Gov. Blunt's administration cleared in investigation of license contracts

JEFFERSON CITY, Mo. -- Gov. Matt Blunt's administration was cleared of wrongdoing in the awarding of Missouri license office contracts as a federal prosecutor said Wednesday that he had closed an investigation without pursuing any criminal charges.

The investigation into the awarding of licenses offices under Blunt's administration had been widely reported though not officially confirmed until federal prosecutor Bud Cummins of Little Rock, Ark., took the somewhat unusual step of doing so.

"In light of that unfortunate disclosure and the publicity it spawned, it is appropriate to confirm certain facts," Cummins said in a written statement.

"First, the matter has been closed with no indictments sought or returned," he said. "Second, at no time was Governor Blunt a target, subject, or witness in the investigation, nor was he implicated in any allegation being investigated."

Missouri has 183 privately run offices that collect vehicle sales taxes and issue vehicle and driver's licenses on behalf of the state. The offices commonly are referred to as "fee offices," because the contractors get to keep a fee for each transaction. They long have been political patronage plums that governors award to supporters.

Changes in 2005

Blunt, a Republican, took office in January 2005 after 12 years of Democratic governors and replaced many of the fee office agents. He also privatized 11 previously state-run license offices, created one new office and required all the licenses offices to extend their working hours and submit business plans to the state.

Another new trend also emerged. Instead of running their license offices themselves, some fee office agents contracted with third parties to manage the offices.

The Associated Press reported in April that FBI agents had conducted interviews with former state license contractors about how the offices are managed. One former fee office agent told the AP at the time that she had been questioned by the FBI about the third-party management efforts, among other things.

Blunt's administration had maintained it had no role in whether its license office contractors chose to hire third-party managers, some of whom had been his political supporters.

Blunt spokesman Spence Jackson praised Wednesday's announcement by the U.S. attorney.

"This affirms what we've said all along -- that we have overseen this process with integrity and a clear focus on providing good customer service and reducing cost to taxpayers," Jackson said.

No one in Blunt's administration ever was contacted by federal or state authorities regarding the investigation, Jackson said.

Cummins said such inquiries "are not uncommon" but -- unlike this one -- generally are able to be conducted in secrecy to protect both the investigation and the presumption of innocence.

He said the investigation into Missouri's license offices was assigned to his office in January 2006 after the U.S. attorney in St. Louis recused. He did not indicate why the recusal occurred. The St. Louis office is overseen by federal prosecutor Catherine Hanaway, a former Republican state House speaker who served in the Legislature with Blunt and ran unsuccessfully for secretary of state in 2004. A Hanaway spokeswoman declined to comment Wednesday about the recusal.

The Missouri Republican Party claimed Wednesday that the investigation had been driven by Democrats and hyped by the media.

"The Democrats were spreading wild lies and accusations regarding the administration's awarding of fee offices, which likely prompted a routine investigation, which the media inappropriately was made aware," said Republican Party executive director Jared Craighead, a former Blunt staff member. "Today, the U.S. attorney stated there was no merit to those claims."

The Missouri Democratic Party denied assertions it had fueled the inquiry, which it said was damaging even though investigators found no illegal activities.

"Matt Blunt's actions have not only brought about a federal investigation, they have disgraced his office and given our government a black eye," said Democratic spokesman Jack Cardetti. "There may not be anyone from the Blunt administration going to federal prison, but the fact that there was a federal investigation speaks volumes about how Governor Blunt was running the state."