Michael O'Donnell Found Not Guilty On 21 Wire Fraud Charges; Jury Hung On Remaining Counts

Mar 4, 2019

Sedgwick County Commissioner and former state Sen. Michael O’Donnell was found not guilty in federal court today of 21 counts of wire fraud related to campaign payments.

O’Donnell said he was “relieved” with the verdict.

“I’m very happy with the results,” he said as he left the courthouse with his attorney, Joshua Ney. “I’ve never broken any laws.”

After several hours of deliberation, the jury said it couldn’t come to an agreement on five other charges, including two for wire fraud and three for money laundering.

Judge Eric Melgren said it’s up to prosecutors to decide whether they want to retry O’Donnell on those charges. U.S. Attorney for Kansas Stephen McAllister said in a statement after the verdict was announced that his office is "evaluating whether to take the case to trial again" for the five charges the jury couldn't agree on.

O’Donnell, a Republican, was charged with 26 counts last year after federal investigators looked into his campaign finance reports. Prosecutors said O’Donnell misused $10,500 in campaign contributions, paying his friends who were doing little or no work on his campaigns for state Senate and county commission.

They also alleged he filtered $2,000 from his “Michael for Kansas” account to his personal bank account through two of his friends.

O’Donnell’s defense argued state law doesn’t regulate how or how much a candidate should pay staffers.

Carol Williams, who recently retired as head of the Kansas Governmental Ethics Commission, testified that state law leaves payment of staff up to a candidate’s discretion. She told the court that in her nearly 40 years with the state agency, she had never heard of the federal government investigating a state or local candidate’s campaign finances. She said the case was “unprecedented.”

O’Donnell – emotional at times – testified in his own defense for several hours last week, telling jurors that the indictment unsealed last May had caused his life to come apart. He said he felt compelled to pay staffers for the work they did. He said he surrounded himself and his campaign with family and friends because they were trustworthy and loyal.

He said his friends should have realized they were working when they attended certain events and fundraisers with him, including his fundraiser at a Garth Brooks concert and the opening of the new Eisenhower Airport.

"I probably didn’t say to them, ‘This, today, is a day you need to put your campaign hat on, versus a day that you don’t,’” he said.

Two of O’Donnell’s friends — David Jorgensen and Jack Masterson — testified in court that they couldn’t recall doing campaign-related work for many of the payments they received.

Jorgensen was paid monthly beginning in late 2014 and was given the title of “district director,” complete with business cards, when O’Donnell was still in the Senate. The FBI questioned him about 21 different payments, 15 of which became the subject of the 2018 indictment.

“I think he just wanted to pay me,” Jorgensen testified. “I asked him for work to do. Sometimes I didn’t do anything.”

Dalton Glasscock, who occasionally advised O’Donnell when O’Donnell was a state senator and later served as his campaign manager during his bid for county commission, testified for both the prosecution and the defense. He said he had “expressed concern” that Jorgensen was receiving monthly payments because Glasscock had never seen him working for the Senate campaign.

“I wanted to make sure if he was being paid, he was doing work,” Glasscock said.

But he said he was satisfied with O’Donnell’s explanation that Jorgensen was doing behind-the-scenes work compiling data and spreadsheets.

Glasscock said he would advise any candidate to pay staff as a way to increase motivation and accountability, and he acknowledged each campaign is different as to how it differentiates between volunteers and staff.

Of the nearly $175,000 O’Donnell paid staff from his two campaign accounts, $10,500 was the subject of the federal indictment.

Defense attorney Mark Schoenhofer said in his closing statement that the investigation was a “shameless attempt by our government to ruin the reputation and career of a young politician, a rising star in the Republican Party.”

O’Donnell, 33, was a member of the Wichita City Council in 2012 when he was recruited to run for state Senate, part of an effort by Gov. Sam Brownback to replace moderate Republicans with more conservative senators. O’Donnell easily defeated incumbent Sen. Jean Schodorf in the primary that year and then won a close general election race.

Speaking after the verdict was announced, Schoenhofer said it was “unfortunate that [O’Donnell] was targeted,” but that he had no idea who may have been behind the investigation.

“I’ve wracked my brain for an entire year why this case was brought to trial,” he said.

He said he was happy with the results “so far,” and hopes O’Donnell can put the case behind him.

The five counts the jury could not agree on relate to two $1,000 checks O’Donnell said he gave to friends as “bonus payments” for campaign work and requested back on the same day as repayment for a recent ski trip. Prosecutors allege it was done to obscure the source of the payments.