The head of Missouri’s medical marijuana program testified under oath that a grand jury subpoena his agency received late last year was likely connected to an FBI investigation in Independence.
The revelation by Lyndall Fraker, director of medical marijuana regulation at the Missouri Department of Health and Seniors Services, is the first indication of the target of the federal subpoena.
In November 2019, the Missouri Department of Health and Senior Services received the subpoena, which was issued by the United States District Court for the Western District. It demanded the agency turn over all records pertaining to four medical marijuana license applications.
The copy of the subpoena that was made public redacted the identity of the four applicants at the request of the FBI.
The department was given until Jan. 7, 2020, to turn over to the grand jury any records in its possession about the applications. Two days later the state legislature convened, and in the weeks that followed, FBI agents began interviewing lawmakers, lobbyists and staff about medical marijuana.
Fraker was asked about the subpoena during an October deposition that took place as part of a lawsuit challenging a medical marijuana license denial.
Fraker testified that while he didn’t handle the subpoena, he believes it pertained to a “facility in Kansas City, the City of Independence, or something. People that were involved over there in another situation and if they were involved in an application of a facility or something like that.”
He said he doesn’t have a “great recollection” about the details of the subpoena, only that it wasn’t directed at the agency itself.
“They were just needing information from us for a situation that had come up over there,” he said.
A spokeswoman for the Department of Health and Senior Services said “there’s nothing additional we can provide” when asked to clarify Fraker’s testimony.
The FBI said through a spokeswoman that it could neither confirm nor deny the existence of an investigation. The same goes for the U.S. Attorney’s office for the Western District of Missouri, which added that federal law requires grand jury investigations remain confidential.
Late last year, the FBI began questioning local officials in Independence about a pair of utility contracts issued by the city council in 2017.
One contract called for the city to pay a St. Louis company $9.75 million to tear down a power plant that Independence Power and Light was no longer using. The bid was more than twice that of the other bidder.
The other contract called for the city to pay nearly $1 million to purchase the former Rockwood Golf Club in order to build a solar farm in a joint venture with Gardner Capital, a Springfield private equity firm.
Days before the vote to purchase the property, PACs funded by Gardner made four $2,500 donations to Independence Mayor Eileen Weir, who has vehemently denied the donations were connected to her vote to endorse the project.
In March, the city received a grand jury subpoena seeking records of non-public meetings of the Independence City Council and a records request from the FBI for minutes of specific council meetings.
In May, the FBI asked for receipts submitted by four members of the Independence City Council for reimbursement.
In June, the FBI asked the city to provide coordinate maps of neighborhood boundaries within city council districts.
In addition to the utility contracts, the FBI apparently took interest in a zoning regulation approved last year by the city pertaining to marijuana dispensaries.
The council voted to exceed the restrictions imposed by the state, sparking a lawsuit. The council ultimately voted to rescind the restrictions earlier this year.
The Kansas City Star reported earlier this year that before the zoning ordinance was rescinded, FBI agents questioned at least one marijuana advocate about whether there were any “ringleaders” on the council pushing the restrictions.
One person who appears connected to each of the lines of FBI inquiry is Steve Tilley, a lobbyist and longtime friend and adviser to Gov. Mike Parson.
Tilley’s firm lobbies on behalf of Independence Power and Light and Gardner Capital, and is connected to the PACs that donated to Weir. Additionally, he has a longstanding relationship with the St. Louis company that won the contract to tear down the decommissioned power plant, and has numerous clients in the medical marijuana business.
Tilley did not respond to a request for comment.
‘Quid pro quo’
It’s been more than a year since the FBI began interviewing local officials in Independence and around the state. But it is impossible to know how far along any investigation may be, if it’s still ongoing or even what direction it is heading, said Luke Hunt, a former FBI agent who teaches jurisprudence and criminal law at the University of Alabama.
“There is generally no firm timetable in which an investigation must be completed,” he said.
It’s also possible that any inquiry that was underway may have paused because of the election, said Daniel Richman, a former federal prosecutor who teaches law at Columbia University.
“Federal enforcers will indeed try to avoid public moves in corruption cases — or other matters relating to a candidate — on the eve of elections,” he said.
These types of investigations take time, Richman said, and often “run out of steam in the face of legal proof demands that the available evidence won’t support.”
“Federal courts, guided by the Supreme Court, have increasingly demanded clear evidence of a quid pro quo — not a mere conflict of interest,” he said. “And that corrupt bargain has to be in relation to an official act, not just the privileged access.”
But it’s also true, Richman said, that “signing up and debriefing cooperators takes time and occurs quietly.”