Mayor: Councilwoman didn’t pay biz fees, was ineligible to take office

Springfield’s mayor says a city councilwoman should never have been eligible to hold office because of her failure over several years to get a business license and pay related fees.

The comments came two days after the same councilwoman, Kristi Fulnecky, questioned the mayor’s honesty regarding what he knew about an ACLU lawsuit against the city.

Mayor Bob Stephens announced at about 1:30 p.m. Friday that Fulnecky is the subject of a probe that was triggered by a letter from five council members. The letter says there is no evidence a business license was ever obtained for Fulnecky Enterprises, LLC.

"Councilwoman Fulnecky has indicated she is the sole owner of Fulnecky Enterprises, LLC," the letter says. "Thus, it appears Councilwoman Fulnecky has illegally operated a business in Springfield during the past seven years."

A retired judge will sit on a hearing to decide if Fulnecky, a lawyer, had been eligible to take the oath of office in April and can remain in her post.

About an hour after the mayor's announcement at a news conference, the News-Leader reached Fulnecky. She gave a short statement defending herself.

"The Mayor is retaliating against me," she said. "I reread the City Code and Charter. I'm not in violation of either and I never was in violation.

"It's too bad that citizens can't be involved in public life without being bullied into voting or thinking a certain way." She and the mayor have been at odds over the ACLU lawsuit and a highly controversial indecent exposure ordinance.

Her attorney, Dee Wampler, issued a statement explaining some of Fulnecky's political views, including that she has "been a pro-family values public official." She had not held office before being elected to City Council.

"Along the way, she has tweaked some noses in high places," it says. "Now it is payback time. She says what she thinks, and is entitled to make public comments. She may not always be politically correct.

"She is a dedicated public servant and has never acted intentionally or knowingly in violation of her oath. She will vigorously defend all allegations against her."

The letter from council members seeking a probe says the city's finance department repeatedly requested Fulnecky pay three years of back fees — which are considered taxes under the state's Hancock Amendment. She paid those fees on Wednesday. The previous four years of fees cannot be collected because the city code only allows three years of back taxes to be collected.

The city gave reporters a timeline of contact with Fulnecky regarding her business license.

It says the city officials called and emailed Fulnecky in late August. It says Finance Director Mary Mannix Decker sent a follow-up email on Oct. 6. There was some correspondence throughout October leading up to the payment of the portion of the fees on Wednesday.

The total of fees paid is confidential, Scott said, because it's based on total business receipts. The total owed amount covering seven years is also confidential.

Retired Supreme Court Justice John Holstein will review the case and determine whether Fulnecky can keep her City Council seat. Stephens said it could take "two weeks or two months" — it's up to the judge.

The letter requesting the review was signed by Ken McClure, Phyllis Ferguson, Jan Fisk, Mike Schilling and Craig Fishel. It says, "I reluctantly sign this letter, but see no other option to clear up these matters."

Stephens and council members Craig Hosmer and Justin Burnett, Fulnecky's ally in the debate over the indecent exposure ordinance, did not sign the letter.

By Friday afternoon, claims were circulating on social media — primarily among apparent Fulnecky supporters — that Stephens' own consulting business, Cascade M3 LLC, was not licensed when he took office. Scott, the city spokeswoman, said the mayor's license status was investigated Friday morning in response to a question from Wampler, Fulnecky's attorney.

"(T)he answer is yes, he was and is licensed," she said.

Those Internet allegations come as fighting has increased between groups supporting or opposing certain council members.

In recent weeks, Internet arguments and suspicions stated by Stephens' detractors reached Fulnecky. She made a public statement Wednesday contending the mayor misled the public about his role in the ACLU lawsuit.

Fulnecky said she believed the mayor was aware the suit was coming and may have encouraged it — even inadvertently.

The mayor denied any devious behavior and expressed surprise at being blindsided with what he called a false accusation.

Stephens maintains he didn't know the American Civil Liberties Union was preparing to file a lawsuit Monday, the same day council's Plans and Policies Committee received his letter asking to review the law.

Stephens said he was aware a lawsuit was possible because City Attorney Dan Wichmer had said during a previous council meeting that the city was vulnerable to litigation, and because news outlets reported in September that organizers of the Free the Nipple movement were talking to the ACLU about a suit.

Timeline of events

April 7: Kristi Fulnecky is elected to a general council seat with about 65 percent of the vote. Fulnecky had raised and spent far more money than candidates in any other council race. She raised almost $84,000 and spent all but about $2,000 of that amount.The next four biggest spenders recorded about $81,000 in expenses -- combined.

The next several months: Fulnecky speaks out often for eased restrictions on businesses and supporting conservative social issues.

Aug. 28: City officials contact Fulnecky regarding her business and lack of a license.

Sept. 14: City Council votes 5-4 on a stricter indecent exposure ordinance. Fulnecky was among its supporters.

Oct. 14: Fulnecky emails Finance Director Mary Mannix Decker "asking about the basis for the calculation of the license tax."

Oct. 26: City Manager Greg Burris receives an incomplete license application and check from Fulnecky.

Oct. 26: Mayor Bob Stephens sends a letter to the Plans and Policies Committee, on which Fulnecky serves, asking the group to review the ordinance.

Oct. 26: The ACLU files a lawsuit challenging the law.

Oct. 27: Letter is mailed to Fulnecky asking for more information and payment of the license fee with a 10-day deadline.

Oct. 28: Fulnecky responds with full application and fee payment.

Oct. 28: Fulnecky makes statement questioning Stephens' involvement in the ACLU lawsuit, including that he may have encouraged it.

Oct. 29: Stephens denies knowledge of the lawsuit when he sent a letter asking for review.

Oct. 29: City Council members send letter to the mayor asking for review of Fulnecky's business license issue.

Oct. 30: Mayor announces a judge will review the case and determine if Fulnecky can keep her Council seat.

The charter section that Fulnecky allegedly violated

Section 19.15: No person shall be entitled to hold any office or employment who is in arrears for any city taxes.

Mayor Bob Stephens' news conference