Monopoly Boy

Marc Conklin gazes out the courtroom’s third-story window, at the American flags flapping in the fall breeze. Conklin, the 43-year-old chief administrative officer of the Kansas City Board of Public Utilities, glances down at North Seventh Street to the entrance of the Wyandotte County Courthouse. An hour earlier, a judge unsealed two 57-count indictments alleging that Conklin and Rodney L. Turner, a 68-year-old lawyer, had stolen more than $400,000 from the water and electric company.

Conklin, stout with spiky, graying hair, is minutes away from being fingerprinted and photographed. He’ll be released on a $25,000 bond. So will Turner, who served as a Wyandotte County counselor in the 1980s.

Wyandotte County District Attorney Jerome Gorman alleges that when Conklin was the BPU’s general counsel, Conklin knowingly approved payment of phony bills for legal services that Turner had submitted between September 1, 2003, and April 30, 2008. Gorman wouldn’t say whether Conklin and Turner split the money.

“All we’re saying is there was a claim presented that’s not right, and that claim was allowed knowing that it wasn’t right,” Gorman said at an October 3 press conference. As a result, he said, the BPU was missing more than $400,000. “We’re alleging that money was taken, and that they had no right to take that money.”

A statute of limitations allowed Gorman to charge Conklin and Turner only for submitting false legal bills within the last five years.

But The Pitch has obtained invoices submitted by Turner from 2000 through the indictments. The bills show that the BPU paid Turner $59,321 in 2003 (for the months prior to those included in the indictments) as well as $81,000 in 2002, $72,103 in 2001 and $58,979 in 2000.

If the allegations are true, the indictments are the beginning of the end of a surging career that made Conklin one of the most powerful players at the utility. Conklin served as the utility’s general counsel for 10 years and also managed the human resources department until his promotion to chief administrative officer. Conklin was in line to succeed Don Gray as the next general manager of the BPU, according to a former manager at the utility.

The BPU provides electricity to 65,000 customers and water to 51,000, in Kansas City, Kansas. The utility is essentially a monopoly, owned by ratepayers with no other choice than doing business with the BPU.

The lobby of the BPU building at Minnesota Avenue and North Sixth Street in downtown Kansas City, Kansas, is often full of people struggling to pay their water and electric bills. But the utility company is run by a close network of associates living large off those same ratepayers.

In November 2006, The Pitch exposed Conklin’s excessive spending on his utility-issued credit card. Conklin and other managers had spent about $15,000 on food, drinks and tickets to sporting events in Kansas and Missouri. A review of BPU managers’ use of the cards from January 2004 to September 2006 found that Conklin, BPU General Manager Leon Daggett (who was fired from the BPU in December 2005 and is now director of Independence Power & Light) and lobbyist Joe Dick had spent thousands of dollars on lunches at the Savoy Grill and the Cigar Box in downtown Kansas City, Missouri (“Lunch Money” November 30, 2006). None of Conklin’s receipts detailed his purchases, only how much he spent. But Conklin didn’t have to worry about any punishment for abusing the company credit cards. According to BPU policy, Conklin was the one in charge of investigating abuse of the cards and determining the disciplinary action. Turner’s name showed up on many of those receipts as Conklin’s lunch buddy.

In January 2007, the tab for the spending spree went before the utility’s ethics commission, whose members found that Conklin and other high-ranking BPU officials had abused company credit cards. The commission sent a letter to the BPU on January 11 of that year, citing “significant abuses” of policies and procedures. The commission members were troubled by “the failure of senior staff” — including Conklin — “to strictly adhere to procurement card policies and procedures and the lack of oversight by the board and administration.”

Now, after a six-month grand jury investigation and its indictments against Conklin and Turner, Chief Judge R. Wayne Lampson of the Wyandotte County District Court has requested that a judge from outside the county deal with the BPU case because the ties that bind Wyandotte County’s power players are so interwoven.

Senior District Judge Jack Lively of Montgomery County presided over the October 3 hearing and will eventually oversee a trial. Lively initially unsealed the grand jury’s recommendations but resealed them after deciding that they might hurt Conklin’s and Turner’s chances of a fair trial.

