Julian Beard

Commerce Lexington falling on hard times? (Not if Doug Martin has anything to F-ing say about it)

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April 11, 2011

Last Thursday the Herald-Leader reported on the new draft report from the cut-and-paste consultants at Angelou Economics.

In their disgraced report, one of Angelou’s few original recommendations was to expand the reach and power of Commerce Lexington. After ProgressLex outed Angelou’s bunk report and Angelou and Commerce Lexington came under increased scrutiny, Angelou went back and added into this new draft some language reccomending that the Mayor of Lexington be in charge of the city’s economics. (A radical thought.)

Bob Quick, head of Commerce Lexington, praised the new report as “aggressive” and “forward-looking.” And then he implied that to carry the report out, the city would have to give Commerce Lexington more money.

And there was also this:

AngelouEconomics also provided a draft assessment of Commerce Lexington’s performance compared with peer cities.

Commerce Lexington’s economic development budget of $1.2 million is below the median $1.7 million of a benchmark group that includes Asheville, N.C.; Louisville; Northern Kentucky; Austin, Texas; and Colorado Springs, Colo.

According to Angelou Economics, “Commerce Lexington’s 41 percent public funding is the third-highest of the benchmarked regions,” but the number of private investors is the second-lowest, at 125.

Hmm… 41% public funding.

With the city facing a $25 Million budget shortfall, Mayor Gray — who on Tuesday will deliver his budget address — is likely to demand greater accountability from outside agencies working with LFUCG and funded by LFUCG.

So yesterday, the Herald Leader took a closer look at Commerce Lexington’s relationship with the city:

The role of Commerce Lexington — which has received $2.6 million in taxpayer money for economic development in the last five years — is about to change.

In recent years, the local chamber of commerce organization has guided local economic development efforts as the city took a largely hands-off approach. Commerce Lexington, which says its role is to market Lexington to businesses, provides limited public information about what it does with that city money.

The leaders of Commerce Lexington have good reason to resist calls for transparency from the Herald-Leader given the paper’s recent history of exposing wasteful spending at the Airport, the League of Cities and other publicly funded organizations… so when the paper (Ms. Janet Patton leading the charge) tried to dig deeper into Commerce Lexington’s finances… well:

It is less than clear, from documents recently obtained by the Herald-Leader, exactly what the city gets for its Commerce Lexington investment, which grew from $50,000 a few years ago to more than 10 times that under former Mayor Jim Newberry.

Commerce Lexington maintains that because less than 25 percent of its overall budget comes from public money, it is not subject to open-records laws. The group declined to make additional documents public or to disclose how thousands of dollars in travel money is spent.

As we discussed here last month, Commerce Lexington’s most recent available IRS 990 Form provides some insight into the group’s finances and a stroll through their website paints a nice picture of their private sector funders (you know, local small businesses like Wal-Mart and JP Morgan Chase).

This publicly funded private group of big businesses parading as protectors of small business works actively to lobby government (local, state and federal) to dismantle collective bargaining and other union protections, to break down federal regulations on the coal industry, and to stifle any progress toward real health care reform.

So now Commerce Lexington is unhappy because Mayor Gray is likely to cut the taxpayer funding they are so dependent upon. Gray is likely to backseat Commerce Lexington’s role in the city’s economy… which is huge since under Mayor Newberry, the role of economic development was almost entirely outsourced from city government to Commerce Lexington.

Let’s look back at Mayor Newberry’s innaugural budget. Upon being elected (perhaps as a thank you to his good ol’ boy network), Newberry vastly expanded the role of Commerce Lexington in city planning:

I want to emphasize a few steps designed to enhance our economic development efforts:

Commerce Lexington

First, LFUCG has entered into a services agreement with Commerce Lexington in the amount of $661,500 – a 631% increase over last year’s adopted budget. Through this agreement, we will fund most of our business recruiting efforts. 

Or, put another way:

It’s not clear how much that funding will be slashed under Gray or what steps, exactly, he will take, aside from telling the paper that he expects to be much more involved in the economic decision making of the city than, say, the previous laissez faire Mayor (aka, he who excused the airport and KLC funding frauds).

What is clear is that some of the most powerful members of the City Council are taking a vocal stand against the usual Commerce Lexington blank check — including Vice Mayor Gorton, At-Large Kay and the one guy you really don’t want on your ass, the Council Bulldog Mr. Julian Beard.

