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TUESDAY, MAY 31, 2011 Part 1

CITY HAUL

Indicted mayor used small St. Louis suburb for an epic corruption spree:feds

BY SARAH RYLEY

KINLOCH, Mo. — He might just be America’s most corrupt mayor.

Sure, Keith Conway may only have run tiny Kinloch — a cash-starved municipality of 298 people outside St. Louis — but according to federal charges, public records and multiple sources, the extent to which Conway has fleeced city coffers and abused his office would make some fallen big-city mayors look like angels.

Last week, the 47-year-old was hauled out of Kinloch’s City Hall in handcuffs and indicted on federal charges that he used the city debit card to ring up more than $20,500 in personal expenses since 2009. The funds allegedly went to mortgage payments for his condo time share in Palm Beach Shores, Fla., plane tickets to Florida and Las Vegas, expenses incurred on a Caribbean cruise, income taxes, and even his electric bill.

The Daily had earlier launched its own investigation, visiting Kinloch in April and uncovering an even deeper pattern of corruption. It appeared that Conway, a sometime R&B singer and nightclub impresario, lorded over Kinloch as if it were his own personal fiefdom since rising to the office as a write-in candidate in 1999.

The Daily probe revealed that Conway had doled out city property to his inner circle, created a secret city account to which only he had access and allegedly blocked police from arresting his shady associates and took kickbacks from a chop shop operating behind City Hall and the Police Department.

Conway shouldn’t even have been eligible to be re-elected mayor last April — he won 100 percent of the 14 votes cast — because he still owed $437 in personal property taxes, according to county records.

Last week, Conway pleaded not guilty to wire fraud and federal program theft in federal court in St. Louis. But St. Louis County Police Chief Tim Fitch said those charges are just the beginning.

“There’s still multiple investigations under way involving multiple city employees and officials,” said Fitch. Up to 25 employees and officials work for the city.

Law enforcement sources told The Daily that another FBI investigation involves the chop shop on city property. The mayor allegedly took daily $1,500 payoffs for every truckload of scrap parts that left the shop. County police raided the garage in April and found at least one stolen vehicle.

When Robert Hill, one of the alleged operators of the scheme, was arrested four weeks later for an outstanding domestic assault warrant, a law enforcement source said he pleaded with the arresting officer. “But I work with the chief and the mayor every day ... I gotta pay the mayor tonight!” The chief, Michael Morris, did not return calls for comment.

Hill had the mayor on the phone even before he was booked, and was carrying $1,500 in cash.

Sources told The Daily that Conway routinely blocked Kinloch police from arresting his friends and family members, several of whom have been arrested for dealing drugs. One childhood friend of Conway’s, Byron Wright, was found by county police in 2008 with a safe containing crack, powdered cocaine and $22,000 in cash.

As Wright was getting ready to start legal proceedings, which ultimately resulted in a 10-year prison sentence, property records show that Conway used $70,000 of city money to buy the drug felon’s house, which Conway then declared “the mayor’s house.” Wright acquired the house from the city in 2007 for just $6,000.

City Attorney Donnell Smith said the municipality should have drafted legislation authorizing the purchase of a house for the mayor — a highly unusual extravagance for a city of Kinloch’s size.

“I’m surprised that the city would have $70,000 to buy anything,” said Felicia Pulliam-Jones, the city’s economic development director.

Conway’s purchase points to a larger pattern of malfeasance and misappropriation of funds that may result in Kinloch being dissolved and either becoming part of a neighboring town or dissolving into St. Louis County — a sad prospect for Missouri’s oldest incorporated black community.

Kinloch, like many other municipalities, is facing a serious financial crisis. City budget documents show $918,750 in municipal expenses for this fiscal year — including $592,000 in salaries alone — on projected revenue of just $466,000. Last Friday, the municipality was unable to pay its employees, Smith said. He added that Conway opened a city account with U.S. Bank to which only Conway had access.

