Ex-Lawmaker acknowledges state investigation, denies any wrongdoing

As a new and controversial Nebraska tax plan is formally rolled out, a former state lawmaker remains accused of breaking state rules while pushing the proposal.

As News Channel Nebraska first reported, former State Senator Jim Smith is facing numerous questions, many stemming from a series of emails involving Smith, the Executive Director of Blueprint Nebraska, and a top aide to Governor Pete Ricketts.

According to government watchdog Common Cause, Smith failed to register as a lobbyist as he promoted Blueprint Nebraska’s tax plan to two fellow Republicans, Ricketts and State Senator Lou Ann Linehan, chair of the powerful Revenue Committee.

Backers of Blueprint Nebraska insist their tax plan, the so-called Tax Modernization plan, will mean more jobs and a growing economy, while critics argue it’s a tax cut for the rich paid for by the poor and middle class.

In April, Common Cause filed a formal complaint against Smith with the Nebraska Accountability and Disclosure Commission.

Officials with NADC will not confirm or deny possible investigations.  The Commission’s next public meeting is scheduled for September 10.

NCN asked Linehan if she’s been contacted by NADC:

Sen. Linehan: I don’t think anybody called me; I know that’s not the best answer.

NCN's Joe Jordan: Do you think you were lobbied by Jim Smith?

Sen. Linehan: No, there’s no bill. Jim Smith and I are friends, we talk frequently. We’re aligned on tax policy—neither of us likes taxes.

NCN's Joe Jordan: But lobbying starts before there’s a bill, right?

Sen. Linehan: I don’t know. I don’t really understand what the rules are. I’m not a lobbyist.

Linehan adds that Smith never asked her to do anything.

According to an email obtained by Common Cause and examined by News Channel Nebraska, on November 30, 2020 Smith emailed the governor’s office noting, ““I have met with Sen. Linehan in recent weeks and she has expressed a strong interest in a tax modernization strategy…”

Common Cause’s complaint cites other emails between Ricketts’ office, Blueprint Nebraska and the conservative American Legislative Exchange Council between January and December of last year.

On October 9, 2020 Smith emailed Ricketts’ Chief of Staff Matt Miltenberger noting Ricketts involvement: “Matt, I wanted to send you the latest versions of the documents (Blueprint Nebraska’s Tax Modernization Foundation Report) we discussed with the Governor on September 24. I greatly appreciate the Governor’s input…”

Four days later Miltenberger responded: “Jim- We’ve printed out the final versions for the Governor. I’m sure he’ll have some thoughts after reading them. I’ll try to get them to you as soon as he and I have a chance to discuss.”

The emails go on to talk of corporate and individual income tax cuts, more sales taxes and two trips, one to Chicago and the other labeled “Sand Hills Flights.” Some of the information is redacted. One email from Miltenberger, Ricketts’ right-hand-man, finds Ricketts preparing for the Chicago meeting with an unnamed individual. Miltenberger writes, “I’d like to do a follow up call with the Governor and (name redacted) and potentially have the Governor (and three others) go to Chicago to meet with (name redacted)…” 

NCN has asked Governor Ricketts if he’s been contacted by NADC. So far, we’ve received no response. (Shortly after this story was posted a spokesman for Governor Ricketts told NCN, "NADC has not approached the Governor to discuss any matter.")

In April Smith told NCN, “I will fully support the Commission’s investigation process as they seek to determine if there is probable cause to believe that the alleged violation has occurred.”

On Tuesday, as Blueprint Nebraska unveiled the Tax Modernization plan, NCN spoke with Smith who denied any wrongdoing but acknowledged talking with state investigators. "I have had an interview with NADC," said Smith.

[See NCN’s complete interview with Smith above]

ALEC, which says it is an organization of state legislators dedicated to the “principles of limited government,” has been on Common Cause’s radar for several years. The watchdog group says it, “Remains concerned about the influence of The American Legislative Exchange Council (ALEC) on the Blueprint Tax Plan.”

While in the Legislature, Smith served as ALEC’s point-man in Nebraska, until taking the reins for Blueprint Nebraska a few years ago. He is currently listed on ALEC’s web site as a member of the organization’s “Private Enterprise Advisory Council.”

Linehan replaced Smith as ALEC’s Nebraska state chair.