House speaker opens records in bid to end controversy about his Missouri Freedom Alliance LLC
This article first appeared in the St. Louis Beacon, Sept. 16, 2013: With the legislative veto session over, Missouri House Speaker Tim Jones is hoping to put to rest another controversy he admits was largely self-inflicted.
To that end, he said he literally is putting all of his cards on the table.
Jones, R-Eureka, provided the Beacon with exclusive access to the documents – including bank statements, client summaries, fee agreements and court filings – that pertain to his 2007 formation of a limited liability corporation, the Missouri Freedom Alliance.
Jones did so in hopes of quelling a controversy over his political and professional ethics, fueled by his initial explanation of the Alliance’s purpose to a Kansas City Star reporter.
"I truly did misspeak," Jones said, when he initially stated that he used the firm to offer "basic, rudimentary, Legislature 101 advice.”
Jones swiftly sought to correct his comment, which he said “just popped into my head” while he was talking on a cell phone with the reporter and walking between events at a political conference.
But Jones' subsequent explanations did not tamp down the talk.
Possible private practice
The Missouri Freedom Alliance, said Jones, has nothing to do with politics. Rather, it was set up as “a safe harbor” when it looked like the law firm where he worked – and where he now is a partner – might go out of business.
“I do not do political consulting. I do not do lobbying. I do not work on campaigns, except for free,” Jones said in a detailed interview in his office. On the table before him, Jones laid out what he said were all the documents pertaining to the Alliance and the legal cases that have been funneled through it.
The Alliance’s name, he insisted, had nothing to do with its purpose – to serve as an entity for legal work in case he had to open up a solo legal practice.
Jones said he came up with the name because he liked the way it sounded. He observed with a chuckle that perhaps he might have been better off to have named it simply “Tim Jones LLC.”
Jones said he was an English major in college and likes to be creative.
According to the documents viewed by the Beacon, the Alliance was set up in August 2007. At that time, said Jones, the firm now called Doster Ullom had been hit hard by the recession and was shedding lawyers and staff. Over a short period of time, the firm reduced its number of attorneys by 75 percent, he said.
In 2007, Jones also was completing his first year in the Missouri House. Like all Missouri legislators, he receives less than $40,000 a year in his legislative post. Most state lawmakers also have other fulltime jobs.
Jones said he took a substantial paycut from his law firm when he became a legislator, because he was spending less time practicing law and more time in state government.
With the Doster firm in flux, Jones said that he felt in 2007 that he needed to set up some sort of corporate entity as a backstop so he could continue to earn money practicing law.
The Alliance LLC, he said, was designed to be the base for any independent legal business he acquired on his own, especially if the law firm closed.
By 2010, the financial situation at Doster settled down, and Jones said he ended up using Alliance for only a few cases. All were referred to another lawyer because Jones was busy with other legal and legislative duties.
Cases were non-political
The documents provided by Jones show that the Alliance served as a pass-through for six legal cases from 2007-09.
All but one were mundane: An accountant suing a business partner, a traffic ticket, an injured construction worker, a contractor disputing worker classifications, a childcare business needing a cease-and-desist letter sent to a former employee.
(The Beacon agreed not to identify the clients, but was able to see the names and verify that none involved people with any connection to Missouri state government.)
The legal fees paid by the clients ranged from $62 to just under $5,000. All the cases were referred to another lawyer, Paul Rechenberg, who conducted the bulk of the legal work and received most of the fees the clients paid. Jones said his own share was usually no more than 25 percent.
Rechenberg, in private practice in St. Louis County, confirmed the arrangement in an interview. He said Jones’ share of the fees varied, depending on how much involvement he had in each case.
Jones and Rechenberg said that referrals are a common legal practice, and that all six of the clients were aware of Rechenberg’s involvement.
The biggest case was a medical negligence case filed in 2009, but not settled until 2012. That case, which involved a kidney transplant, was settled for about $60,000 in legal fees. The payments were staggered, most of it going to the referred lawyer and the Doster Ullom firm.
Missouri Ethics Commission records show that Jones received about $1,000 from the Alliance in 2012, which he said was entirely from his share of the settlement of the 2009 medical case.
Commission records show that Jones reported no income from the Alliance in 2010 or 2011. He said that’s because he took on no more cases that involved using the Alliance as a pass-through for his legal business.
Practice solely within Doster Ullom
The slimmed-down firm of Doster Ullom is now “on solid footing” financially, Jones said, so all of his legal practice is now handled through the firm. And Doster does have files on the six cases handled through the Alliance, he said.
As of late August, the Missouri Freedom Alliance LLC had a bank balance of $525 – roughly the minimum amount needed so Jones doesn’t have to pay a monthly bank fee.
In any case, Jones said he plans to close down that bank account – and get rid of the Missouri Freedom Alliance LLC – because he doesn’t need it anymore. It’s also not worth the political headache.
Jones is considering a bid for Missouri attorney general in 2016. But whether he does or doesn’t seek higher office, the speaker said he recognized that he needed to publicly clarify the situation regarding the Alliance and his income-related activities outside of the speaker's office.
“I want people to know that I’ve been engaged in nothing more than the private practice of law,” Jones said.
Not everyone buys his explanation. "Something smells,'' said Sean Nicholson, executive director of Progress Missouri, a progressive advocacy group that has been outspoken in its criticism and questions about Jones' creation of the Missouri Freedom Alliance.
If the Alliance's role was as straightforward as the records that Jones provided indicate, Nicholson said, "then why didn't he give a straight answer the first time? It doesn't add up."
Jones said he realizes that not everyone will accept his explanation that he was distracted and not thinking clearly when he made his first, inaccurate comment about the Alliance.
But Jones contended that he allowed the Beacon to review the Alliance's documents because he isn't trying to hide anything. "No one is going to step forward'' and challenge his account, Jones said, because he is telling the truth.
That said, the speaker added that he recognized that the controversy remains largely his own fault "because I personally made an incorrect statement.”
Correcting critics' perceptions is difficult, he concluded, because "it's hard to prove a negative."