JEFFERSON CITY - A former Missouri governor has been indicted on federal misdemeanour charges involving misappropriation funds involving a quasi-government state insurance company.

Roger Wilson was indicted by a federal grand jury for misappropriation of funds while he was the CEO of Missouri Employers Mutual. He was charged with misappropriating $5,000 from the Missouri Employers Mutual Company that went for campaign contributions to the Missouri Democratic Party.

Wilson, a Democrat, was elected lieutenant governor in 1992. He assumed the office of governor for three months after the death of Gov. Mel Carnahan from a plane crash in 2000.

Colleagues of Wilson, a former Columbia school administrator who had served in the state Senate, expressed surprise and disappoinment at the indictment of a person who had enjoyed a solid reputation for integrity in the Senate.

"It is a surprise, and a sad one to those of us who know and like Roger. The real question is who put him up to this. This didn't come from Roger waking up one morning and deciding to start laundering money for the first time in his career," said lieutenant governor Peter Kinder. 

Rep. Chris Kelly, D-Columbia, served with Wilson in county government and several state capacities called the indictment a "tragedy." He said, "I never saw the man be anything, but as straight as an arrow."

Wilson's indictment comes after his unexplained dismissal from Missouri Employers Mutual (MEM) that provides workers' compensation health insurance coverage for Missouri employers. The company was created by the legislature to assure insurance coverage for the state Workers' Compensation Program.

The company and state auditor have disagreed as to whether the company is a governmental institution or a private company exempt from state laws governing government agencies.

The indictment charges Wilson approved charging MEM for $5,000 in legal bills that actually were to reimburse a MEM board member -- Douglas Morgan, now deceased -- for a contribution he had made to the Democratic Party.

After a recent state audit questioning the financial activities of the company, legislators have filed bills to sell off or privatize MEM. 

State Auditor Tom Schweich charged there were expenditures "considered excessive or unreasonable for a public sector entity."

Schweich's report found that MEM had spent lavishly on certain expenditures including excessive severance checks, expenses-paid trips to Hawaii and suites at sporting events.

Following the indictment, the sponsor of one of the bills to divorce MEM from state government -- Sen. Jim Lembke, R-St. Louis County -- "My biggest surprise is that he was in the role [of CEO] to begin with." He added that, "Their current CEO has extensive background in the insurance business and there really hasn't been a question of how beneficial they have been to the marketplace." 

While legislation dealing with MEM is still stuck in committee in the House, Senators gave initial approval last week to a measure that would create a five member panel with the sole purpose of investigating MEM.

MEM is a Columbia-based company that was created in 1993 by state statute as a way to provide Missouri employers with easily obtainable and relatively inexpensive workers' compensation insurance. Since the company receives a federal tax exemption for being a public entity, MEM has accumulated a surplus of more than $160 million and maintains a 16 percent market share of workers' compensation insurance in Missouri.

If convicted, Wilson faces up to six months in prison with possible fines that are still to be determined. He is the first Missouri governor to be indicted in at least the last half century.

Along with Wilson, St. Louis attorney Ed Griesedieck was also indicted by the grand jury on the same charges.

Griesedieck had his St. Louis based law firm, Herzog Crebs, make a $5,000 contribution to the Missouri Democratic Party and then bill MEM for the money. The $5,000 was hidden within legal bills submitted to MEM. Wilson approved the legal bills, which included the $5,000 in the bill that served as a reimbursment for the contribution made to the Missouri Democratic party.

Wilson did not return a phone call for response.