDOT Rail Plan Advisory Committee, K-254 Corridor Development Association, Regional Economic Development Partnership, Midwest Interstate Passenger Rail Commission, Cerebral Palsy Research Foundation of Kansas, Lord’s Diner, Center Industries Corporation, Business Technology Center Opportunities, Inc., and National Baseball Congress Foundation.

Meitzner voted to distribute CARES Act money to at least two of those organizations: $951,732.95 to WSU Tech for workforce development and $40,919.60 to the Cerebral Palsy Research Foundation of Kansas for public health and/or social service costs.

Meitzner did not return a phone call Friday seeking comment.

Cruse also participated in a vote to approve $65,496.69 in CARES dollars to HumanKind Ministries Wichita, Inc., whose board she sits on.

Consequences could vary

Violation of the state disclosure law for public officials — a class B misdemeanor — could result in a six-month jail sentence or a fine up to $1,000. But the state takes a light hand on enforcement.

In the most recent local case, former Wichita Mayor Jeff Longwell failed to disclose his ties to companies that had provided him gifts in the form of golf outings, dinners and other perks. He then steered a $500 million contract for the federal-loan-funded Northwest Water Treatment Facility to those same companies, without disclosing the relationships.

District Attorney Marc Bennett investigated the case and acknowledged in late 2019 that Longwell violated the disclosure law. But he declined to file charges, citing the Kansas Governmental Ethics Commission’s practice of not penalizing elected officials for failing to disclose and instead just asking them to file a corrected form.

Since then, the Wichita City Council has adopted a new ethics policy limiting gifts to elected officials from contractors, and most council members have been diligent at updating their interest disclosures each year. But the Sedgwick County Commission is a different story.

State law is clear on the lack of disclosures: It requires an update be filed by the end of April for the preceding year, but only if there’s a change that needs to be reported.

Howell admitted that he’d been lax about filing in the past, serving on the nonprofit boards that run Exploration Place and the zoo without listing them on his disclosure form.

He said he’s been invited to join two more boards, a veterans group and a Hispanic business association, and will update again when he takes on those roles.

He said the county needs to update its own code of ethics, which is pulled verbatim from a template provided by the Kansas County Commissioners Association.

“Based on the conflict of interest opinions we had a week ago, I’m not sure it’s appropriate we sit on these boards at all, unless we truly want to recuse ourselves on these decisions that might be overlapping,” he said.

The county is working on an updated ethics policy, but only for county workers, not elected officials.

The substantial interest form supplied by the state requires local candidates and officials to list “any organization or business in which you or your spouse hold a position as officer, director, associate, partner or proprietor.”

It specifies that disclosure is required “notwithstanding the provisions of K.S.A. 75-4301, and amendments thereto, which provide that these individuals may not have a substantial interest in these corporations.”

Pepoon acknowledged the disclosure problem after The Eagle raised the issue. He sent commissioners an e-mail Thursday urging them to update their disclosures and offering Legal Department help in doing that.

“We never reviewed the ‘statements of substantial interest’ for county commissioners so I am unaware of whether commissioners have reported such membership in the past,” Pepoon wrote in a separate email to The Eagle. “I certainly haven’t heard of such reporting if it has been done. Having said that, the language of the statute would indicate that all of the commissioners certainly need to review what non-profit boards they serve on and amend their ‘statements of substantial interest’ to reflect such membership.”

Commissioners rush to file

Commissioner David Dennis did that on Friday morning, adding to his form the Sedgwick County Zoological Society, which runs the county zoo; the South Central Kansas Transportation Coalition, which advocates for local road funding; and the Wichita Area Metropolitan Planning Organization, an intergovernmental association dealing with planning and economic development issues.

He said he chairs WAMPO and serves in the Transportation Coalition to try to ensure Sedgwick County gets its fair share of regional funding, and on the zoo board to protect the county’s multi-million-dollar investments there.

He said it’s the same thing with Cruse’s membership on the TKAAM board.

“TKAAM, we provide them (about) $179,000 a year, we have ever since I’ve been on the board,” he said. “In addition to that, we give them a building, utilities free, upkeep of the building. I think we need somebody on that board if we’re going to make sure they’re spending that money wisely.”

Commissioner Sarah Lopez said she plans to update her disclosure form on Monday to include board memberships.

Lopez, the newest member of the commission who took office early this year, said she and her treasurer called the Kansas Governmental Ethics Commission when they filled out the forms for her 2020 campaign.

She said they were explicit about putting down any income-generating positions but silent on unpaid boards.

“I think there was some kind of disconnect there,” she said.

When she ran for office, she was on the board of HealthCore, a low-income clinic serving north Wichita, and the south central Kansas chapter of Equality Kansas, an advocacy group pressing for LGBTQ+ rights.

She said she didn’t disclose those board memberships at the time because she didn’t know she needed to.

Since joining the commission, she’s also joined the board of Exploration Place and, along with Howell, has been asked to join the reboot of the Hispanic Chamber of Commerce, which she said she’ll disclose when the board forms in October.

The main takeaway from last week’s ethics training, Lopez said, was that commissioners have to be more cautious about recusing themselves when dealing with federal money, which is governed by stricter rules than the state’s.

“When it comes to the federal dollars that are coming in, like the ARPA (American Rescue Plan Act) or CARES (Coronavirus Aid, Relief, and Economic Security Act), I know that’s where they (BKD) were saying because of the federal guidelines that go along with that, we should recuse ourselves or definitely not participate in helping them get any of that money,” she said. “Because obviously as we sit on boards, I mean, we want to advocate for those boards, but we have to make sure we’re doing it in a way that’s going to be fair to everyone else.”

She said she expects Healthcore to ask for ARPA money, but will limit her involvement to telling them who to contact on the county staff to apply, as she would for any constituent.

“But when it comes to county funds, it’s always been done where people on the (county) board have been able to advocate for the boards that they sit on, unless the board writes you a check behind the scenes,” she said. “Of course that’s something that I’ve never seen. Of course, I haven’t been here that long.”