Missouri Attorney General Andrew Bailey’s decision to withdraw from a lawsuit against the state highway patrol has earned a sharp rebuke from his potential 2024 rivals, with candidates from both parties demanding he return campaign donations connected to companies suing the state.

Bailey cited an unspecified conflict of interest for not being able to defend the Missouri State Highway Patrol in a lawsuit filed nearly two years before he took office by companies accused of operating illegal gambling devices — Torch Electronics and Warrenton Oil. 

The state will now be defended by private counsel. 

The attorney general’s decision quickly drew criticism over the fact that his campaign has received thousands in contributions in recent months from political action committees connected to the chief lobbyist for both companies.  

“It is ridiculous that taxpayer dollars will now have to be spent on hiring private lawyers to defend the public interest in this litigation because of Bailey’s decision to accept campaign contributions from parties adverse to the state and from their lobbyists,” said Adam Moran, spokesman for Will Scharf, a former assistant U.S. attorney and policy director in Gov. Eric Greitens’ brief administration who is challenging Bailey in the GOP primary. 

Moran noted that Bailey’s predecessor, Eric Schmitt, returned a campaign contribution from the owner of Torch Electronics after conflict of interest concerns were raised. He said Scharf would pledge not solicit or accept any campaign contributions from registered Missouri lobbyists or the PACs that they control.  

“We call on Andrew Bailey to take the same pledge,” Moran said, “and return any such contributions that he has already received.” 

Missouri AG drops out of gambling case after taking donations from companies suing state

Elad Gross, a government transparency advocate from St. Louis running for attorney general as a Democrat, said Bailey accepted the donations “fully knowing that his office was involved in this litigation.”

“He has compromised his entire office on this issue,” Gross said. “So sure, he should return the donations, but he should consider returning his law license, too.”

State Rep. Sarah Unsicker, a Democrat also considering a run for attorney general, said Bailey should return campaign cash if it came with any strings attached. 

But from the outside, Unsicker said, it’s impossible to know if the campaign donations are why he withdrew from the case or if it is more complicated.

Bailey’s campaign did not respond to a request for comment about the criticism. 

The attorney general’s office declined to clarify whether the campaign contributions were the conflict that caused him to withdraw from the case. A spokeswoman for the office reiterated its previous statement that Bailey withdrew from the lawsuit “to avoid any appearance of impropriety.”

If Bailey created a conflict by accepting campaign contributions from a company he knew was in active litigation against the state he has an obligation to say so, said Kathleen Clark, a law professor who specializes in government ethics at Washington University in St. Louis.

“The attorney general’s office needs to explain what the conflict is, and in particular, whether it’s a conflict of its own making by accepting donations,” Clark said. 

“This decision is going to cost the state money to hire private counsel,” she said. “So it seems to me that taxpayers deserve to know what has caused this conflict of interest, especially if it could have been avoided simply by refusing donations from anyone associated with this lawsuit.”

Donations

On March 30, five political action committees cut $2,825 checks to Bailey’s candidate committee. That’s the largest donation a candidate can accept under voter-imposed contribution limits. 

All five PACs — MO Majority, Missouri Senior, Missouri AG, Missouri C and Missouri Growth — are linked to Steve Tilley, a lobbyist who represents both Torch Electronics and Warrenton Oil. 

Last year Torch and Warrenton combined to donate $275,000 to the five PACs. While the PACs had other donors, half of the money they raised last year came from Torch and Warrenton. 

All five PACs also contributed to Liberty and Justice PAC, which was formed late last year to boost Bailey’s 2024 campaign. But while Bailey can help that PAC fundraise, he is not allowed to have any direct control over how it operates or spends its money. 

Further complicating the situation, the Missouri Gaming Association last month filed a motion to intervene in the Cole County lawsuit. The association, which represents the state’s 13 licensed casinos, has long called for a crackdown on Torch’s machines. Its attorney in the case is Marc Ellinger, who also serves as treasurer for Bailey’s campaign committee. 

None of the other potential candidates for attorney general have received contributions from Torch or Warrenton, though Torch’s longtime spokesman — Gregg Keller — serves as a senior adviser for Scharf’s campaign. 

Game of chance? 

Torch Electronics, founded in 2015, has placed thousands of its video games in convenience stores, truck stops and other locations across the state. Warrenton Oil, which operates more than 50 convenience stores, has Torch machines in many of its locations.

The machines in question operate similarly to what you’d find in a casino. Players insert money, select a game and decide how much they wish to wager. Winners get paid by the store cashier.

The Missouri Gaming Commission has deemed the machines gambling devices, which are prohibited outside of licensed casinos, and the state highway patrol considers them illegal.

Torch disagrees, saying its machines reveal the outcome of the wager before the player moves forward. Thus, the company argues, they are not a game of chance and therefore not illegal.

Starting in 2019, the highway patrol began a focused enforcement effort against the machines, sending more than 200 cases to local prosecutors alleging violations of state gambling laws.

Few criminal cases have been filed, however, and the lawsuit filed in Cole County seeks to quash any future investigations. Torch and Warrenton are asking the judge to declare that its machines are not gambling devices and that the state overstepped its authority when it removed machines from convenient stores.

When asked about the issue shortly after he was sworn into office in January, Bailey made it clear his office would not be going after unregulated gaming machines.

The Cole County case is scheduled for a trial beginning July 31. Both Scott Pool, the attorney who now represents the state, and Chuck Hatfield, the attorney for the plaintiffs, said the change of counsel should not delay the case. 

“Let’s see if that actually ends up being true,” Clark said. “This case has been going on for two years. And now a few months before trial is set to begin, the expertise that the attorney general’s office has developed over the last couple of years is no longer available.”