Not all council members are upset… cue up an F-Bomb of surprise because…

But council member Doug Martin said reducing economic development spending is not the answer.

“I’m a supporter of the public-private partnership,” Martin said. “I think it’s not whether we need to cut it; it’s whether we need to quadruple it.”

No F-ing Way! Doug Martin wants to give them more F-ing money! Get the F out of here!

No… seriously, get the F out of here and go read Ms. Patton’s full Sunday report on Commerce Lexington’s dire straits if you haven’t already. Nothing will tear at your heartstrings this morning more than yet another protector of big business interests whining and complaining about losing taxpayer dollars.

Hmm… Dire Straits. Money for nothing. That ain’t working.

[You can explore some of Angelou's findings, reports and data here.]

Big endorsement day for Jim Gray (VIDEO)

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October 12, 2010

We all knew that Teresa Isaac was going to endorse Jim Gray this morning (worst kept secret ever), but the supporting cast there to endorse him was pretty impressive, as well. Current council members Andrea James and Julian Beard (!) were there. Former council members Jennifer Mossotti and Dick DeCamp. Former Vice Mayor Ann Ross. Former Mayor Foster Petit. And former foe in 2002, Scott Crosbie.

Here’s Teresa Isaac telling the crowd why Lexington needs Jim Gray as its next mayor (and a funny interaction with Crosbie):

Here’s Crosbie introducing everybody on stage (including all 4 candidates from the 2002 mayoral race):

And here’s Jim Gray:

Along with the endorsement of the city workers, firefighters and police, and a big swing towards Gray in the most recent poll, it’s pretty clear that Uncle Mo is on Gray’s side right now.

Teresa Isaac, Julian Beard, Scott Crosbie, Dick Decamp… ALL endorse Jim Gray for Mayor

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October 12, 2010

All four 2002 Mayoral candidates together on one stage… follow along with Joe via that thing the kids do.

JOE UPDATE: Video coming soon.

August 9th LFUCG special investigation committee meeting

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August 10, 2010

Linda Blackford’s write up is here. Allow me to fill in the color.

OK, here were the big three bombshells:

1. Patrick Johnston claims that Bill Hamilton and a couple of KLC employees invited him to lunch in March of 2007. They told him that Mayor Newberry wanted to hire KLC, and spoke of placing him on the board if they were hired. Yes, this KLC and Hamilton. Ahem:

2. Patrick Johnston claims that Logan Askew asked him to modify his executive summaries on the insurance bid of KLC in a way that made their numbers look better. He claimed that the final numbers matrix given to the council was unethical. Johnston eventual stopped fighting, because it was a lost cause fighting with Askew on this matter.

3. Logan Askew revealed that Jim Newberry top adviser Joe Kelly tipped him off that he was being investigated by someone within the government in Fall 2009, which led to Askew getting Johnston’s fraud reports from Bruce Sahli by an open records request. The documents given to Askew were redacted to matters involving himself, but named Patrick Johnston as the author of the allegations. The question remains who tipped Joe Kelly off to this, but I think you can do the math here. This is especially mind-boggling because Sahli has denied these documents for so long by passionately defending the anonymity of the person who fills out the fraud assessment surveys. Yeah, not so much…

So those are the big 3 from yesterday, as Patrick Johnston finished his questioning and Logan Askew is set to continue next Monday.

Here’s all the the other drama from yesterday, from the top:

Logan Askew walked into the small 5th floor conference room flanked by two attorneys from Lexington’s most powerful law firm, Bill Lear and David Rouse. You could almost hear the Vader theme.

Patrick Johnston was up first taking questions from Crosbie about Lexington self-insurance policy, the rules set out for LFUCG in 1987 and vehicle insurance. Johnston then went into the city hiring Collins and Co. in FY 2009 to adjust property claims, which he claimed was duplication of services for the city. He also claimed that the Law Department changed how workers comp claims data was shared with Risk Management in 2008, as Collins & Co./KLC would not share financial data that RM would enter in as they used to, rather they would give simply show RM the bill long after the fact. But he did find certain claims by Collins to be abnormally high, but he was now out of the loop by this point.

He spoke of a brief meeting with himself, Bill O’Mara and LInda Rumpke on what fraud constitutes, but not the specifics of his fraud allegation that was supposedly confidential.