In order to cover budget shortfalls, Conway has been creative with government funding. An analysis by The Daily estimates that at least $1.3 million earmarked for municipal improvements was used to cover other gaps in city spending.

Smith said all of the funds the city takes in are given to the mayor, “and then allegedly deposited by the mayor. I only say ‘allegedly’ because I have reason to believe, based on what people have said, that they have not always been deposited.”

Kinloch has not submitted a legally mandated budget to Missouri state auditors since 2006.

Meanwhile, the fire department is so broke that its non-emergency phone service was cut last summer because of $1,271 in outstanding bills, and its brand-new engine was nearly repossessed in April because the department couldn’t afford a $2,200 insurance payment.

“I never knew they had that type of money,” fumed Kinloch Fire Chief Darren Kelley after the indictment. His all-volunteer firefighting crew passes time on bare mattresses in a ramshackle TV room, while police officers are asked to buy their own flashlights and bulletproof vests.

“The police don’t have no budget,” said Assistant Police Chief O.D. Donaldson. “We ain’t got no insurance, can’t get repairs on our vehicles ... we are really struggling.”

In addition to misappropriating funds, Conway also has played fast and loose with municipal properties.

In 2002, when the archbishop of St. Louis donated a former church in Kinloch’s historic district, it was done with the agreement that the building would be turned into a museum or learning center. Instead, Conway leased the church to an entertainment group run by friends, who resurrected the Cotton Club, a popular nightclub he owned in the 1990s. Conway reportedly used $200,000 in municipal improvement funds to pave a 150-car parking lot in a dirt patch across the street.

Conway also currently earns income from an entertainment company he owns a stake in, said his attorney, Andrew Hale. The Daily confirmed that this income was not listed on his financial affidavit submitted after last week’s indictment, which is a federal offense.

Another business that Conway is associated with is the Boom Boom Room, a “members-only social club” that lacks a liquor license and is known for running drugs and prostitutes, and features local hip-hop acts. The club is run by two of the mayor’s relatives.

Law enforcement officials said Conway forbids police from stepping inside the nightclub.

But protection from the law isn’t the only thing Conway’s inner circle benefits from. Back in 2007, Conway sold at least seven modest ranch homes that the city bought back from the airport to Kinloch officials and their friends and families.

“It’s all relatives, aldermen, whoever he chooses,” said a former city official, who was ousted over demands to review city finances.

Smith said the sales process by Conway was “totally improper” because the homes weren’t advertised in a newspaper, and there were no criteria for selecting the buyers.

Alderwoman Betty McCray was sold one for $9,000. Conway’s sister, Kena Conway, was given another for $8,000, even though she had a $10,412 lien filed against her the previous year.

In 2001, Conway raffled a free house that was owned by the city. His cousin, Otis Hughes, happened to win. Another Conway relative, a rapper named Baby Huey, lives there, too.

The city transferred an income-generating, 54-unit public housing complex to the Kinloch Community Development Association, a nonprofit controlled by top city officials.

The association, which owns at least 90 properties, owes $71,000 in unpaid property taxes, said the county tax assessor. It has not filed with the IRS since 2007, even though its assets clearly exceed $25,000.

Perhaps Conway’s most questionable action involves the 550-acre NorthPark commercial development that would span Kinloch and two neighboring towns.

In 2005, NorthPark promised each of the three towns a lump-sum payment toward municipal improvements as long as they detailed how they would spend it.

But a vague “expenditure report” — which the city sent to the county and contained no dollar amounts — reported that only one of six proposed municipal improvement projects was completed after the city had received $2.3 million of NorthPark’s funds. The Daily estimates that at least $1.3 million was used to cover budget shortfalls.

“It’s disingenuous to say you’re going to use it for one thing and then do something else with it,” said Smith.

Before Conway’s arrest, The Daily toured Kinloch with the mayor in a Crown Victoria he co-opted from the police department. The mayor accused St. Louis County of purposefully starving his impoverished city of funds so it would be forced to dissolve.