Conklin and Turner both entered pleas of not guilty. Conklin’s attorneys — former U.S. Attorney Todd Graves and Nathan Garrett — spoke of Conklin as a lifelong resident of Kansas, an attorney of 18 years and a father of two young sons.

Turner, wearing round glasses and a black suit with a blue dress shirt, approached the defense table with his attorney, James L. Eisenbrandt. Turner had spent most of the hearing fidgeting, locking his fingers and twiddling his thumbs. Eisenbrandt revealed that Turner had known about the investigation since spring 2008 and that Turner’s relationship with the BPU ended in April 2008. Eisenbrandt painted Turner as a retiree who has lived in Wyandotte County since 1957, a husband, a father of two adult sons, a former Marine, and a longtime lawyer in the county.

T.J. Reardon, a Wyandotte County citizen-agitator and failed BPU board candidate, watched from the back of the courtroom. It was Reardon’s petition that had initiated the grand jury investigation. Later, Reardon called the indictments “the tip of the iceberg.”

Neither Conklin nor Turner spoke after the hearing. They walked silently to the elevators. Their attorneys passed out prepared statements to the press. Graves’ statement described Conklin as “a loyal and dedicated employee.” Eisenbrandt’s statement called Turner “a respected lawyer.” And, they said, both look forward to the “full disclosure of the facts” coming out.

That won’t happen anytime soon. A trial is at least six months away.

Marc Conklin loves the Board of Public Utilities. Who wouldn’t love an annual salary of $160,104, a $12,000 yearly vehicle and expense allowance, 100-percent-paid medical benefits including dental and vision? Who wouldn’t love the ability to practice law on the side while using the BPU’s property to do so? Who wouldn’t love getting life insurance paid at double his salary and a pension plan in which the employer contributes 5.5 percent of the employee’s salary? It’s a pretty sweet gig.

No wonder Conklin was gushing at the February 20, 2008, board meeting. Conklin was known for kissing up to the utility’s elected board members and General Manager Don Gray.

According to the meeting minutes, Conklin told the board that he was “darn lucky to work at BPU.”

Conklin talked about his two young sons and his parents. He said he wanted to be a good father, husband and son. Conklin told a story about visiting his parents in Florida and stumbling across a book called Top Performance. He had bought several copies of the book and written “BPU” above the title. He gave each of the board members a copy.

Conklin told the board that the BPU had given him “great opportunities,” that he “loves the place,” that Gray and then-Chief Administrative Officer Carl Wolfe had allowed him “to do a lot of things … which are not typical for what lawyers do,” and he appreciated that opportunity.

The timing of this suck-up session was notable: It was two weeks before a grand jury began investigating Conklin and the utility.

If Gray knew that Conklin was under investigation, it didn’t stop him from promoting Conklin to chief administrative officer a couple of months later. Gray congratulated Conklin at the board’s April 16 meeting, according to the minutes. Gray talked about working closely with Conklin and said there were “exciting things in the near horizon that they’re both going to be working together on.”

With the promotion, Conklin vacated his previous posts but kept his contract and received a fat raise. His former positions are still vacant.

Conklin’s tenure with the BPU began in 1998, when Hal Walker, the Unified Government’s chief counsel, assigned Conklin to the BPU as staff attorney. In September 2001, then-BPU General Manager Daggett hired Conklin as the utility’s general counsel. Daggett, Walker and Unified Government County Administrator Dennis Hays signed off on the deal.

In October 2004, the utility named Conklin the acting manager of human resources. The position became permanent on August 4, 2005. Conklin told The Kansas City Star that he wouldn’t be legal counsel for long, but he never gave up the job.

Conklin’s new contract held him to a different standard from the BPU’s rank-and-file employees. Its language appears to exempt him from following the BPU’s employee handbook or ethics policy: “Employee shall not be subject to any terms or conditions of employment or other policy, rule or requirement.”

Conklin, meanwhile, had a long history with Turner.

Conklin had been a part-time associate county counselor working for Turner, who was county counselor before the city and county governments unified, according to Gorman.