Also noted by Crittenden and McChord was a “2nd Mountjoy letter” in which they claim that while a bunch of Newberry’s administration was notified of Johnston’s 2nd fraud report, they did not receive the actual fraud reports themselves. Well, except for Sahli. And we know how Johnston’s name spread like wildfire after that.

Jay McChord then went into his line of questioning for the day, which consisted of “who committed fraud here” and “who have you been speaking to”? Johnston answered the first question after consulting his lawyer, saying that his fraud report spoke of fraudulent actions within government but did not specify an individual with fraud. as for the second question, Johnston said he spoke with Crosbie after his job had been eliminated, and that he had spoken with his staff in back from the time that he submitted his allegations. McChord then asked how the Herald Leader got a hold of his emails, and he said he did not give them and has asked the Herald Leader to find out who did turn those over. McChord also had a line of questioning that tried to paint Marsh as a horrible incompetent insurer, that Johnston batted away. I assume this will be a further strategy of team Newberry, painting Johnston as beholden to a big bad insurance firm, and that’s why he had it out for poor KLC.

He was then questioned about the consultant hired by LFUCG, Management Partners, which decided to break up Risk Management and eliminated his job early this year. He says he was never given the opportunity to provide any feedback on their recommendations.

Johnston also claimed that KLC would not unbundle their costs/services/numbers, even though Johnston asked them to do this repeatedly in 2007 when the bid occurred. Johnston voiced his concerns to Askew that their behavior on this was a red flag on how they might behave in the future, but Askew dismissed this. It was at this point that Johnston said he became submissive to Askew, as his concerns were being ignored and it became obvious that folks were hell bent on KLC (my words). Johnston also said that his concerns about conflicts of interests with KLC were included in his executive summary package on the bid, but were taken out.

Johnston also said that he had no meeting with Sahli in 2009 about his fraud report that was now under review by him. Johnston told him to expect it just before Mountjoy sent it to him, but Sahli never asked Johnston to provide him with information before dismissing his allegations.

Under questioning from Gorton, Johnston said that he also mentioned in his fraud report a concern of institutional fraud, as there is a lack of disclosure forms from vendors. Myers asked why he didn’t follow up after that, and Johnston said no, because he was already fearing for his job.

Finally there was talk of a June 19th 2009 memo about KLC placement and fees, and an administrative aide (Willy Fogle?) asking him about the memo on behalf of two anonymous council members. I haven’t seen or heard about this one, so I’m not entirely sure what this is all about.


Then it was time for Logan Askew, flanked on the left and right by his high priced lawyers.

Logan said he wanted time for an opening statement and went right into a voluminous sob story. He said he’s always appreciated his job and role within LFUCG, and he’s never had the impression that he wasn’t respected by certain council members until now. He said this entire investigation has brought “personal hardship” to him and his family. He told us the horror story of his 18-year old daughter getting asked by one of her friend about seeing her dad’s name in the paper, which caused at least 7 people in the room to catch the vapors and collapse onto their fainting couches. There was not a dry eye in the house. (he even brought his wife and kid to the meeting for full effect). He said that members of this committee have said disturbing things about him, and that he’s never engaged in fraud. He said that he’s here to give the facts.

Logan Askew is my Alpha Dog of the Week.

Askew opened under questioning from Crosbie about what a horror “look backs” are when it comes to insurance bids, saying it is unethical to get a lower cost for services, I guess? Not exactly sure what his logic was here.

Then Crosbie asked him if he’s ever seen the fraud report, and Askew said that he’s seen a “portion” of it. Crosbie asked “what portion”? Askew then, (as I mentioned in #3 at the top of this post), went into getting it from an open records request, as Newberry’s adviser Joe Kelly tipped him off on the investigation last fall. He got the portions that mentioned him, and also the identity of the author as Patrick Johnston. Lawless asked him how Kelly found out about that, and Askew had a long pause, eventually saying that she should ask Joe Kelly that question. Lawless said she was disturbed that this supposed confidential document got to Askew with his name on it. Askew said this was perfectly fine, since you can ORR anything that you are named in. Judge Crittenden then stepped in to say “so you’re saying that the Mountjoy papers aren’t really confidential if they name someone in government”? At which point, Askew hemmed and hawed a bit, before Lawless cut in and said “no wonder people in government are terrified to fill these forms out”, and “I wonder why he’s the only one that’s ever filled this form out”.

