Questions raised by Missouri spending on veterans videos [St. Louis Post-Dispatch]

Mar. 24--JEFFERSON CITY -- Questions about how a Chesterfield company has spent $1.7 million in taxpayer dollars could put at risk the future of a popular program that records videos of Missouri veterans talking about their experiences serving their country.

The program has produced about 1,300 videos since 2007, but the cost -- $1,400 per video -- has some lawmakers questioning whether Missouri can afford the program in a tight budget year.

"Only in government would we allow something like that," Sen. Brad Lager, R-Savannah, said, when told how much the videos cost. "The private sector would never pay rates like that."

Company leaders also have drawn criticism for making political donations with state money and for allowing the state-paid videos to be used by a sister company not affiliated with the government.

The video company, Patriot Productions, has its roots in a Clayton-based funeral-services company named Forever Enter-prises, accused by prosecutors and regulators of a sweeping fraud racket that lost $600 million. Forever crumbled in a heap of debt and controversy in 2008. One criminal indictment has emerged so far from the wreckage.

Forever ran cemeteries and sold pre-need burial insurance in more than a dozen states. It also produced "Life Stories" -- video homages to the deceased that it dreamed would become the 21st-century version of tombstones.

Forever used that video expertise to do something similar with Veteran Stories. In 2006, Forever won a bid for a $300,000-a-year, three-year contract to produce these videos. Then the company collapsed. Two ex- Forever executives, Randy Murray and Michael Butler, left to start up Patriot.

Gary McElyea, spokesman for Lt. Gov. Peter Kinder -- who directs the video program for the state -- said the turmoil at Forever never affected the veteran videos.

"We've been pleased with the product the entire time," McElyea said Tuesday.

But the company's past is not the only thing raising questions about its contract with the state.

In February 2009, Patriot Productions gave a $1,000 contribution to state Rep. Allen Icet, R-Wildwood, the chairman of the House budget committee. The company got more than $500,000 in the state budget that was approved that year.

The company's contract to produce videos for the state is its only source of income, Murray told the Post-Dispatch. "That's all we do. It's our only contract," Murray said Monday.

He said that Patriot Production's sole purpose was to produce the veterans videos called for in the contract first awarded his company in 2007.

So any campaign donation made by the company would have ultimately come from taxpayers.

Asked whether he felt it was appropriate to use state money for a campaign contribution, Murray said, "That's not how we looked at it."

Told of the donation, Lager called it "disappointing."

"The problem here is you have a company that has built its entire business plan on government income giving a campaign contribution to one of the key people who can control their destiny," Lager said.

Icet said he was "surprised" to hear about the donation. But he pointed out that in the budget he submitted for 2011, there was no money for the video program. And in previous budgets, Icet said he wouldn't have been aware of which company might be bidding on a project.

"Once we appropriate, I don't know where the money goes," Icet said.

When Icet's proposed budget showed up this year without money for the veterans program, Kinder's office started lobbying for the money to be reinstated. Ultimately, some of it was. Kinder appears in a video pushing for the project, and that video is posted on Kinder's campaign website.

The video -- and a message urging veterans to contact lawmakers -- also appears on the website that the state paid Forever Network to establish under its original contract with the state.

Murray and Butler's wife each donated $750 to Kinder's campaign in December 2008. Both Murray and Butler were also executives with Forever Network.

On Tuesday, about $300,000 was added to the proposed House budget for next year despite the protests of Rep. Jason Kander, D-Kansas City, who sits on the budget committee and is also a member of the Missouri Veterans Commission.

Kander, who is a veteran, said that like Lager, he objected to the cost of the program. "It just strikes me as wasteful to spend $1,400 per video during a budget crisis," Kander said. "We have to look at every possibility to save, and it doesn't make any sense to spend that kind of money."

The House began budget deliberations Tuesday, and they continue today.

TROUBLED PAST

Lawmakers first put $1 million into the budget of the veterans commission for the video project in 2005, even though the commission hadn't requested the money.

Murray's company was then called Forever Studios and was a subsidiary of Forever Enterprises.

Once the veterans commission scrapped the project, some of the money -- about $300,000 -- was eventually put into Kinder's 2007 budget.

When Forever Enterprises ran into legal troubles, Murray and Butler broke off from the company and formed Patriot Productions.

But that's not the only company they own.

They also formed a separate company -- Hometown Heroes, LLC -- that has no connection to the state contract to produce the veterans' videos.

That company has a website that indicates it is establishing a nationwide database of veterans' videos, but the only videos up on the site so far are the Missouri videos that state taxpayers funded.

Murray said he didn't see any problem with the videos' being up on the state-funded website -- www.missouriveteranstories.org -- and another one that he controls.

"We are dedicated to the goal of preserving these stories," Murray said. "The original idea was to find unique ways to get these stories out for people to see."

There is nothing in Murray's contract with the state that prohibits him from using the veterans' videos for his own purposes.

The program is popular with veterans, said Rep. David Day, R-Dixon.

Day, who is chairman of the House veterans committee, said that when he meets with veterans in his district, they overwhelmingly approve of the project.

"Every person I've talked to is a fan of it," Day said. "I don't want to see it eliminated."

Todd Frankel of the Post-Dispatch contributed to this report.

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