Opinion ID: 359689
Heading Depth: 2
Heading Rank: 1

Heading: Senate Bill 110 Auto Dealers.

Text: 9 Substitute Senate Bill 110 (S.B. 110), introduced in 1973, proposed a change in the Ad valorem method of taxation of car dealers' inventories. According to the Ad valorem system, car dealers were taxed a percentage of the value of the highest inventory during a regular four-month period each year. Legislation to change the tax to a standard amount on each new car sold had been introduced in previous sessions of the legislature but to no avail. Because the automotive industry believed the tax system proposed by S.B. 110 would be more equitable, the Missouri State Automobile Dealers Association decided in 1973 to make a concerted effort to have the bill heard, considered, and passed in that year. The Association assigned Gene Worn, legislative liaison for the Greater St. Louis Automobile Dealers Association, to assist in lobbying to obtain House approval of S.B. 110. 10 After the Senate passed the bill with no particular difficulty, Rabbitt, in his capacity as Speaker, assigned the bill to the Local Government-Related Matters Committee, a committee generally favorable to the bill and chaired by a personal friend of Rabbitt. Worn spoke with the committee chairman who said the bill would have an early hearing. Worn then asked Rabbitt what, if anything, could be done to expedite the bill's passage. Rabbitt suggested that Worn retain additional legal counsel, recommending his close friend, John Connaghan, an attorney and lobbyist. 11 Worn conferred with leaders in the Missouri State Automobile Dealers Association, and the group decided to follow Speaker Rabbitt's advice. As the legislative session was nearing its close, the automobile dealers were concerned that their efforts to obtain this industry bill might not bring success in the House without full legislative cooperation. Worn contacted Connaghan, who agreed to speak with Rabbitt about the bill for a nonnegotiable fee of $20,000. Worn hired Connaghan. Based on his experience in the legislature, Worn believed it was wise to follow a House Speaker's recommendation on legislation. 12 As a down payment, Ben Lindenbusch, a St. Louis automobile dealer, advanced $5,000 in the form of a personal check toward Connaghan's fee. Later the Motor Car Dealers Association of Greater Kansas City mailed a $5,000 contribution in the form of a check for Connaghan to Lindenbusch. Two other $5,000 checks were obtained. Worn delivered the additional $15,000 to Connaghan. 13 Connaghan performed no lobbying work. He gave this fee to Rabbitt, some directly and the remainder indirectly by check to Rabbitt's law partner-brother, Peter Rabbitt. These funds were deposited in a special account available for withdrawal by Richard Rabbitt. The Rabbitts admitted receiving funds from Connaghan but claimed the money represented referral fees for law business previously assigned to Connaghan. 14 The record discloses that following the $5,000 down payment, S.B. 110 survived a committee hearing and passed the House. The Governor subsequently voided the legislation as unconstitutional. 15 As we have previously noted, 3 the incidents relating to S.B. 110 resulted in one count of mail fraud under the mail fraud statute, count XIV, and two counts of extortion under the Hobbs Act, counts XII and XIII. 16