McChord then provided the unintentional humor, jumping in to say how this sounds like a flawed law. You see, nobody actually broke any rules, and this is one of those things that “deserves a hard look” later on so we can improve them. In other words, Newberry’s strategy for dismissing everything the auditor or committee finds here by saying we just need to tweak procedure and nobody actually broke these “flawed rules/procedures”, and such.

Askew them spoke up and asked the committee for Johnston’s first fraud report. The committee explained that they couldn’t just give him the document, and Diane Lawless jumped in with the line of the day:

“Ask Joe Kelly for it”

That’s just fun.

In between this talk of Askew getting a hold of the fraud report was some more talk of Marsh. McChord asked a line of questioning on “look backs”, then asking the oh-so loaded question of whether this constitutes “bid rigging”. Askew said golly I don’t know, but then went into a “hypothetical” example of someone helping out a “good friend” who works at an insurance company by letting them bid lower so they can get a contract. He said that doing so was not appropriate to do with taxpayer money. Irony flashing sirens went off all around the room at this point.

At one point when referring to Patrick Johnston’s concerns about KLC/Hamilton, Dawn Angarone stood up in the back of the room and wanted to speak, but she’s up for questioning later. She said she wanted “the truth to come out early”. Fascinating. We’ll hear from her eventually.

Crosbie then turned around McChord’s question of Johnston by asking Askew if he’s spoken with any committee members or about the work of this committee, or if he’s mentioned this committee in any of Newberry’s Monday morning meetings. Askew answered no. Sirens!

Under questioning from Lawless, Askew said the only contact with the outside(?) auditor during an investigation was in 2008. He answered his questions and never heard back from them. Mountjoy never contacted him in 2009, he says.

The meeting ended with all of the Joe Kelly drama, and they suspended the questioning of Askew until next Monday.

Afterwords, Askew’s lawyer Bill Lear went up to Julian Beard and tried to convince him that once he hears the full story from the staff, he will know that fraud wasn’t committed. He said that all possible information might not have been presented to Council, but this doesn’t legally constitute fraud.

Oh, and then word spread like wildfire that Bruce Sahli had just sued George Myers. Yeah. I’ll have more details/verification of that asap.

So what we have is KLC doing their sweet-talk routine to Johnston in 2007 (in which they say that Newberry is already on board), then Askew telling him to leave out information that wasn’t KLC-friendly to the council before they approved KLC.

And, of course, that certain people who having been denying documents based on “confidentiality” apparently didn’t care so much about that in the fall of 2009. And not only did they know all about Patrick Johnston blowing his whistle, they decided to get rid of him shortly thereafter.

Fun stuff. To be continued MOnday at 2:00….

At the circus, with Doug Martin

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July 2, 2010

Well, not since a red-faced Ben Chandler angrily poked me in the chest in 2007 have I been confronted with such a case of blogger-induced hysteria from an elected official. Well, actually Doug Martin was never elected (as he was appointed by Mayor Jim Newberry for his seat), but you know what I mean.

As the Herald Leader and I told you last night, LFUCG 10th District Councilman Doug Martin completely flipped out and dropped about 15 F-bombs on me in front of several onlookers after yesterday’s special investigation committee. Vapors and fainting couches, all around.

Since all of the major work of the committee was done in closed session while all non-committee folks waited in the hallway for 90 minutes, there’s almost nothing for me to report on in terms of progress with the committee’s work.

What I can report on, however, is Doug Martin humiliating himself both during and after the meeting. So let’s just get into that, shall we?

After the closed session was over and we were invited back into the conference room, Doug Martin was suddenly sitting at the table with the committee members. Which was odd of course, since he first eagerly volunteered to be on the committee when it formed, then made a public spectacle about leaving the committee in order to discredit it, and hasn’t shown any interest in their work since. But there he was, sitting quietly while the members went over a discussion of what constitutes “work papers” of Mounjoy.

But after they moved past this, George Myers let Doug Martin speak. And he opened up a ginormous can of Whine. He was crying about the fact that they didn’t let him into the committee members-only closed session. Even though he isn’t on the committee, and dramatically left the committee, he now suddenly wanted to be privy to it’s closed session. Myers then had to inform him that this is what the council voted on unanimously, also noting that Doug Martin’s amendment to have all council members be committee members was defeated when Martin was the only person to vote for it. It was one of the most sad and pathetic displays of whining I’ve ever seen by a grown man.

