Crime & Courts

County Commissioner Michael O'Donnell indicted on bank, wire fraud and money laundering

Michael O’Donnell, now a member of the Sedgwick County Commission, was a state senator when his phone conversations were monitored in 2015.
Michael O’Donnell, now a member of the Sedgwick County Commission, was a state senator when his phone conversations were monitored in 2015. File photo

Sedgwick County Commissioner Michael O'Donnell has been indicted on federal charges of money laundering, bank fraud and wire fraud.

Charges unsealed Friday morning include five counts of wire fraud, five counts of bank fraud and two counts of money laundering.

The charges, originally filed under seal on April 25, relate to his successful campaign for the state Senate seat.

O’Donnell’s attorney, Mark Schoenhofer, said Friday: “We’re investigating the accusations at this point. That’s all they are is accusations. And we intend to dig in, look at what the government has by way of evidence, and Michael maintains his innocence.”

O'Donnell did not return phone calls Friday morning. Reached Thursday evening, O'Donnell declined to comment about the federal investigation.

The basic allegations against O'Donnell, 33, are that he converted campaign funds to his personal use and/or gave money from his campaign account to friends for non-campaign-related purposes.

The indictment also charges that he filed false reports to the Kansas Governmental Ethics Commission seeking to cover up the illegal payments. According to the U.S. Attorney's Office, the indictment says that O’Donnell provided false information in five reports he emailed to the state ethics commission in 2016 and 2017.

The grand jury indictment cites $10,500 in questionable transactions involving about two dozen checks.

The case falls under federal jurisdiction because the banks where the alleged illegal dealings occurred are federally insured and the campaign spending reports were sent to Topeka by Gmail, meaning they would have had to have crossed state lines to a Google server and back.

Sedgwick County Commissioner Richard Ranzau, who had been openly critical of fellow commissioner Michael O'Donnell during public meetings, reacts to the news that O'Donnell has been indicted in federal court on bank and wire fraud charges.

Fellow County Commissioner Richard Ranzau immediately called on O'Donnell to resign from the County Commission.

When asked if O’Donnell will resign, Schoenhofer said: “I doubt it. I haven’t talked to him about it, but my belief is he’ll probably continue serving the people of Sedgwick County.”

Sedgwick County District Attorney Marc Bennett confirmed that under state law, an elected official who is indicted is not required to resign. In a statement summarizing the law, Bennett said, "if an elected official is convicted of a crime or committed misconduct while in office, the District Attorney or Attorney General can initiate ouster proceedings against the elected official ... If the elected official is removed from office or voluntarily resigns, the political party to which the elected official belongs then chooses the successor to serve the balance of the unfinished term."

Federal investigation

The first indication of a federal investigation involving O'Donnell came in February of last year.

Several members of the Wichita Eagle staff received letters from the Justice Department informing them that their phone conversations with O'Donnell had been intercepted by investigators.

Those letters came simultaneously with notifications that the federal government had also tapped the cellphones of several Wichita businessmen said to be in connection with an investigation into gambling.

The assistant U.S. attorneys prosecuting O’Donnell are the same prosecuting cases involving illegal gambling. The indictment unsealed on Friday does not mention gambling, and nothing in the indictment ties O’Donnell to the ongoing federal investigation into gambling.

Sedgwick County Commissioner Michael O’Donnell says he was shocked and puzzled to find out that his phone had been wiretapped by the FBI. (video by Dion Lefler / Feb. 15, 2017)

The allegations

According to a news release by the U.S. Attorney's Office, "At issue are a series of transactions that the indictment alleges O’Donnell falsely represented as payments made for campaign-related expenses. "

The release goes on to give these details:

A $1,000 check O’Donnell wrote from his “Michael for Kansas” campaign account to a person identified as C.R. The indictment alleges that after C.R. cashed the check, O’Donnell deposited the $1,000 into his personal checking account.

A $1,000 check O’Donnell wrote from his “Michael for Kansas” campaign account to a person identified as J.D. After receiving the check, J.D. allegedly wrote a $1,000 personal check to O’Donnell and O’Donnell deposited the $1,000 check into his personal account.

A total of 12 checks from the “Michael for Kansas” campaign account O’Donnell wrote to a friend identified as D.J., totaling $5,650.

Three checks O’Donnell wrote from his “Michael for Sedgwick County” account to D.J. totaling $750.

Six checks O’Donnell wrote from his “Michael for Kansas” account to a friend identified as J.M. totaling $2,100.

A rising star

O'Donnell has been a rising star in Kansas Republican politics, but has had his share of trouble along the way.

His career as an officeholder began in 2011, when, at age 26, he won a City Council seat representing southwest Wichita.

The following year, he was on the state ballot, part of an effort by Republican conservatives to purge the party of moderate legislators who clashed with Gov. Sam Brownback on taxes and education.

O'Donnell defeated three-term incumbent Jean Schodorf, then the chairwoman of the Education Committee and a moderate, in a Republican primary for a state Senate seat in west Wichita.

In the general election, O'Donnell faced Democrat Tim Snow, whose campaign was crippled by revelations that he'd been prosecuted in Morris County on charges of writing bad checks and driving under the influence, and repeatedly sued over unpaid debts and taxes.

O'Donnell didn't wait to finish his first Senate term before running for a seat on the Sedgwick County Commission. The job is perceived as a step up from the Legislature because it's full-time, pays better and it's easier to get things done as one of five commissioners instead of one of 40 senators.

He took on longtime incumbent and former Haysville Mayor Tim Norton, the only Democrat on the commission and won in a narrow victory.

Sedgwick County Commissioner Richard Ranzau accused commissioner Michael O'Donnell of lying to the public while discussing whether to restore a job for a community health surveyor.

Since the wiretaps became public, Ranzau has been critical of O'Donnell. With the indictment, Ranzau issued this statement:

"Mr. O'Donnell's time in elective office has been over shadowed by investigations and questionable judgment. I have been deeply troubled by Mr. O'Donnell's repeated efforts to use his position to help his friends and campaign contributors. This is why I have opposed and spoken out against his actions on numerous occasions. In light of Mr. O'Donnell's indictment, I call on him to resign immediately so the Commission can begin to rebuild trust with our community."

The most recent blowup between the two came in late February, when Ranzau tried to deny O'Donnell a seat on the board that runs Wichita Area Technical College.

"I think we all know there's an ongoing FBI investigation that hangs over this commission like a dark cloud," Ranzau said at the time. "I think until that's resolved, and for a variety of other reasons, that it would be in the best interest of this commission not to appoint Commissioner O'Donnell to this board, or any other board for that matter."

The other commissioners disagreed and O'Donnell was appointed to the board on a 4-1 vote.

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