Linda Gorton

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
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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.]

Jim Gray sworn in as Lexington’s new mayor

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January 2, 2011
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It was a lovely ceremony. Here’s the full speech and the Herald Leader’s write up. I’ll throw up the video once somebody puts it on the internet tubes.

Congrats to Jim, Vice Mayor Linda Gorton, Steve Kay, Chris Ford and Bill Farmer Jr. on their new jobs.

Mayor-Elect Gray sets course for Fresh Start

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November 6, 2010
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It’s a quiet Saturday, the football Cats are a game away from being Bowl Eligible, Tom Eblen has a good preview of the City Council working relationship between Gray and Vice Mayor-elect Gorton, the Spend and Spend Republican Party and their insurgent Tea Party compatriots are on the verge of making Captian Pork the head of the House Appropriations Committee and Lexington’s brand-spanking new Mayor put out a letter thanking his amazing team, the voters of Lexington, and Jim Newberry for, well… you can just read it.

Dear Lexington,

What a year! It’s been a long but inspiring campaign, and I’ve had the chance to talk to thousands of you across our city. In a surprising upset (to all but the fantastic volunteers and staff on our campaign!), on Tuesday we celebrated victory. The work now begins to give Lexington the Fresh Start it deserves.

I want to thank Mayor Jim Newberry for his service to our city and for a hard-fought, competitive campaign. Henry Clay once said, “Of all human powers operating on the affairs of mankind, none is greater than that of competition.”

It is competitive elections like this one that elevate the issues, that illuminate ideas, that confirm what’s remarkable about Democracy. Even though the campaign may have been contentious at times, I have high regard for Jim Newberry, and for the many voters who supported him.

I hope they’ll continue to be active and engaged. We need them to be. We need their ideas and initiative. Now that the election is over, we must work together to make Lexington a better place.

I want to thank all our volunteers that made this campaign’s success possible. Thank you for your phone calls, emails, facebook messages, postcards and texts. For walking door to door, phone banking at headquarters, and hosting house parties.

A special thanks to the FOP, Firefighters, Community Corrections workers and Civil Service Employees for their endorsements; I am humbled and I deeply appreciate the support you have given me.

While I can’t wave a magic wand and make step changes overnight, I will listen carefully, and my vow is to work hard every day to improve our great city and stand up for all its citizens.

Moving forward, I will need your ideas and support. Stay involved and engaged and together we’ll make Lexington a better place for all our people.

Thank you for all you’ve done to make our campaign successful, and for all you do for Lexington.

All the best,

Jim Gray

There’s a fresh breeze a-blowing through the Bluegrass.

Lexington’s city government is looking… pretty good

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November 4, 2010
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Lexington not only has a wonderful new mayor, but check out how good the new council looks.

If things went the wrong way Tuesday night, Lexington could have had 4 years of Newberry as mayor and Chuck Ellinger as vice mayor. *shudder*

Instead, we have Jim Gray as mayor and Linda Gorton as vice mayor (who should be great). Also, Bill Farmer Jr. replaces Cheryl Feigel in the 5th. Farmer is a bit of a wild card, but I’m pretty confident that he’ll be an improvement. Meanwhile KC Crosbie held onto her seat easily, and from all indications Chris Ford should be good in his first term in the 1st (though he’s got big shoes to fill following Andrea James). And Steve Kay on the council helps fill the void of Gray.

This means that all of a sudden the 4-person cabal of Ed Lane, Jay McChord, Kevin Stinnett and Doug Martin is looking mighty, mighty small and insignificant. Look forward to lots of impotent rage from these folks over the next 2 years, while Diane Lawless & Co. sit back and chuckle at their political misfortune.

The Southside Screamer may have won, but at least we’ll have lots of temper tantrums and pouting to look forward to…

…and that LFUCG city council that’s looking pretttty prettty pretty good.

Don Pratt Endorses Himself in the Herald-Leader

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October 27, 2010
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When the Herald-Leader endorses one candidate over others, the un-endorsed candidates are given space to respond. In the LFUCG Council-at-Large race, they endorsed Steve Kay and Linda Gorton and now Don Pratt has struck back!

On what he stands for:

For more business as usual, vote for any of four candidates: they are interchangeable. If you want change, vote for me and Linda Gorton.

While Lexington is broke, other candidates talk about pet projects, ways to spend more money that Lexington doesn’t have. I advocate ideas that might actually bring in tax revenue, such as legalization of medical marijuana and allowing farmers to grow hemp. Others are silent.

On what he represents:

The Herald-Leader endorses people who play its game, who, for show, join neighborhood associations, attend committee meetings, and bow down to the institutional liberalism that has dominated local government for three decades. I will make changes, unlike those who sat idly by while Kentucky American unfairly raised our water rates.

I don’t conform. I live frugally. I fill my living room with luggage for foster and adoptive kids.