But he wasn’t done there. He also made a strange and incoherent complaint that the committee didn’t set a closing date for itself, and therefore they would be acting illegally if they continued. Myers calmly read back to him what the council had voted on for the committee’s duties, how the July 6th report of the committee was explicitly described as “interim”, not final, and how they were given the task of investigating this until they could come to a conclusion about what happened. This did not deter Martin, as he kept saying the same thing over and over again about the committee breaking the law. Myers continued to calmly restate what the council voted for, and continually had to repeat to Martin that if he wanted to change what the committee’s duties were, he was free to bring it up in the council meeting that night or at another time.

The most humiliating part about this for Martin is that nobody had his back. Judge Crittenden put him in his place a bit at one point, which elicited nods of approval from even Jay McChord. And this was noticeable, because throughout most of the time Martin was whining, McChord had his head in his hands with his eyes closed, wincing. Martin continually reached out to Feigel to back him up, but she was having no part of it. KC Crosbie just looked like she was in awe of what she was witnessing. And Beard, of course, wasn’t taking any of this shit. As I was live-tweeting it, I explained all of this as the train wreck was happening in front of me. I called him a clown, because he was acting like, well, a clown.

After Martin had enough with the members ignoring his grand wisdom, he grabbed his papers and stormed out in a huff, with everyone else staying in the room as the members ironed out a few details before they adjourned. Right before they officially adjourned, Martin showed back up in the door frame, where he was giving me a death stare from across the room. He had apparently gone back to his office that was 20 feet away to read what I had written about his “performance” before the committee. Yes, it looks like somebody’s bruised ego was out for blood.

They adjourned, and the red-faced Martin made a beeline to me, beginning his tirade with this:

“Fuck off. Fuck you. Who the fuck are you? What the fuck is wrong with you? Fuck off. Fuck you.”

Oh, but that was only the beginning of the fucks, I assure you. He then went on to mock my state of poverty, explain to me how he was the only one in the room that cared about the law (think Walter “mark it zero!” in Lebowski), and say “fuck you” about 8 more times. Those last 8 were probably because I was laughing uncontrollably at him the entire time. By the end, I just told him to look at himself in the mirror and stop humiliating himself, he’s had enough of it for one day and was completely out of control. He gave me the “I’m the only one who cares about the law and standing up to it” routine, to which I had to reply “you’re just one man who is fighting the system. You’re like Rand Paul!”. To which he gave me his final “fuck you” and stormed out for good.

So… when I call him a clown, maybe you can see why. After all, there are happy clowns, and there are angry clowns:

Video of Tuesday’s LFUCG work session drama

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June 24, 2010

On Tuesday, George Myers dropped a major dramabomb on the Lexington’s Council Work Session when he made a motion to place on today’s docket a vote to remove Dewitt Hisle as chair of LFUCG’s Internal Audit Board, due to his overwhelming conflict of interest and the odd behavior around the internal auditor. While the motion lost by a vote, Hisle would resign hours later.

But there was much more drama than that when the council discussed the motion, including KC Crosbie grilling the legal department, Feigel accusing Myers of politics and casting aspersions, Tom Blues jumping in to shill for Newberry, Julian Beard going all Bunning on Newberry, and Ed Lane sounding suspiciously defensive about his work on the internal audit board.

Oh, and here’s all the fun on video, in 4 parts. Enjoy:

Among the higlights:

Myers claims that Sahli’s excuse for canceling the internal audit board meeting earlier this month is different than what he’s saying now, implying that they’re, uh, not keeping their story straight.

Crosbie twists Newberry’s legal lackey Keith Horn into knots on when Sellars stopped representing LFUCG and started representing Bruce Sahli, also asking if he still represented LFUCG when he started leaking opinions to the Herald Leader. She asked who requested the auditor of public accounts to do an independent review and Mayor Newberry jumps in and says “I did”. Crosbie asks if it was him and not Sahli, and Newberry said he believed Sahli had some conversation with them as well, but he knows he did. Whoa.

Feigel and Lane shilled to the 9th degree for Newberry, accusing Myers of politics, while Blues jumped in early saying this was premature. Lane went on to cover for the board and also trashed the LFUCG special investigation committee, saying they weren’t qualified and the only people to listen to are the state auditors people.

