A judge will determine if a lawsuit against former Governor Eric Greitens nonprofit organization A New Missouri will move forward.
Judge John Beetem of Cole County Circuit Court in Jefferson City heard arguments Thursday on a motion to dismiss the case by A New Missouri Attorney Catherine Hanaway. She claims the lawyer bringing the litigation, St. Louis Lawyer Elad Gross, has no standing.
Gross is suing to force A New Missouri to disclose records revealing how it operates and spends money it receives.
Hanaway pointed out that Missouri law requires anybody who brings a lawsuit to have been impacted in some way by the defendant. She said Gross had failed to establish that A New Missouri affected him in any way.
“It says that the person has to be the recipient of services or activities,” said Hanaway. “He has not even pled that. He has not even pled that there are services or activities of A New Missouri.” Hanaway further stated that federal law prevents nonprofits such as A New Missouri from providing individualized benefits.
Gross didn’t name a service or benefit he’s received but claimed he had standing to bring the case because A New Missouri is a public benefit corporation and is subject to public oversight.
Hanaway told reporters after the court hearing that the nonprofit was not providing benefits to the public because it was an inactive organization. In response, Gross said the organization was violating the state’s consumer protection law by accepting donations without performing any services.
“My next step now will be to file another lawsuit against A New Missouri for violating Missouri’s Merchandising Practices Act,” said Gross. “That does give private attorneys the right to do it, especially when the attorney general hasn’t done it.”
A New Missouri is classified as a 501 (c) (4) organization which, according to the Internal Revenue Service, must be operated exclusively to promote social welfare. Under the designation, such organizations also aren’t required to reveal their donors.
Gross said that if the court took A New Missouri’s side and dismissed the case, the state would experience a wave of secretive nonprofit spending with no accountability. “I have a very big worry that we’ll see a lot of changes to the nonprofit sector, especially with respect to dark money flowing through the state of Missouri,” Gross said. “I think that the people really want to put an end to that.”
Attorney General Josh Hawley has acknowledged he has the authority to investigate nonprofits, but not political organizations, and has said the Missouri Ethics Commission has authority to investigate A New Missouri.
Gross, a former assistant attorney general, told reporters after the hearing that Hawley is skirting his responsibility to investigate nonprofits and accused him of accepting dark money in his current run for the U.S. Senate. “Unfortunately, he’s taking a lot of the same donations from these folks he should be investigating, and he’s just not doing his job.”
The 32-year-old Gross worked in the attorney general’s office from 2014-0216 under Democrat Chris Koster. He told reporters he’s thinking about running for the office himself, also as a Democrat.
Gross’s lawsuit also names three of the nonprofit’s officers as defendants and has been seeking deposition from them. In court Thursday, Hanaway said the three people should be dropped from the suit because Gross cited a portion of the law in which to include them that assigns no duties or responsibilities as officers of A New Missouri.
In addition to representing Greitens nonprofit, Hanaway served as attorney for the former governor’s campaign. She said she had no knowledge of his future political plans. “The last time I talked to him he was barbecuing,”Hanaway said. “He did not disclose where he was.”
Hanaway is a former Republican Speaker of the House in the Missouri legislature and is also a former U.S. Attorney.
Gross presented the Judge Beetem with several documents for the court to look over. The judge said he would not allow any evidence to be introduced because it would be premature to do so when he had yet to determine if the lawsuit would even move forward. Beetem told both attorneys to present him with additional paperwork over the next couple of weeks. He did not say when he would rule on the motion to dismiss.