Kansas House speaker representing businesses, groups suing state over budget move last year

Top Kan. lawmaker is lawyer in suit against state

TOPEKA, Kan. — Kansas’ House speaker is representing insurance funds, businesses and trade groups in a lawsuit challenging a financial maneuver used by the state last year to help erase a budget shortfall.

Some of Speaker Mike O’Neal’s fellow legislators said Wednesday that it’s improper for the Hutchinson Republican to be lead attorney in the lawsuit. It was filed Jan. 21 in Shawnee County District Court, with O’Neal signing the petition for 17 clients.

O’Neal said state law permits lawmaker-lawyers to file lawsuits for clients to challenge a statute approved by the Legislature. O’Neal argued last year that the state couldn’t constitutionally take the action his clients now seek to overturn.

The lawsuit challenges the Legislature’s decision to confiscate unused funds in various accounts set aside for specific regulatory purposes and divert them to general government programs, such as education and social services. O’Neal’s clients paid fees deposited in special accounts that had $5 million swept out of them.

“This is one example of government overreaching, and it needs to stop,” O’Neal said during an interview. “If guys like me can’t stop it, then government has gotten too powerful.”

Democratic leaders in the House and Senate were critical. Senate Minority Leader Anthony Hensley, a Topeka Democrat, accused O’Neal of using his office to “drum up legal work.”

“I think what he’s done in this case is very inappropriate and, if not illegal, certainly unethical,” Hensley said.

O’Neal said the first plaintiff in the case, the Kansas Building Industry Workers Compensation Fund, is a longtime client of his law firm and had asked about challenging the Legislature’s action.

Other plaintiffs include the Kansas Bankers Association, the Kansas Realtors Association and Galt Ventures of Kansas, a Wichita loan company that does business as Speedy Cash.

The defendant is the Department of Administration division that handled the movement of funds from various accounts.

O’Neal said that if any of his clients are directly affected by legislation before the House, he’ll consider abstaining on a case-by-case basis.

Carol Williams, executive director of the Kansas Governmental Ethics Commission, said she’s not sure any state ethics law covers O’Neal’s situation.

O’Neal cited one law that prevents a legislator from representing someone in court to attack a statute’s validity — unless that legislator voted against it and formally protested at the time. O’Neal did both last year with the budget legislation.

“We are a citizen Legislature, and we should have the access to citizens’ justice,” said Rep. Scott Schwab, an Olathe Republican.

O’Neal’s lawsuit argues that sweeping the accounts represents imposing an unauthorized tax on the businesses and individuals paying into those accounts. It also argues that the state exceeded its powers to police various businesses and professions.

But most of the talk about the lawsuit Wednesday at the Statehouse centered on O’Neal’s role, rather than the legal arguments behind it.

“Now is the time for us to work together and not the time to start suing each other,” said Beth Martino, spokeswoman for Gov. Mark Parkinson.

Some legislators noted O’Neal has been a vocal critic of Kansas school districts suing the state over education funding. Districts were successful in forcing legislators to increase state aid with a 1999 lawsuit, and more than 70 recently asked the Kansas Supreme Court to reopen that case.

At least a few counties are considering joining in O’Neal’s lawsuit. But O’Neal noted its current plaintiffs are using private funds to finance the litigation — not taxpayer dollars, as school districts did.

However, Sen. John Vratil, a Leawood Republican and an attorney said, “The public isn’t going to buy into those subtleties.”

The case is Kansas Building Industry Workers Compensation Fund, et. al., v. State of Kansas, Department of Administration, Division of Accounts and Reports, No. 10C 000083.

On the Net:

Kansas Legislature: www.kslegislature.org.

Shawnee County District Court: www.shawneecourt.org