Beard took on that last point by saying that he remembered this body voting unanimously to create that committee, so Lane should feel free to STFU. He told Lane if he’s looking for ways to knock the legs out from under this committee, it would be a shame. He said there has not been a political breath drawn in the committee and they’re just interesting in finding out how the process happened, and if fairness has been dealt to the individual(s) involved in this fraud report and anything around that. He said they have a mandate to go further, and certainly will.

Andrea James also stepped in and defended Myers, saying she sees absolutely no politics in this. She said that anytime a council member sees something on a board that doesn’t allow process to work, it is their responsibility to report it to the full council, which is exactly what Myers is doing. She said this is about transparency.

Peggy Hensen said that she would vote for the motion because this looks really bad, and Hisle’s position with Newberry’s campaign creates a definite conflict of interest.

Jim Gray recused himself from both discussion and the vote.

And do you know what really would have been fun? Diane Lawless was apparently out sick for the meeting, but if she had been there, the vote likely would have been tied 7-7. And you know what happens then? The Mayor has to break the tie… meaning Newberry would have decided right then and there whether his campaign’s treasurer was fired from the board or not.

Which would have been really fun.

Council meeting is tonight at 7:00… any more fireworks in store?

Newberry tells HL he’ll let Mountjoy release fraud reports

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June 23, 2010

As we saw in the special investigation meeting yesterday, external auditors Mountjoy Chilton Medley told the committee that it would need Mayor Newberry’s permission to release Patrick Johnston’s fraud reports, which the committee is now asking foe by 2:00 this Friday.

Will Newberry allow it? Don’t know, but he told the Herald Leader he would:

Mountjoy Chilton Medley said it would ask Newberry for his consent to disclose the information. In response to questions from the Herald-Leader Tuesday, Newberry said he would give consent.

“Mayor Newberry has always fully supported the release of the documents,” spokeswoman Susan Straub said Tuesday. “The document belongs to Mountjoy, which has previously promised confidentiality to the government employees they interviewed in the course of conducting city audits,” Straub said. “Mayor Newberry hopes that the document will soon be made public …”

First of all, lololol. Secondly, I wonder what Juliam Beard thinks about that:

“When people see extreme stonewalling, whether it be him (Newberry) or people who work for him, when they hear we aren’t having any luck getting the documents, they can start saying ‘what are they trying to hide?,’” Beard said.

Well, let’s just wait and see if we see those on Friday. Vegas money says no.

June 22nd LFUCG special investigation committee meeting

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June 22, 2010

Lexington’s special investigation committee looking into the Patrick Johnston fraud allegations met again this morning at 9:00. The order of business: to go over the refusal of Internal Auditor Bruce Sahli to turn over the fraud reports in question, and also go over the requested documents turned in to the committee that were due yesterday.

Here’s a rundown of the meeting:

Myers started the meeting by recapping Bruce Sahli’s refusal, then stating that they made a subsequent request on June 17th to the external auditors Mountjoy Chilton Medley to give the committee the fraud documents. He stated that Mountjoy wanted an extension to June 30th, as they wanted to “evaluate the requests” and also ask for the consent of Mayor Newberry to “allow us to disclose this confidential information” to the committee. Again with the “confidentiality” garbage… Johnston wants it out.

Here is a scan of the letter Myers sent to Mountjoy, and their reply:

They would jump back into what to do with Mountjoy later in the meeting.

Julian Beard stepped in and softly mumbled something about his disagreement with Sellars’s legal opinion in the Sahli letter, saying that the charter disagrees. K.C. Crosbie then chimed in and said that Sellars only quoted part of the agreement with Mounjoy, but withheld the part that explicitly stated that they are free to release a document such as this to a LFUCG committee. Hoo boy.

Before Beard and Crosbie jumped back on to Sellars’s weak argument, Myers and Crittenden (committee’s outside counsel) went over the legal basis of his claims. Myers pointed out that Sahli works for the internal audit board (his boss according to the letter), yet the internal audit board has made no effort to advise him, as Myers in on the board and the chair hasn’t called a meeting since this issue was brought up (though they did suspiciously cancel one). Myers also asked about the precedent that would be set for any future LFUCG committees if they allowed Sahli’s ridiculous refusal to stand. This is where Crittenden unfortunately isn’t even close to being up to speed. More on that in a bit.

Beard then went back to his complaint over Sellars’s opinion on refusing to release the documents, which was absolutely blistering. He accused the Newberry administration of “stonewalling”, “cutting our legs out from under us”, and a reference to having to “run all around Robin Hood’s barn” to find what they needed (Google it, I had to). He said “this angers me, to say the least”. Beard kind of reminds me of Bunning when he gets angry. Go get ‘em, Julian.

