Jan 10, 2020 3:15 PM

Developer of hotel near KU pleads guilty to tax conspiracy

Posted Jan 10, 2020 3:15 PM
Oread Hotel adjacent to the University of Kansas campus photo courtesy Oread Hotel
Oread Hotel adjacent to the University of Kansas campus photo courtesy Oread Hotel

TOPEKA, KAN. – A Kansas building contractor pleaded guilty Thursday to conspiring to deprive the city of Lawrence of sales tax revenues in connection with the development of a seven-story hotel adjacent to the University of Kansas campus, according to the United State's Attorney.

Thomas S. Fritzel, 54, Lawrence, Kan., pleaded guilty to one count of criminal conspiracy. Fritzel, part owner and manager of Oread Inn LC, was a party to an agreement with the city to finance the more than $40 million hotel project, including $11 million worth of street repairs and a public parking garage.

Oread Inn LC was to pay all costs up front and to be repaid $11 million for public improvements. The money to repay Oread Inn LC was to come from an incremental increase in property tax, a sales tax and an additional 1 percent tax on sales within a portion of the redevelopment district.         

In his plea, Fritzel admitted that he and others caused false monthly Kansas sales tax returns to be submitted to the state of Kansas. The reports classified certain sales as occurring within the redevelopment district when in fact they occurred outside the district. As a result, the city of Lawrence lost a portion of sales taxes it was due.         

The city of Lawrence filed a civil lawsuit against Fritzel seeking the lost revenue and the parties settled that case in 2017.

Sentencing in the criminal case is set for May 4. Both parties have agreed to recommend a sentence of 12 months and a day in federal prison and a fine up to $250,000. 

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Jan 10, 2020 3:15 PM
With Pompeo out, GOP can't dodge Kansas Senate race headache
Photo courtesy  Kris Kobach campaign

TOPEKA, Kan. (AP) — Secretary of State Mike Pompeo’s declaration Tuesday that he won’t run for Senate in Kansas returned some Republicans to worrying that they can’t block a polarizing conservative from winning the GOP nomination and putting the seat in play.

Pompeo’s decision to remain as the nation’s top diplomat, assuming he sticks by it, means the GOP can’t dodge the issue that had prompted top Republicans to woo Pompeo for months. They saw Pompeo as the best bet for torpedoing hard-right immigration policy advocate Kris Kobach’s bid for the Senate.

The turmoil in the Middle East that preceded Pompeo’s decision could help Kobach with hawkish GOP primary voters. Kobach, the former Kansas secretary of state, has spent two decades building a national profile partly by framing illegal immigration as a national security issue and touting his work with the U.S. Justice Department right after the 9/11 terror attacks.

Some anti-Kobach Republicans focused quickly on the race’s best-funded candidate so far, GOP Rep. Roger Marshall of western Kansas. But he still faced skepticism about his conservative bona fides and whether he can stop Kobach, particularly absent a one-on-one match.

“Everybody but Kobach probably should get together and say, ‘Now why are we doing this and what are we trying to gain?’ And pick somebody and go head-to-head,” said Tim Shallenburger, a former Kansas Republican Party chairman and state treasurer.

Pompeo’s decision complicates GOP efforts to defend their 53-47 Senate majority in November’s elections. The national party and its allies face the prospect of having to put resources into Kansas, even though Republicans haven’t lost a Senate race there since 1932.

Pompeo has said repeatedly that he’d remain secretary of state as long as President Donald Trump will keep him. But his travels to Kansas last year — and comments from Trump — kept buzz about a potential candidacy alive.

He told reporters Tuesday: “I said the same thing yesterday that I’ve said for months. No.”

Fears that a Kobach nomination could put the seat in play arose even as four-term Republican Sen. Pat Roberts, now 83, announced a year ago that he wouldn’t seek re-election. Kobach lost the Kansas governor’s race in 2018 to Democrat Laura Kelly — a contest many in the GOP thought winnable.

The National Republican Senatorial Committee questioned Kobach’s ability to win a general election when he announced his candidacy last summer.

And Scott Reed, the U.S. Chamber of Commerce’s chief political strategist, who ran Bob Dole’s 1996 presidential campaign, said, “We continue to think Kobach is a loser.”

Some Republicans want to winnow the field by urging candidates at the back of the field to drop out. Kelly Arnold, another former state GOP chairman, said if candidates can’t conduct effective fundraising, “it’s time for them to get out.”

Kobach said Tuesday that his independence bothers the Republican establishment — including U.S. Senate Majority Leader Mitch McConnell — and led it to woo Pompeo. His supporters argue that with Trump on the ballot in November, fears of losing the Kansas seat are misplaced.

“We’re seeing a race where conservatives are lining up behind me,” Kobach said.

Kobach also believes his background is an asset with tensions high in the Middle East. At the Justice Department, he helped develop a system that forced more than 80,000 foreign residents to register with the U.S. government so that it could know why they were there for security reasons. Widely derided by civil rights groups, it was abandoned in 2011 by President Barack Obama’s administration.

Photo courtesy Congressman Dr. Roger Marshall

Marshall spokesman Eric Pahls said the congressman’s seven years in the Army Reserve are more crucial.

“Kansans want to know there’s someone with military experience helping to make these decisions,” he said.

But Bob Beatty, a Washburn University of Topeka political scientist, said Kobach has built a reputation among Republicans as “someone who doesn’t back down.”

“A foreign policy crisis is going to bring out more conservative voters,” Beatty said.

The leading Democratic candidate is state Sen. Barbara Bollier, a retired Kansas City-area anesthesiologist who made national headlines by switching from the GOP at the end of 2018. She has endorsements from Kelly and former U.S. Health and Human Services Secretary Kathleen Sebelius, a former two-term Democratic governor, and she already is pursuing moderate voters.

Bollier’s campaign announced Tuesday that she’s raised more than $1 million over the past three months — a sizable amount in a low-cost media state like Kansas.

But Marshall began his race with a sizeable balance from his House campaign and entered the final three months of 2019 with nearly $1.9 million in cash. That was twice as much as the combined total of his main GOP rivals, Kobach, Kansas Senate President Susan Wagle and Dave Lindstrom, a Kansas City-area businessman and ex-Kansas City Chiefs professional football player.

The U.S. Chamber helped Marshall win his congressional seat in 2016 by defeating tea party firebrand Rep. Tim Huelskamp. Reed said they’re considering helping him in the Senate race and the “onus is on him” to show he can win the nomination.

Marshall launched his first television ad before Christmas, describing himself as a foe to “Trump haters and their phony impeachment.”

Yet Marshall is hasn’t yet convinced some Republicans. Shallenburger sees his pro-Trump statements as “pandering” and says his ouster of Huelskamp has him perceived as a moderate, despite a conservative voting record.

Kobach is better known and, to some conservatives, just more exciting. University of Kansas political scientist Patrick Miller said Kobach excels “at the theater” of politics, while Marshall seems “vanilla.”

“If central casting called for a generic Republican congressman, that could be Roger Marshall, right?” Miller said. “Someone to just, like, be in the background of the movie shot.”