Julian Beard

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….