“This is rich land,” Conway said as he cruised through Kinloch’s mostly vacant acres, pocked with rubble and burnt-out frames. Many Kinloch residents believe the county wants the town disincorporated so it can reap millions from developing land near the adjacent Lambert-St. Louis International Airport.

But when questioned about how his office was spending money, the mayor repeatedly dodged requests for documentation of his expenses, and ignored repeated Sunshine Law requests. On one occasion, Conway even ran out the back door of City Hall before an appointment.

Smith said the city is already drafting new rules to stamp out further corruption.

But with Klinoch’s finances in turmoil and more arrests of city officials possibly on the way, residents could have no other choice but to vote on whether to maintain their city’s independence, become an unincorporated part of the county, or be absorbed by neighboring Berkeley or Ferguson.

As for Conway, immediately after his indictment, he violated a court order barring him from speaking with city employees when he demanded a key to City Hall from an alderman, then made copies of a packet of documents that he distributed to city officials.

U.S. Attorney Hal Goldsmith, of the Eastern District of Missouri, blasted Conway’s actions: “His attempt to coach these witnesses as to what they should say relative to the allegations ... is anything but subtle.”

Conway also attached a handwritten note to the packet saying that it’s important “that we stick together or they will bring all of us down and the city with it.”

The mayor claimed in the missive that his salary was only $21,295 a year, and argued that he spent “money owed to me by the city” because he had not received six years of vacation pay.

“You approved this because of all my hard work to the city,” he wrote.

NOWHERE TO HIDE

Tressel is the latest to learn the cover-up is worse than the crime

DAN WOLKEN

The final scoreboard will say Jim Tressel was a dirty coach, and maybe he was. When the drumbeat of a widening investigation chases a coach out of a job where he won seven Big Ten championships, a national title and 83 percent of his games, it is the natural and perhaps only judgment for history to render.

But what brought down Tressel yesterday, what finally dislodged a highly successful coach from one of the top-five college sports jobs in America, was mostly a crime of omission. And with the see-no-evil culture of Ohio State’s football operation now a massive story still rolling downhill, he’s probably only the first to go.

There was no other way this could end for Tressel; not after the Columbus Dispatch recently uncovered a full-blown paper trail of emails from April 2010 proving he knew a number of his players were selling Ohio State memorabilia to the owner of a tattoo parlor, who was under federal investigation for drug trafficking.

“I will get on it ASAP,” Tressel wrote to the informant on April 2, 2010, eight months before Ohio State actually did anything about it and more than a year before the school decided to take it seriously.

Which, of course, is the real lesson here.

Ohio State isn’t going to go through years of upheaval — including possibly severe NCAA sanctions and a change in leadership that should include athletic director Gene Smith and school president Gordon Gee – because of obscene violations. Nobody has accused Ohio State of buying players or fixing grades.

But if nothing else has been learned in college sports this year — first with the firing of Tennessee’s Bruce Pearl and now Tressel — is that when violations land on your lap, covering them up is a one-way ticket to unemployment.

When Tressel first learned his players might have committed NCAA violations last spring, it would have been easy enough to avoid calamity. Had he simply informed Ohio State’s compliance office his players were selling memorabilia in exchange for free tattoos, the school would have reported secondary violations and some players may have faced suspensions. But the program, more or less, would have gone on without much interruption.

The culture of the “hook-up” is pervasive on practically every major campus, and there’s not much anybody can do to stop it. College athletes at elite programs like Ohio State are, by and large, both famous and poor. When they eat dinner at a restaurant and the bill never comes, it’s not reasonable to expect them to demand it. Would you?

Depending on the sport, the campus and the city, all kinds of hook-ups exist for athletes. Restaurants, clubs, department stores, apartment complexes, even car dealerships can be complicit in violating NCAA rules. Often, there’s nothing the school can do about it.

