Governor accused of cronyism with award of license office contract to former politician

In letter to governor, Thomas calls selection ‘outrageous’

By EVAN YOUNG

News that a former politician’s company won the management contract for a local license office has the head of the Sunset Hills Historical Society, which also submitted a bid for the office, accusing Missouri Gov. Jay Nixon of cronyism.

The Missouri Department of Revenue announced last week that The Lavin Co. will manage the South County License Office at 27 Ronnie’s Plaza, near the intersection of South Lindbergh Boulevard and Baptist Church Road.

The company is associated with former Republican state Rep. Patrick J. “Jim” Murphy and his son, James W. Murphy, both of Crestwood. It also won the management contract for the Affton License Office in October.

All local license offices are supervised by the DOR, but each office is operated by an independent contractor.

The Lavin Co. won contracts for both the Affton and South County license offices through a competitive bidding process that Nixon established last year. Before competitive bidding, license office management contracts were awarded through gubernatorial patronage.

Now, bidders for the state’s 183 license offices submit proposals on how they would operate them, and those proposals are reviewed by DOR staff. The process became law last summer with bipartisan support in the state legislature.

“A review team evaluates each aspect of the bids — everything from customer service to the location of the proposed office,” Missouri DOR Director Alana M. Barragán-Scott said. “After the team makes its recommendation, it is reviewed by senior department management, and then reviewed again by the Office of Administration to make sure that proper bidding procedures have been followed.”

But while Nixon, a Democrat, believes competitive bidding fosters transparency and eliminates political favoritism, Sunset Hills Historical Society President Morris “Butch” Thomas says the governor’s reform hasn’t changed anything.

“He just went 180 degrees from what he was going to do,” Thomas told the Call.

The Sunset Hills Historical Society and the historic Sappington House in Crestwood — two nonprofit organizations — partnered to submit bids for the South County License Office contract, as did the nonprofit Affton Chamber of Commerce.

All three also unsuccessfully applied for the Affton License Office contract last year.

Bidders have the option of returning part of a license office’s revenues to the state. In its proposal for the South County License Office, The Lavin Co. offered an 8-percent return, from roughly $35,000 to $40,000; the Sunset Hills Historical Society and Sappington House offered 5 percent.

“Had we known it was a bidding war, that it was going to the higher bidder, we would’ve possibly bid more,” said Thomas, who added that most Missouri license office operators return less than 5 percent to the state. “But we’re trying to generate some revenue for both the nonprofit organizations, and that’s what we felt most comfortable with doing.”

The groups submitted bids under the impression that Nixon was encouraging participation from nonprofit organizations, Thomas said.

“His intention was he wanted to go to nonprofit organizations — worthwhile groups — and he wanted to do away with this thing of giving (license offices) as political promises to his political friends.”

But in the end, Nixon “gave it to a retired politician. That’s what it boils down to,” Thomas said.

The elder Murphy, 84, is no stranger to running license offices. Besides winning Affton’s last year, he was awarded the contract to manage Bridgeton’s facility in 1985 — under the old patronage system — by former Gov. John Ashcroft. He eventually lost the office when the late Gov. Mel Carnahan was elected.

But the former state representative contends The Lavin Co.’s qualifications, not money or politics, are the reason it’s now the agent for the Affton and South County licensing offices.

With more than two decades of experience in the fast-food industry, Murphy says he and his company take a “retail approach” to running license offices. In the case of Bridgeton — and now Affton — patrons were directed to stations that specifically handled what they came in for, which shortened the amount of time they spent at the office, he said.

“We channeled people on the basis of the time it would take to serve them, so that we’d get the maximum through there,” Murphy said. “We intend to have that same type of operation at Ronnie’s. It takes about three to four months to find out the pattern. You have to find out what’s the heaviest demand over there. Is it driver’s licenses? Is it commercial? Is it titles? Is it license renewals?”

Outfitting a license office for such efficiency is not cheap, and with an 8-percent return to the state, Murphy predicts his for-profit company won’t turn much of one at the end of the day.

“License offices have become far more complex than they were in the ’80s and ’90s when we ran them. I’m just amazed,” said Murphy, whose company has bids pending on several other Missouri license offices.

“The equipment you need to do a good job is far more costly. In order to bid on each office, I have a line of credit for each office of $285,000 so the state is protected in case there’s any fumbling and I have the money to go in there and modernize it. I’m not criticizing the former people, but that’s the way the style has moved forward,” he said.

The South County License Office will be open longer than the traditional “government hours” of 9 a.m. to 5 p.m., Murphy said. Patrons will be able to come in from 7:30 a.m. to 7 p.m. on weekdays and from 8 a.m. to 2 p.m. Saturdays, he said.

“At 84, I sound like a kid going into a new venture,” Murphy said of The Lavin Co.’s newest license offices. “But I’ve opened so many restaurants and things like that, it’s just normal.”

He added, “I want to make these offices the pride of the state. That’s my goal.”

In a sharply worded letter to the governor, Thomas called the state’s selection of The Lavin Co. for the Affton and South County license offices “outrageous.”

“We are three very worthwhile organizations who wish to pay our own way,” Thomas wrote of the Sunset Hills Historical Society, Sappington House and Affton Chamber of Commerce. “We have some very outstanding programs on the horizon and it’s just not fair to show your cronyism comes before the people.”

But Murphy, who donated thousands of dollars to Kenny Hulshof, Nixon’s opponent in the 2008 gubernatorial race, couldn’t disagree more.

“It isn’t politics when a Republican gets an office from a Democratic governor — I think it’s just the opposite, you know?” he said.