During the time that he was approving Turner’s allegedly phony legal receipts for the BPU, Conklin also had outside business interests with Turner. Conklin and Turner are still in business together, according to one of their associates.

Conklin and Turner, along with Patrick L. Scherzer and Tom Enright, own stakes in three companies: Kansas Cottonwood Investors, a real-estate development company building homes in Basehor, Kansas; HPD Development, the Basehor real-estate development owned by Kansas Cottonwood Investors; and TSE Group, an investment group. Kansas Cottonwood Investors was started in February 2003, and annual reports list Conklin as an owner of the group until 2006. Enright says Conklin still has an ownership stake in the group.

“Yeah, he’s still on the hook financially for this lousy market that we’re in,” Enright tells The Pitch. “If this thing were to go south, Conklin’s on the hook for a whole lot of money because he signed as the guarantor.” Enright says their company’s loan for the Basehor housing development is “maybe $2.5 million.”

Enright says Conklin served as the attorney for Kansas Cottonwood, handling all of the paperwork and negotiations with landowners. “He got sweat equity,” Enright says, meaning that in exchange for legal services, Conklin received an ownership stake without having to put in money up-front.

Conklin and Turner are also part owners of TSE Group, an investment group started in August 2005. Enright is also a partner in TSE, along with Scherzer and David Spehar, a banker in Kansas City, Kansas. Conklin is listed as the resident agent of TSE, a “forfeited” company with the Kansas Secretary of State’s Office. Enright describes TSE as “kind of active in that there are one or two investments that are still out there, but on a daily basis, no.”

Enright says TSE has no relationship with Kansas Cottonwood Investors and HPD Development.

But there is a relationship between the BPU and Conklin’s business associates.

As general counsel for the BPU, Conklin hired Turner with the approval of Walker. Turner didn’t have a contract with the utility but provided “legal and consulting services on an hourly basis.” The BPU paid Turner $150 per hour.

And in May 2002, Conklin, in his role as general counsel at the BPU, signed a letter agreeing to pay Scherzer — Conklin’s and Turner’s partner in all three outside companies — $100 an hour plus expenses for “professional consulting services” provided to the BPU.

Scherzer earns commissions for buying insurance on behalf of the utility. Scherzer, a county commissioner in the mid-1970s and ’80s and a kingpin in Wyandotte County’s Democratic machine, is the broker of record for several of the utility’s insurance policies. Scherzer’s company, Metroplex Insurance, “also provides consulting services to BPU concerning benefits, liability, reviews of engineering reporting, and maintains contacts with BPU’s several insurance carriers,” according to the BPU.

When The Pitch placed a call to the number listed for Scherzer in WhitePages.com, it rang in the office of Gray. A BPU secretary answered a follow-up call. “That’s weird,” she said, when told the number was listed as Scherzer’s. She said Scherzer doesn’t have an office at the BPU. “It’s got to be a mess-up…. You’re the first person who’s ever called here wanting them [Scherzer’s Metropolex Insurance].”

Scherzer scoffed when The Pitch asked him if he’d talk about Kansas Cottonwood Investors. “Oh, no,” Scherzer said. “I’m not interested in talking to you.”

Conklin’s outside business deals with BPU consultants Turner and Scherzer aren’t clearly conflicts of interest as broadly defined by the BPU’s employee handbook. The manual simply says it is the utility’s “practice” that employees “avoid placing themselves in a position of conflict of interest with any present BPU responsibilities.” Employees are “discouraged,” rather than prohibited, “from accepting additional employment opportunities that may present a conflict of interest.”

It’s not clear whether Conklin revealed to BPU management that he was in business with Turner and Scherzer. But Conklin’s professional responsibility as an attorney would have required him to disclose any potential conflict.

If he was involved in a conflict of interest or an ethics policy violation, Conklin appeared to be covering for himself in March 2008 when he chose one of his business associates as the utility’s new ethics administrator. Conklin served on an interview panel that ended up choosing Spehar (one of Conklin’s partners in TSE Group) as the new ethics administrator.

