LINCOLN — Bellevue businessman Patrick Shannon said Monday that the governor knew about Shannon's state fines for campaign violations before appointing him last week to the Nebraska Legislature.
Shannon withdrew Friday several hours after questions surfaced about an anonymous smear campaign he orchestrated against an opponent in a 2004 legislative race.
Shannon cited a family medical emergency as the reason for his withdrawal.
Gov. Dave Heineman declined to say Monday morning whether he knew about the $16,000 in state ethics fines levied against Shannon before appointing him to the vacant District 3 legislative seat.
“He's withdrawn, and we're in the process of finding a new senator to appoint to District 3,” Heineman said. “That's the most important priority.”
Later Monday, The World-Herald contacted Shannon at his Bellevue tax and accounting business.
Shannon said the vetting process for the appointment took about three weeks. It included a private, in-person interview with Heineman that lasted about 40 minutes and “one or two” follow-up phone conversations with the governor.
Shannon said that during the in-person interview, Heineman questioned him about the $16,000 in fines.
“He told me he knew (about the fines) and asked what did I learn from it,” Shannon said.
Shannon sent an email to the Governor's Office on Friday, stating that he couldn't fill the seat because his father had “just suffered a heart attack” in Oklahoma and it would be necessary for him to help provide care for his mother.
In an interview Monday from his Bellevue office, Shannon said that the heart attack was mild and that his father had been dismissed from the hospital and was recovering at home.
Shannon said his parents live in a city outside of Oklahoma City.
When contacted Monday afternoon, Jen Rae Wang, the governor's communications director, declined to discuss details about the “internal application and interviewing” process.
Shannon has not paid the state fines, which have accrued an undetermined amount of interest.
Felony or misdemeanor criminal convictions can disqualify someone from serving in the Nebraska Legislature, said Secretary of State John Gale. But violations of campaign rules are civil, not criminal, violations, he said.
The fines involve an anonymous mailing by Shannon that leveled accusations of domestic violence against one of his opponents for the Legislature.
The Nebraska Accountability and Disclosure Commission fined him 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 its highest fine — $2,000 for each of eight violations.
When the commission sought to seize Shannon's assets to recover the fine, it was unable to find any, said Frank Daley, director of the commission.
Nine people submitted letters of support for Shannon's appointment. Former State Sen. Abbie Cornett, however, said she expressed concerns about Shannon to the governor's staff. When contacted by The World-Herald Monday, she declined to provide details.
Cornett won the 2004 race for the Bellevue seat. She was not the target of Shannon's mailing.
Records kept by Sarpy County and the secretary of state also indicate liens dating to 2002 against Shannon's medical billing company, Cashflow Billing Solutions, for failing to pay taxes. The most recent lien in 2011 stated that the business owed about $404,000 to the federal government.
In 2006, the U.S. Tax Court ruled against Shannon in a seven-year dispute over his failure to pay income tax in 1999. A judge determined that Shannon owed about $21,000. Shannon unsuccessfully argued that the government owed him about $20,000.
Records indicate that he paid off one federal lien of $16,600 against his Bellevue home in 2011. Another $5,318 lien against the house for nonpayment of state income tax was paid off in 2003.
Shannon said Monday that he currently has no issues with the Internal Revenue Service over unpaid taxes.
“I can't have a tax issue as a tax preparer,” he said. “It is an impossibility.”
World-Herald staff writer Paul Hammel contributed to this report.
Jeff Koterba's Dec. 20, 2013 cartoon