New Nebraska state senator withdraws just hours after appointment after questions arise -
Published Sunday, December 8, 2013 at 12:00 am / Updated at 10:16 am
New Nebraska state senator withdraws just hours after appointment after questions arise

LINCOLN — The Bellevue businessman chosen by the governor to fill a vacant seat in Nebraska Legislature abruptly turned down the job Friday after questions surfaced about his fitness to hold public office.

Gov. Dave Heineman announced Friday morning that Patrick Shannon, 55, would be the “fiscal conservative” to replace Scott Price, who resigned the seat in November.

The World-Herald then asked the governor's office about the $16,000 state fine levied against Shannon in 2004 for secretly orchestrating a smear campaign against a legislative opponent.

About three hours later, the Bellevue businessman withdrew from the appointment. He said he had to attend to his father, who had “just suffered a heart attack.”

Afterward, the governor's communications director declined to answer questions about how closely Shannon had been vetted.

“This office is not going into details on the internal application and interviewing process for an appointed position,” Jen Rae Wang said in an email. “Mr. Shannon was offered the position and has since withdrawn his name for consideration because of personal, family medical issues. We are respecting said issues.”

The governor chose Shannon from a field of five applicants who sought the appointment. Wang said it had not been decided Friday if the appointment will be made from the remaining four applicants or if a new round of applications will be sought.

Multiple phone messages left with a receptionist at Shannon's office and on his cell phone were not returned Friday.

In the hours after his brief appointment, a check of public records revealed myriad financial troubles in Shannon's past.

For example, on his application for the appointment, Shannon said he was president or senior partner in five businesses. The governor's office described him as a business owner.

But in a 2012 legal deposition, he claimed he held ownership stakes in none of the firms and receives very little income from his ventures. What's more, when the Nebraska Accountability and Disclosure Commission sought to seize assets to pay the ethics fine, it found nothing.

Shannon described himself as senior partner in Bulldawg Tax & Accounting in Bellevue. He also listed himself in the application as president of Cashflow Billing Solutions, a Bellevue firm that provides contract medical billing services to private and public clients.

Thousands of dollars of federal tax liens, over unpaid federal taxes, were indicated in records kept by the Nebraska Secretary of State and Sarpy County Register of Deeds offices against Cashflow Billing Solutions.

In the 2012 deposition, Shannon said the owners of the company are in Nevada. Their names? “Pixie and Dixie,” he said, before declining to identify them by name.

The unpaid taxes that prompted the liens date back to 2002. According to the most recent one, filed in 2011, the company owed $404,292 to the federal government.

There were also two tax liens filed against Shannon for a residential property he owned at 3417 E. Dutchman Circle in the Golden Hills area of Bellevue.

One 2007 federal lien of $16,621 was paid off in 2011, the records indicate. Another lien, filed for nonpayment to state individual income taxes of $5,318, was filed in 2003 and paid off two weeks later.

He's also run into trouble with his former Bellevue company, which used the name Healthcare Management Solutions.

Between 2001 and 2003, Shannon had a contract with the City of Lincoln to manage ambulance billing. Because of improper billing discovered during an audit, the city repaid $120,000 to state and federal Medicaid and Medicare programs, said Sherrie Meints, a business manager with Lincoln Fire and Rescue.

Shannon's Cashflow Billing handled billing for the Bellevue Fire Department's rescue fees between 2008 and 2010, when the contract was terminated.

In 2004, Shannon unsuccessfully sought the seat he was briefly appointed to, and he ran afoul of campaign rules. The Accountability and Disclosure Commission fined him $16,000 over an anonymous mailing that accused his opponent of domestic abuse.

Shannon was fined for failing to report expenditures and contributions related to the mailing and for failing to disclose himself as the source. The commission called the violations egregious and slapped him with their highest fine — $2,000 for each of eight violations.

Shannon unsuccessfully appealed the fine in Lancaster County District Court. He has refused to pay the fine, which has accrued an undetermined amount of interest, said Frank Daley, the commission's director.

It may be that Shannon holds the distinction for having the highest unpaid fine for a campaign ethics violation, Daley said.

In a press release issued to announce the appointment, the governor said: “Pat is a fiscal conservative who supports lower taxes, opposes Obamacare's Medicaid expansion, opposes taxpayer-funded benefits for illegals, and he is pro-life.”

Shannon is a disabled combat veteran who retired from the U.S. Air Force in 1993 after attaining the rank of master sergeant. In the deposition, he said he got into a 1989 gunfight with “Islamic extremists” in the Philippines. He said he survived bullet wounds to the head and chest, which left him physically disabled.

Although he said he receives military disability payments and a pension for his years of service, the Internal Revenue Service seizes the payments each month. He said he hasn't seen his pension for years, according to his deposition.

He also said he has no personal finances, and he and his wife rent their Bellevue home, which is owned by his two adult sons.

When asked a question about the IRS, Shannon said: “It's a criminal organization that steals money from anyone they want.”

Carol Blood, a member of the Bellevue City Council, announced in November that she's running for the legislative seat. She also sought the appointment.

Benny Heald said Friday he is still interested in the appointment. Heald interviewed with the governor about two weeks ago but said he wasn't informed that another applicant had been selected.

The two other applicants were Tommy Garrett and Jane Nielsen.

Shannon had been scheduled to take the oath of office Monday.

World-Herald staff writers Paul Hammel and Emily Nohr contributed to this report.

Contact the writer: Joe Duggan    |  

Joe works in the Lincoln bureau, where he helps cover state government, the Legislature, state Supreme Court and southeast Nebraska.

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