No one seemed to mind that Spehar had co-owned a company with Conklin as late as April 2007. The board minutes read: “The panel decided that Mr. Spehar had the most ethical and financial experience being in the banking industry, addressing the business side of ethical behavior. Also, Mr. Spehar possessed over twenty-five years of leadership within the community and had a great deal of experience in other areas within the community. Mr. Spehar had a vision for the future of the BPU’s ethics administration for present and future opportunities.”

Gray submitted Spehar’s name to the board of directors, which voted to approve Spehar. However, Spehar never officially accepted the position. And the BPU doesn’t appear to be in a rush to fill it. Seven months later, the ethics administrator post is still open.

Two days before its chief administrative officer was indicted on 57 counts of stealing from the company, the BPU’s board of directors gathered for its regular meeting on October 1.

Conklin was conspicuously absent. A few unusual faces were there — a couple of local lawyers, a damage-control consultant and a public-relations flack — but the meeting was a typical, insomnia-curing hour.

Board member Mark Jones didn’t bother to feign interest in the August financials or pretend to earn the $950 monthly stipend ratepayers hand him. Like a preteen girl, Jones couldn’t stop playing with his cell phone.

Board member Mary Gonzales and board President Loretta Colombel looked especially annoyed with Jones’ indifference at the public meeting. Finally, Gonzales and Colombel passed a note to Bob Milan, who read it, underlined a message and slipped it under Jones’ eyes.

Jones finally shut his flip phone. But in a failed attempt to be sneaky, Jones held his phone under the table while presumably reading or sending text messages.

Three years ago, Wyandotte County voters re-elected Jones. He and his five fellow board members are in charge of a nearly $300 million budget and two coal-fired power plants. Jones has served those voters by rarely speaking at board meetings.

Conklin’s business partners have helped keep Jones on the board by dumping thousands of dollars into his campaigns. Enright and Spehar have each given Jones at least three $500 maximum contributions since 2003. Jones also received a pair of maximum contributions from Scherzer’s wife and insurance company in March 2005. In July 2006, Scherzer contributed $200 to Jones’ re-election bid. Neal Austin Lindblad, a partner in Kansas Cottonwood Investors and HPD Development, also gave a maximum contribution to Jones in February 2005.

Jones isn’t the only BPU board member who has accepted campaign contributions from Conklin’s associates. Scherzer’s Metroplex Insurance contributed $500 to Colombel in 2005. Enright and Spehar each gave $500 contributions to Terry Eidson in his 2007 bid to join the board.

And Conklin and Turner both gave $500 maximum contributions to board Vice President Bob Milan in 2007. Milan also received $500 from Conklin in 2003.

The board members’ October 1 meeting eventually adjourned to an executive session to discuss a legal matter — a last-minute addition to the agenda. If the executive session was about Conklin, it didn’t really matter. The board couldn’t fire him. They couldn’t even stop paying him.

Conklin doesn’t answer to the board. Conklin’s contract says he reports to Walker, the Unified Government’s chief counsel. Conklin’s agreement with the BPU allowed him to hire Turner to do legal work for the utility. All he needed was Walker’s blessing. “The BPU and UG agree that all decisions concerning the outsourcing of legal work to outside counsel are subject to the review and approval of the UG Chief Counsel,” reads a clause in Conklin’s contract.

And Turner was not in the habit of detailing what legal work he did for the BPU, according to invoices obtained by The Pitch. Rather than listing specific cases or issues he was working on, the bills merely showed the number of hours Turner supposedly worked and his fee. Conklin’s signature approving the payments appears on many of the statements.

The BPU’s only official comment after Conklin’s indictment was an October 3 joint statement from Gray and Colombel.

“Following legal filings announced today by the district attorney, and in the best interests of the utility and our employee, the BPU’s Director of Administration has been placed on a leave of absence,” the statement read. “To protect the integrity of the judicial process involving that litigation, we will make no further comment regarding the district attorney’s filings.”

The statement didn’t mention that Conklin is still collecting his $160,104 salary.

E-mail justin.kendall@pitch.com or call 816-218-6778

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