Crosbie then went back and restated that Sellars selectively quoted from the LFUCG engagement with Mountjoy, not providing the Council with the part which said they could turn over the document to committees such as this one. She then went on to state how conflicted the law department is, as their story on whom the law department and Sellars represent has shifted over and over again over the past month. She said that the committee needed to look into how Sellars was procured for Sahli, and the process of how they released information to the media.

This is where Crittenden was asked for his legal opinion and things got frustrating. Crittenden (as he told the committee in advance) is on vacation this weekend, and was on the phone with the committee today. He said he didn’t have answers to Crosbie’s questions, and would have to look it up when he got back. Newberry’s team has an army of taxpayer funded lawyers working for him, and the committeee gets a retired judge working by his lonesome, whenever he can spare the time. Ugh. He also seemed to again be a bit naively optimistic that Mountjoy would turn over the fraud documents, just as he and Myers had been with Sahli last week.

Myers then commented that commented on how odd this situation is, since the committee should be able to use city lawyers, yet the city lawyers consider them a “3rd party”, also questioning whether they should have chosen the auditor’s outside counsel, as the internal audit board was never consulted on this.

Gorton stepped in to ask Crittenden about Sellars’s reference to the Council being a “3rd party”, and wanted to know if she was actually part of government. Crittenden said this was a baseless claim, as it is their duty to be the policy making body of LFUCG. Gorton replied that she’s glad to know that she’s actually part of the government. Shameless grandstanding.

Returning to Mounjoy, Crosbie made a motion to ask Mountjoy to give the committee the fraud report documents by 2:00 Friday. The motion passed unanimously.

Myers then went on to go over the documents that were given to the committee by the deadline yesterday. Johnston, Rumpke, Logan Askew and Brian Marcum (Director of the Divsion of Central Purchasing) where each sent letters requesting:

1) Emails between Patrick Johnston and Logan Askew regarding the proposal for liability insurance that was ultimately presented to the Council on September 11,2007. This should include, but not be limited to, emails dated August 17, 2007 as referenced in the Lexington Herald-Leader on June 3, 2010.

2) The Requests for Proposals, and the submitted proposals for liability insurance services ultimately awarded to the Kentucky League of Cities in September, 2007, and any completed analysis of the same.

3) Communications between the Urban County Government, Marsh, and the Kentucky League of Cities concerning the transition to KLC insurance in 2007.

Scans of these letters (and Rumpke’s response) are below:

As you can see, Rumpke said that she did not have this information. Marcum also did not turn over this information claiming he did not have it, though I don’t have a copy of the letter. According to Myers, Askew provided all three, as did Johnston.

Myers also asked Sahli to provide additional information:

I) Any written communication to and from the Internal Auditor regarding the completed Fraud Risk Assessment Questionnaire completed by an employee in the Division of Risk Management in 2008 and 2009.

2) Any written policies and procedures of the Internal Audit Unit that provide guidance for the office’s review of fraud allegations, special requests, etc.

Here is that letter, and Sahli’s response in which he explains why he is denying #1, above.

I’ll have much more on this letter later.

Sahli did provide #2, above. Yet he stamped it “confidential”, even though this could in no way be classified as “confidential”, as it is an open government document pertaining to the function of the Internal Audit Board. The members all agreed that just because you put a “confidential” stamp on a pile of papers, it doesn’t make it so.

They set the next meeting for 8:00 next Tuesday the 29th and adjourned.

More analysis of what went down in this meeting to come, either tonight or tomorrow morning.

UPDATE: In the Council Work Session this afternoon after this meeting, George Myers called on Internal Audit Board chair Dewitt Hisle to resign. His motion failed by one vote. Bigtime drama. Read about it here.

June 14th LFUCG special investigation committee meeting (2nd attempt)

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June 15, 2010

(my second attempt at this, as Blogger decided to delete my first post)

The Lexington council’s special investigation committee met today for the first time with their newly appointed outside counsel, retired Franklin County Circuit Judge Roger Crittenden. Here’s his bio from when he was inducted to the UK College of Law’s Hall of Fame back in 2007:

A highly respected judge of integrity, Roger L. Crittenden has given a lifetime of service to the Commonwealth and to the UK College of Law. After three years of service in the U.S. Army including a tour in Vietnam, Crittenden graduated with the class of 1975 and launched his career in public service at the Kentucky Cabinet for Human Resources and the Kentucky Council on Higher Education. In 1980 he was elected as Franklin County District Court Judge where he served for 12 years before being elected as Franklin County Circuit Court Judge in 1992. He retired in 2006 and is Senior Judge of the Franklin Circuit Court.