But by failing to seriously acknowledge the evidence of a widespread issue, Ohio State invited everybody to take a look at how deep it ran in Columbus. One after the other, the revelations turned into huge headlines. The Columbus Dispatch reported that one car dealer had sold nearly 50 cars to Ohio State athletes over a four-year period. Last week, former Ohio State wide receiver Ray Small told the school’s student paper The Lantern that “you’re going to get a deal every which way.” It goes on everywhere, but the digging at Ohio State was never going to end.

And ultimately, in this case, the system worked.

The entire enterprise of NCAA enforcement is built on self-reporting. The NCAA can only investigate a fraction of the violations happening all over the country, and proving them is another thing entirely. The only deterrent to breaking rules is making the penalties so severe that it’s not worth the risk.

When Pearl lied to NCAA investigators last year over an illegal barbecue at his home — he failed to identify a photo of himself with a recruit in his kitchen, a minor violation — he wrote his own coaching obituary. When Tressel sat on information that his players had committed violations so that they’d stay eligible and help him win the Big Ten last year, he put everything at risk.

Once the FBI informed Ohio State administrators of the memorabilia issue, a strong athletic director and an honorable school president would have done a thorough investigation to short-circuit any potential bombshells. At minimum, they would have looked through their own coach’s emails.

Instead, Smith and Gee concluded before the Sugar Bowl last December that the issue was “isolated,” in Smith’s words, to five players who would be suspended for the first part of the 2011 season.

Now, the only thing isolated about this story is that Tressel is the first to lose his job. He shouldn’t be the last.

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A Visit to an Arctic Ice Station

Two months ago, Reuters photographer Lucas Jackson was invited to the 2011 Applied Physics Laboratory Ice Station, a temporary camp built out of plywood on Arctic sea ice. Far north of Prudhoe Bay, Alaska, the camp housed a couple dozen members of the British, Canadian, and U.S. navies and employees of the Applied Physics Laboratory. Jackson spent two days at the camp, watching its residents conduct tests on underwater and under-ice communications and sonar technologies. He kept his camera equipment warm and functional with chemical hand warmers whenever possible. Collected here are some chilly images from Jackson's trip to the far north last March.

1 The moon rises over Arctic ice near the 2011 Applied Physics Laboratory Ice Station north of Prudhoe Bay, Alaska, on March 18, 2011. (Reuters/Lucas Jackson)

2 Equipment packed for an assignment to the Arctic, arranged on a table in the living room of Reuters photographer Lucas Jackson, in New York, on March 16, 2011. (Reuters/Lucas Jackson)

3 A pilot uses GPS coordinates to plot a course to the 2011 Applied Physics Laboratory Ice Station north of Prudhoe Bay, Alaska, in this March 18, 2011 picture. (Reuters/Lucas Jackson)

4 A road and the Trans Alaska Pipeline run past a mountain in northern Alaska, on March 17, 2011. (Reuters/Lucas Jackson)

5 Steam rises from seawater through a crack in the Arctic ice near the 2011 Applied Physics Laboratory Ice Station north of Prudhoe Bay, Alaska, on March 18, 2011. (Reuters/Lucas Jackson)

6 Buildings making up the 2011 Applied Physics Laboratory Ice Station, on Arctic ice north of Prudhoe Bay, Alaska, on March 18, 2011. (Reuters/Lucas Jackson)

7 The sun sets over Arctic ice near the 2011 Applied Physics Laboratory Ice Station in this March 18, 2011 picture. (Reuters/Lucas Jackson)

8 A helicopter moves a remote warming station near the 2011 Applied Physics Laboratory Ice Station, on March 18, 2011. (Reuters/Lucas Jackson)

9 A man walks towards snow machines past the plywood hutches and tents that make up the Applied Physics Lab Ice Station, on March 18, 2011. (Reuters/Lucas Jackson)

10 Applied Physics Laboratory Ice Station (APLIS) employee Hector Castillo, near the 2011 APLS camp north of Prudhoe Bay, Alaska, on March 18, 2011. (Reuters/Lucas Jackson)

11 A man carries an ice auger to a remote warming station near the 2011 Applied Physics Laboratory Ice Station, on March 18, 2011. (Reuters/Lucas Jackson)