Fee office reform plan sparks debate

Reps. Mark Wright of Springfield, Ryan Silvey of Kansas City and Jim Lembke, Charles Portwood and Jim Avery of St. Louis County unveiled a reform plan July 10 that will end more than 50 years of what they call immoral political patronage.

Missouri governors have long awarded control of many of the state’s fee offices, places where people get driver’s licenses and car tags, to political supporters. The Department of Revenue, which has oversight of the privately run fee offices, directly operated some locations until last year, when newly elected Gov. Blunt privatized the last 11 state-run offices, which were losing $2.5 million a year.

Now, Wright and his colleagues want to reform the current system by giving fee offices solely to nonprofit groups, such as chambers of commerce and local government entities. Thirty-seven of the fee offices are already run by nonprofit groups. Fifteen are run by chambers of commerce, including the one in Branson.

Wright, who is running for state auditor, said the group plans to craft their reform bill before the legislature convenes in January.

DOR: No need

Blunt spokesman Spence Jackson didn’t return phone calls seeking the governor’s reaction to the legislators’ reform plan.

But DOR spokeswoman Maura Browning said Blunt improved the system last year and there is no need to change it.

“We required people to submit business plans, (and) we required them to pay for things that other administrations have never required them to pay for,” said Browning, who was hired by Department Director Trish Vincent, a Blunt appointee.

The plan comes at a time when the FBI is reportedly investigating Blunt’s handling of the fee offices. In April, the Kansas City Star broke a story on the FBI’s involvement, and the Associated Press and St. Louis Post-Dispatch have published similar articles. In May, a U.S. Attorney spokeswoman in Arkansas alluded to an investigation during an interview with Springfield Business Journal.

Critics such as Jack Cardetti, Missouri Democratic Party spokesman, say Blunt may have formed third-party management companies to operate fee offices. Those umbrella companies, critics allege, may have illegally funneled proceeds through mysterious channels back to Blunt or Blunt’s associates.

Cardetti is in favor of the Republican legislators’ reform plan.

Wright said he hasn’t seen proof of an FBI investigation, and the FBI won’t confirm it. Wright declined further comment on the matter, although his group calls for a ban on third-party management companies.

Wright ultimately wants to change public opinion of the fee offices.

“It’s this public perception that if you’re good friends with the governor or if you give a lot of money to the governor, then you, too, can get rich off the backs of the taxpayers,” Wright said. “That system is morally wrong. This is what gives politicians a bad name.”

State high in Springfield

Ben Newhouse, a Springfield financial adviser and attorney, worked on Blunt’s political campaigns before he was awarded one of three Springfield fee offices, 1534 S. Glenstone Ave.

He said the proposed reforms are well-intentioned but impractical. It would be a mistake to strip the fee office system of its capitalistic edge, he said.

“Anytime you add more bureaucracy, especially to a process that by its nature is bureaucratic,” Newhouse said, “it’s just going to slow down service. Because we’re privately operated right now, we have the ability to change our procedures very quickly to accommodate customer needs.”

Fellow Springfield fee agent Leslie Carter is in a unique position. She runs three offices – 149 Park Central Square, 3061 S. Fremont Ave. and 103 E. Church St. in Ozark. No one else in the state runs more than one, according to the DOR’s database.

Leslie Carter’s husband, Tom Carter, is a registered lobbyist with the Missouri Ethics Commission and has known the Blunt family for more than 20 years. He has been a paid fund-raiser for the governor’s father, U.S. Rep. Roy Blunt, though Leslie Carter said he isn’t currently on Congressman Blunt’s payroll. Leslie Carter also was co-coordinator in Christian County for Blunt’s gubernatorial campaign.

Leslie Carter said there’s nothing wrong with her running three fee offices or her family’s connection to the Blunts.

“The key is providing customer service,” she said. “I really try to focus on that as the issue.”

According to DOR records, Carter’s downtown Springfield fee office recorded a state-high $980,638 in transaction fees during fiscal 2005, which ended June 30, 2005. However, that office was state-run for 11 months of FY 05, during which time it generated $21.59 million in revenues.

DOR’s Browning said the Park Central Square office can no longer generate nearly $1 million in transaction fees for Carter or anyone else because it now must compete with the other two Springfield locations, which both opened last year.

“We have argued for a long time that these offices are not nearly as lucrative as people make them out to be,” said Browning, adding that the statewide average revenue per office was $178,637 in FY 2005.

Contract agents cover their own operating expenses and receive $2.50 to $10 per transaction through a state contract with DOR.

Fee Office Reform

Among the legislators’ proposals:

• Award contracts solely to 501(c)3 or 501c(6) organizations or local government

• Eliminate involvement of third-party management companies

• Cap office salaries at $100,000 a year

• Give state auditor power to audit offices annually[[In-content Ad]]