August 12, 2005
Claire McCaskill
Office of the State Auditor,
P.O. Box 869,
Jefferson City, MO 65102.
Re: Our Mission - Improve the efficiency and effectiveness of Missouri Government by
providing accurate and timely performance and financial audits
Reduce waste and opportunities for fraud. Account for Missouri's taxpayer dollars.
As I understand it, you are "Charged with auditing all state agencies, boards and commissions, the
court system, and counties that do not have a county auditor." About half of the levee and
drainage districts are carried on the Secretary of States books as inactive because their term of life
expired (i.e. dead corporations, as was the Birmingham Drainage District for 40 years.) Its
charter expired in 1963. The other half of these public corporations are not required by the
Secretary of State to have an agent or even an address.
A perfect opportunity for fraud.
How can you possibly fulfill your mission if you don't have contact information, or even an
addresses for a Missouri public corporation your are required to audit?
Becky Webb's March 23, 2005 letter to Clay County Auditor Vic Hurlbert, indicates you do
not audit Missouri drainage and levee districts, which are Missouri public corporation, unless they
are charging ad valorem taxes. She states there are only two such entities in the state. Actually the
Birmingham Drainage District, located within the City Limits of Kansas City and operated by the
representatives of the Mormon Church, does charge ad valorem taxes. People in Birmingham
without an acre of land to vote, are being charged more than a person with 4 acres of land. Clay
County drainage tax collections jumped from $39 thousand dollars annually to $364 thousand.
Between August 2004 and February 2005 signatures were being collected to have your office audit
the Birmingham drainage district. See http://deadlydeceit.com/Auditor-Mo.html
The petition drive was stopped when the county decided it would do an audit.
Unfortunately, the County Audit focused on the Collectors Office.
The County auditor did play a little game with the facts he found.
1 A 1923 Supreme Court ruling which notes a state constitutional prohibition
against a drainage district being formed within the city limits of Kansas City on a
petition by landowners. However, we note the area encompassed by the
Birmingham Drainage District was not annexed by Kansas City until 1962, long
after the District had been Formed.
The County auditor neglected to mention that the public corporation charter expired in December
of 1963 At that point it should have been liquidated:
"'If a municipal corporation', declares the Supreme Court of the United States, 'upon
the surrender, or extinction in other ways, of its charter, is possessed of any property,
a court of equity will equally take possession of it for the benefit of the creditors of the
corporation.
It was carried on the Secretary of State's records as inactive until April 1, 2003. Yet, the Clay
County Collector has been collecting taxes for the dead corporation since it expired in 1963.
2 A Howard County Circuit Court finding that a levee district which had gone
out of existence due to the expiration of the specified term of corporate
existence would be required to liquidate the district as a public corporation, pay
its debts and return the rest of the money to the taxpayers. (Cause 214, Watts vs
Gross, legal file item 27). However, we note the Clay County Circuit Court has on
several occasions recognized the legal and ongoing existence of the
Birmingham Drainage District and the taxpayer was a party in at least one of
these actions
The Clay County Court did do a two paragraph reorganization Order in 1970, seven years after the
public corporation charter expired. However, documents show the parties involved knew it was not
legal and the court did not send the Order to the Secretary of State within the 60 day limit as
required by RSMO 242.040.3 to create a public corporation. A lawyer sent the 1970 Order to the
Secretary of State in March of 2003 and it is dated stamped April 1, 2003.
I am enclosing a short history in the form of a report to the Clay County Commissions. No one
(county, Secretary of State, Attorney General or legislators) wants to address this situation
because there is a high powered Church lawyer involved. The dead district with a Board that could
not have served in a legal district even testified to get an ex post facto law enacted. It can also be
found at http://deadlydeceit.com/BDD_Financial.html
More documents are attached to the page http://deadlydeceit.com/Clay_county.html
The question is, how could you do an audit on a Missouri public corporation that ceased to exist in
1963 and by Missouri Constitution can not exist within the City limits of Kansas City?
There are 47 concerned taxpayers who signed the audit petition. It is their desire that the proper
state authorities handle this situation. It would appear that this falls under your mission statement
requirements.
By the end of the month, we expect to have a meeting to discuss options for handling this situation.
Hopefully you can let us know your thoughts by then.
Sincerely,
Jim Bynum PO Box 682, Smithville, Mo. 64089 (816) 699-3975 [email protected]