Committed to education, Judge Crittenden has served as chair of the Circuit Judges Association Education Committee and is a former board chair of PUSH Infant Pre-School. Judge Crittenden also served the UK College of Law as an adjunct writing instructor for 26 years. He completed his final semester of teaching this spring and was honored by having one of the legal writing groups – three of which are titled after figures such as Clay, Cardozzo and Marshall – named after him.

Three of his notable decisions as a judge were ruling against the University of the Cumblerlands in 2008, against the 2% tax on HMO’s in 1993, and against pharmaceutical giant AstraZeneca in what I assume was one of his last cases in January of this year. From what I saw of him today, he seemed sharp and fair (for whatever that’s worth).

Diane Lawless opened the meeting by asking a question to clarify Jay McChord’s threat (and it was a threat) in the last meeting on retribution against someone if the committee finds that no fraud or wrongdoing occurred. She wanted to know who he was talking about exactly, Johnston or fellow council members. McChord didn’t bat an eye, answering that he didn’t know, then going on to say that council members have publicly mentioned the fraud allegations in chamber, and if there’s nothing there they must be held accountable. Painfully obvious that he was directing this towards KC Crosbie, just as internal auditor Bill Sahli publicly called on Crosbie to apologize for mentioning this before the council in late May.

(and on a completely unrelated but funny note, Lawless and McChord were wearing matching pink)

Gorton and Beard stepped in to say that this statement kind of unnerved them, and Crittenden added that the committee in no way has the responsibility to hand out some kind of punishment, whether fraud and wrongdoing is found or not. They moved away from the matter after that.

The committee then went on to discuss how they will handle requesting documents, confidential documents, and how and when they will use their subpoena power.

Before they went on to discuss the specific documents they were requesting, two significant matters came up. First, Myers noted that it was important that the committee look into the due process of the internal audit board, as he wanted to know why he, as a member of the board, was not notified about the original fraud claims, yet apparently others were. Crittenden noted that the rules for when something does or doesn’t go before the board was in the scope of their work.

Lawless then noted that she and other members of the committee have received an unsolicited flood of information on these allegations from people since this matter first exploded in late May. She said that due to McChord’s threat in the last meeting, she sought legal advice from a lawyer to make sure that her receiving this information in no way made her liable from some type of political/legal retribution. She wanted to openly discuss what she is supposed to do with this information, in terms of bringing it before the committee or not. Both Myers and Crittenden seemed to agree that while unsubstantiated information shouldn’t be used by the committee, members were free to share this information so that they could all officially request any relevant information though official channels (using the where/when of the information provided).

Next, the members went through the specific documents that they were requesting. The first documents requested are to be Johnston’s fraud assessment reports. They are asking the internal auditor for these documents, and gave a Wednesday deadline for them to be produced, or else they will use their subpoena powers to obtain them. They essentially concluded that the internal auditor is a separate entity from the mayor’s administration. We’ll see how that goes.

The other documents requested are the RFP’s on KLC, relevant emails to the matter, and relevant information on the process of the internal audits. They set a Monday June 21st deadline to receive this information, and will have their meeting the next day at 9:00.

If any of the information they receive is confidential, they will be housed at the county clerk, where committee members will be free to read them, but not to take away copies.

Crittenden said that if any information isn’t provided, the committee will have the power to subpoena for it. Myers said that he doesn’t imagine they’ll have this problem, then looked in the back of the room to Shaye Rabold for some sign of agreement. Shaye basically said she didn’t know anything and to leave her out of it. A little tense.

So that’s it until the next meeting 9:00 Tuesday morning June 22nd. Linda Blackford’s story on the meeting is up here, too.

Also of note is Blackford’s other story out this afternoon. Whereas George Myers publicly stated that he hoped the Newberry administration (and others) would not attempt to try this case in the media, Newberry’s press secretary has already sent little attacks on Johnston’s credibility to the Herald Leader. Shocking that Newberry would do that, I say. Shocking.




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