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

Lt. Gov. Jeff Colyer, left, and Governor Sam Brownback celebrate after winning re-election at a Kansas Republican Party gathering, Tuesday, Nov. 4, 2014, at the Capitol Plaza Hotel in Topeka. To the right of Brownback is his wife Mary Brownback.

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.

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 campaign followed all applicable laws and ethics regulations and this investigation has no merit,” Brownback’s press secretary Eileen Hawley said in a statement Thursday afternoon. “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.”

“Governor Brownback’s focus is on doing the people’s work, preparing a budget and an agenda for the upcoming legislative session.”

The U.S. attorney’s office declined comment.

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.

But Senate Democratic Leader Anthony Hensley of Topeka said the grand jury probe casts “a dark cloud over the process” just days before Brownback is to be inaugurated for his second term.

“Gov. Brownback and his people have a lot of explaining to do,” Hensley said in a statement Thursday afernoon. “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.”

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.

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.

The Brownback campaign filed its final disclosure report Thursday afternoon. It shows the campaign repaid $400,000 of the final loan from Colyer on Nov. 21, leaving $100,000 of that loan still outstanding. It also showed the full balance of $200,000 of Brownback’s own loan to the campaign is still outstanding.

Colyer also refused during the campaign 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.”