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UPDATE: Reed Fearful of ‘Side Money’ In Mayoral Race

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ST. LOUIS (KMOX) - In the race for mayor, there is a large sum of money that Mayor Slay helped raise for a ballot issue two years ago, and now Slay’s challenger – Aldermanic President Lewis Reed – is questioning whether the money is finding its way into the mayor’s race.

Reed is worried about the $160,000 that was left over from the save-the-earnings-tax campaign Slay backed. In the spring of 2011, the fund, Citizens For a Stronger St. Louis, was converted into a not-for-profit fund. Reed questions how it’s being used now.

“In this case, part of what the Slay campaign could be doing with this money is paying people off the books,” Reed said, “They could be paying people cash transactions. They could be doing nearly anything.”

Slay’s campaign manager Richard Callow says none of the money has been converted to the Slay campaign.

Managing the Citizens for a Stronger St. Louis fund from the start, Slay’s legal counsel, attorney Brad Ketcher was adamant that not one dime of the money has been spent on the mayor’s race.

“This campaign (Citizens for a Stronger St. Louis) has been involved in no politics whatsoever, no candidate activity, no ballot measure activity. It’s been politics neutral,” Ketcher said.

After the ballot measure to save the earnings tax was successful in the spring of 2011, Ketcher says letters were sent out to donors offering to return their money. A “substantial” amount of the $160,000 was returned, he says. Ketcher says another $40,000 was spent about a year ago for a sustainability conference. More money, he says, has been spent on “neighborhood banners.”

When asked to estimate the current balance of the fund, Ketcher said there’s about $30,000 to $35,000 in the account.

To show how the money was spent, Ketcher released to KMOX a copy of  Citizen’s for a Stronger St. Louis’ IRS statement. Read the full statement here.

But Reed’s campaign manager Glenn Burleigh says the IRS document is a red herring, showing financial data only on the earlier save-the-earnings-tax campaign fund, not from the later not-for-profit.

“They are trying to cloud the waters between two separate legal entities,” Burleigh said, “I have never been in a campaign before where somebody opens a not-for-profit and just transfers money into it.  They need to open the checkbook and show the public how the money has been spent.”

Burleigh also questions why the not-for-profit has failed to file documents with the state of Missouri.

Ketcher admits his group is late in filing paperwork with the Missouri Secretary of State’s office. But he claims the nature of the filing has nothing to do with how the money is being spent.

“The only issue we have with the secretary of state’s office is we need to update our annual filing with them,” Ketcher said, “It’s not a financial filing. It’s simply who’s your board of directors, what’s the address, who’s your registered agent, those sort of things. And we’re in the process of doing that now. That was an oversight as we moved to a not for profit.”

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