JEFFERSON CITY - The FBI is joining the state auditor in an investigation into a state insurance company after the company donated thousands of dollars to political campaigns. The state created Missouri Employers Mutual Insurance Company with public funds in 1993 to provide workers' compensation coverage to small businesses.
After two employees were indicted last year, State Auditor Tom Schweich began an audit of the company. In addition to the indictments, thousands of dollars in campaign contributions and hundreds of thousands of dollars of employee perks are also being investigated.
Schweich said the company claimed it was a private entity and should not be subject to state regulations. The company also does not think they have to keep all records open under the state's Sunshine Law, which requires government agencies to provide certain records to the public.
"MEM says they are not a public governmental or quasi-government entity; they believe they are entitled to spend the money how they want," Schweich said.
He also said it is necessary for the Missouri General Assembly to figure out whether the company is public or private to decide.
"For public employees you can't get incentive payments, so if this falls in the public realm any incentive payments would've been inappropriate and that's something we want the legislature to take a look at," Schweich said.
Schweich says by using government funds, the company has always been at an advantage.
"The status of MEM is that it enjoys a federal tax exempt status and has avoided paying approximately $50 million in federal tax," Schweich said.
Political contributions to the Democratic Party totaling $8,000 triggered an FBI investigation.
The state's audit found the company spent excessively on employee perks, some of which include:
Schweich said these perks are something public company employees don't receive and this amount of spending would be inappropriate for a private company.
Since the FBI investigation is still underway some details of the audit were not made public, including which candidates received political donations.
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