Jason Kander today called on Rep. Shane Schoeller to explain to Missourians how his family business’s ownership of the Nixa fee office at the same time he was serving in the legislature does not violate Missouri’s conflict of interest laws.
The Schoeller Group managed the fee office in Nixa from 2006 until 2010. According to publicly available documents, The Schoeller Group continued to manage the Nixa fee office after Representative Schoeller was sworn into office in 2007, which appears to violate RSMO 105.456. When the process of awarding fee offices was opened up to competition instead of cronysim, The Schoeller Group lost the contract.
“Shane Schoeller may have violated Missouri law by serving in the legislature at the same time his family operated a no-bid fee office for the state,” said Rep. Jason Kander. “From all the publicly available documents, it appears that The Schoeller Group improperly managed the Nixa fee office from 2007-2010. I am calling on Representative Schoeller to release all of the documents relating to the fee office so Missourians can determine if The Schoeller Group’s management of the fee office violated state law.”
The Schoeller Group L.L.C., which was founded by Representative Schoeller and is now owned by his wife, Mendie Giles Schoeller, was awarded the Nixa Contract Office by Governor Matt Blunt - Schoeller's former boss - without a competitive bidding process in 2005. Representative Schoeller ran for and won a seat in the Missouri General Assembly in 2006, entering office on January 3, 2007.
State law (below) prohibits members of the Missouri General Assembly or their spouses from performing any service for the state that pays $1,500 a year or more unless it is part of a publicly bid contract and the legislator or their spouse was the lowest bidder. This prohibition also applies to businesses where the member or spouse own more than ten percent of the company.
As a result, on the day Representative Schoeller became a member of the Missouri House of Representatives, all of the relevant factual predicates for application of Section 105.456.2 were met:1) Shane Schoeller was a member of the General Assembly.
2) His spouse, Mendie Giles Schoeller, owned more than 10% interest in The Schoeller Group L.L.C.
3) The Schoeller Group L.L.C. provided services to the state (operated the Nixa Fee Office) for consideration in excess of $1,500 per year.
4) The contract to operate the Nixa Fee Office was awarded without the benefit of a competitive procurement process.
Timeline of Events
October 14, 2003: Shane Schoeller files Articles of Organization with the Secretary of State’s office to start The Schoeller Group, L.L.C.
March 17, 2005: Department of Revenue informs Mendie Schoeller that she has been tentatively selected as the Contract Agent for the Nixa Fee Office.
April 12, 2005: Mendie Schoeller submits business plan for operation of Nixa Fee Office.
April 13, 2005: The Schoeller Group L.L.C.’s registered agent is changed from Shane Schoeller to Mendie Schoeller. In The Schoeller Group’s bid to keep the office in 2010, Mendie Schoeller wrote “In April 2005, sole ownership was transferred to Mendie Giles Schoeller…" No public record exists suggesting the Schoellers have separated or divorced, making this distinction meaningless as a practical matter.
January 3, 2007: Shane Schoeller is sworn in as a State Representative, making section 105.456.2 applicable to both him and his spouse, Mendie Schoeller. As of this date, because they received the Nixa Fee Office without the benefit of a competitive bid, it became illegal for Shane Schoeller, his spouse, or their LLC to continue to operate the office.
January 3, 2007 – January 6, 2010: The Schoeller Group L.L.C. operates the Nixa Contract Office in violation of section 105.456.2. In this time period, the Nixa Office processed approximately 184,298 transactions worth $612,101 in processing fees, which exceeds the $1,500 per year allowed by section 105.456.2.
January 7, 2010: Department of Revenue announces Alternative Opportunities, Inc. won the competitive bid for the Nixa office. The Schoeller Group was the only other bidder for the office.
Chapter 105
Public Officers and Employees--Miscellaneous Provisions Section 105.456
Prohibited acts by members of general assembly and statewide elected officials, exceptions. 2. No sole proprietorship, partnership, joint venture, or corporation in which a member of the general assembly, governor, lieutenant governor, attorney general, secretary of state, state treasurer, state auditor or spouse of such official is the sole proprietor, a partner having more than a ten percent partnership interest, or a coparticipant or owner of in excess of ten percent of the outstanding shares of any class of stock, shall:
(1) Perform any service for the state or any political subdivision thereof or any agency of the state or political subdivision for any consideration in excess of five hundred dollars per transaction or one thousand five hundred dollars per annum unless the transaction is made pursuant to an award on a contract let or sale made after public notice and competitive bidding, provided that the bid or offer accepted is the lowest received.
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