Commissioner Michael O’Donnell’s wire fraud, money laundering trial starts Monday
Editor’s note: An earlier version of this article misstated Michael O’Donnell’s level of study when he was taught by Russell Arben Fox at Friends University.
Sedgwick County Commissioner Michael O’Donnell goes on trial this week on federal money laundering and wire fraud charges alleging he gave thousands of dollars in campaign donations to friends who did little or no work on his campaign — and then took back some of the cash for himself.
At issue is not whether O’Donnell cut 23 checks worth more than $10,000 to three friends and then deposited at least $2,000 into his own personal checking account. Bank records show those transactions took place.
It’s O’Donnell’s intent in doing so — whether he “knowingly and intentionally” did it to defraud the public like prosecutors contend or whether it was, at worst, nothing more than a routine campaign finance violation.
The fact that the case is even going to trial is unusual.
More than 90 percent of federal criminal cases never reach a jury, according to www.uscourts.gov, because the defendant enters a guilty plea, often the result of a plea bargain.
O’Donnell had been in plea talks with the government, according to court records. But for some reason, they stalled on Feb. 4. Attorneys didn’t say why.
O’Donnell’s jury trial gets underway Monday before U.S. District Judge Eric Melgren. It’s expected to last five days.
Depending on the outcome it could end O’Donnell’s political career or make him a symbol of federal overreach.
The commissioner is charged with 23 counts of wire fraud and three counts of money laundering — all felonies.
He has pleaded not guilty and remains free on a $5,000 unsecured bond.
O’Donnell, a former Wichita city councilman and son of a Baptist preacher, continues to serve in his latest elected role — commissioner of Sedgwick County’s 2nd district, covering southwest Wichita, Haysville and Clearwater — as the federal criminal case plays out. Prior to his 2016 election to the county commission, O’Donnell served as a state senator.
Despite some calls for his resignation, O’Donnell has signaled no intent to leave political office.
As The Eagle as previously reported, if O’Donnell is convicted of a felony and doesn’t resign, it would likely fall to Sedgwick County District Attorney Marc Bennett as the local prosecutor to decide whether to start proceedings to oust him from office.
Bennett declined a request from The Eagle to be interviewed for this story.
The charges
A federal grand jury indicted O’Donnell last May. He is accused of taking $10,500 in donor money meant to fund his bids for state senate and county commissioner and, over the course of several months in 2015 and 2016, giving it to three of his friends who did little or no work on his campaigns. In January 2016, within a few days of writing two of the 23 checks, records show O’Donnell deposited their face value — $2,000 total — into his personal checking account at Intrust Bank.
All of the checks in question were drawn on the “Michael for Kansas” and “Michael for Sedgwick County” campaign accounts kept at Sunflower Bank and Vintage Bank, respectively.
Campaign finance law bars candidates from using donations for expenses not directly tied to their runs for public office, like a spouse’s travel costs or gifts for friends. They’re also prohibiting from using it to pay personal expenses, like utility and mortgage bills.
In a hearing in August, one of his defense attorneys, Mark Schoenhofer, argued unsuccessfully for the indictment’s dismissal, saying the federal government has no business prosecuting violations that are normally resolved on a state level.
At most, he said, O’Donnell should face either a fine from the Kansas Governmental Ethics Commission, or misdemeanor prosecution under Kansas laws. In a written motion he called the charges “inappropriate and extreme” and said O’Donnell’s treatment “stands in stark contrast to the treatment of candidates in other notable Kansas campaign finance violations cases.”
Schoenhofer did not return messages from The Eagle seeking comment.
U.S. Attorney Stephen McAllister responded that “public corruption has always been a concern of the federal government” and that the feds are sometimes “in a superior position” to deal with it than state and local authorities, according to a transcript of the hearing. Federal wire fraud and money laundering statutes are clear, he added.
The judge ultimately refused to throw out the case, saying federal prosecutors have the discretion to file charges if they think federal laws were violated, even if state laws might also apply to a case.
When it comes to cases of alleged public corruption, federal prosecutors sometimes pursue cases because “they think they have a more objective viewpoint” than state or local authorities, said Charley O’Hara, a Wichita defense attorney.
“It’s kind of up to the prosecuting authorities and what they want to emphasize. The federal court has a lot of discretion in the kind of cases it wants to pick up,” said O’Hara, who isn’t involved in O’Donnell’s case but agreed to speak generally about federal criminal court.
A case like O’Donnell’s “isn’t something we see every day” in federal court.
“They fact that they picked up a case (means) they probably have a reason for it,” he said, adding that defendants have a presumption of innocence.
“Federal court is much more serious than state court. Sometimes they make an example of people.”
What to expect at trial
Court records indicate prosecutors plan to lay out their case against O’Donnell by calling a series of witnesses — including the three friends to whom O’Donnell cut the questionable checks and his mother, Peggy O’Donnell — and by showing jurors bank and other records that document the transactions.
They also might show jurors the state finance reports they say O’Donnell falsified to cover up the illegal spending and a deposit slip for the $2,000 he put into his personal checking account
O’Donnell’s witness list includes the three friends, as well as Carol Williams, who headed the Kansas Governmental Ethics Commission during O’Donnell’s campaigns; movie theater owner Bill Warren; and former Sedgwick County Commissioner David Unruh, who served with O’Donnell.
Court filings suggest that Williams could be key to O’Donnell’s defense.
Among topics she may testify about if called to the witness stand are campaign practices, including how workers are compensated. Court filings also say she’ll testify that campaign staff compensation is “highly subjective and not easily valued” and that O’Donnell’s payments to his friends “are examples of campaign staffing activity and compensation and consistent with accepted practice.”
Williams, according to the affidavit doesn’t recall the U.S. Attorney’s Office ever asking to prosecute a case — nor does she recall referring one to federal prosecutors.
Political future?
Regardless of the outcome of this week’s trial, O’Donnell’s political future might be at risk, said Russell Arben Fox, a political science professor at Friends University who taught O’Donnell in one undergraduate class.
Fox said a conviction on any or all of the charges doesn’t necessarily mean that O’Donnell will be forced to resign or keep him from continuing his political career in some other office.
But it could sour voters enough to cost him the next election.
And while O’Donnell has friends in the Republican party who might chalk up any mistakes to youthful ambition, they won’t necessarily be able to guarantee his political future if he’s acquitted “because they also have to deal with the image voters at large have of him.”
“The fact of the matter is that Michael already has a rather divisive reputation — not just amongst Wichita area voters in general but Wichita area Republicans,” Fox said, adding that “there’s going to be a lot of pressure within the Republican party for him to retreat from public life.”
“He’s in a good place in that he’s in a job and is the incumbent,” Fox said. “It just depends on his ability to win the election following this trial.”
This story was originally published February 25, 2019 at 5:00 AM.