The Herald-Leader will never endorse this non-conformity, which amounts to political independence, an attribute lacking in the other candidates.

Can Don Pratt squeeze out a victory on Tuesday? It’ll be fun to watch… and in the meantime, keep in mind that you will be voting for THREE CANDIDATES in the race, so… choose wisely.

Newberry may be losing polls and his cool, but he still has a bogus poll to tout

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October 25, 2010
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Shortly before the devastating Herald Leader/WKYT poll was released Thursday afternoon, Jim Newberry’s Bromanager sent out an email touting the wonderful news of a “poll” from the Lexington-Bluegrass Area Realtors showing him “up” 16 points. OMG rad!

Of course, this looked a little odd following the poll from the respected Mason-Dixon showing Gray up 4 points. In fact, one almost might think that max-out Newberry donor and WKYT general manager leaked the word of how awful their poll was going to be beforehand, so Newberry could tout the LBAR “poll” to spin the bad news.

But maybe that LBAR poll was legit?

Well, I got a hold of the numbers, so lets take a look at that, shall we?

Here’s their methodology:

Each of the two surveys had sample sizes of 300 respondents and was conducted on October 10-12, 2010 by SGS.

300 people? Oh boy, this is going to be fun.

How about their results? They polled Republican/Democrat support for state legislature candidates, as well as the US Senate race. Despite the poll having a 58/36 party advantage for the Democrats, they claimed that the residents of Fayette County (second most liberal city in this fair state) want a Republican legislature by a 42-37% margin. Odd…

And despite Mason-Dixon and cn|2 showing Jack Conway up double-digits in Lexington, LBAR found that Rand Paul was… statistically tied with Jack Conway. Tied. Odd…

As for favorable ratings, Jim Newberry’s was a net 16 points better in LBAR’s poll, and Jim Gray’s was 4 points worse. Odd…

In the Council-at-Large race, despite the fact that Chuck Ellinger pulled in only 17% of the vote in 2006, LBAR has him pulling in 41% of the vote, 14% more than the closest competitor, Linda Gorton. And despite LBAR loudly touting longshot fringe candidate George Brown placing in third (nearly doubling his vote from this race in 2006), what LBAR failed to mention is that he actually tied someone else for third, Steve Kay (the difference between the two that only one of them is a business shill). Odd…

So, this was the fine poll that Newberry was touting in an email sent out minutes before the Mason-Dixon poll showed Gray jumping ahead of Newberry by 4 points.

Take whatever meaning from this that you choose. (Newberry, for example, says this means that people love him because he’s never made a mistake and he’s awesome).

One more LBAR “finding” of note from their “poll”: In the 10th district it is Doug Martin 27%, Kevin Williams 15%, with 54% undecided.

Logic tells me two things. One, this means that Doug loses by 8 points.

Secondly, this new ad that Doug Martin is airing during the local newscast just isn’t going to work at all:

Lexington Council-at-Large candidates hitting the YouTube machine

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October 25, 2010
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Lexington’s local council races don’t have ads that compare with Aqua Buddha as far as entertainment value, but I’ll share some of the early entries that appear on the YouTube Machine.

Here’s possible Council-at-Large front runner Linda Gorton, being as calm and reasonable as usual:

Here’s a Steve Kay ad, which he probably has enough money to put up on the TeeVee. Unfortunately, this one isn’t as trippy as his primary ads:

The only other ad I can find on the YouTube is this one for shameless business shill George Brown. I’m not sure if this is an official video of his campaign, since it has a copyright claim in its info section. Which is funny, because if it is official, it’s breaking about 10 different laws, as I’m sure the owner of the Stevie Wonder and Michael Jackson catalog would agree:

Has anybody in Lexington seen any council race ads running on TV or radio? Please share.

August 16th LFUCG special investigation committee meeting roundup

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August 17, 2010
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The 5th floor conference room of Lexington’s city hall was jam packed again yesterday, as Johnstonpalooza continued with 4 hours of questioning for LFUCG Law Commissioner Logan Askew.

Here’s a summary of what went down at the marathon session:

Myers opened the meeting by sharing Bruce Sahli’s letter to the committee that stated he will not appear unless he is forced to by a court order. Yes, I know, shocking behavior.

Mountjoy also sent the committee a letter in response to Newberry’s letter last week, saying they will release the fraud reports if Johnston gives them a waiver. But as we will find out later in the meeting, they already have them. Back to that in a bit…

McChord made an “opening statement” of sorts, that basically mimicked Jim Newberry’s letter from last week, saying that since Johnston said he did not specifically accuse a person of fraud in his fraud reports, this somehow means that his allegations are meaningless and the committee should be dissolved immediately. Hope springs eternal…

Logan Askew then took the big chair, and Lawless asked him if the Stoll Keenan lawyers were representing him pro bono or if the city was paying for it. Askew said that he is paying for it. Lawless then asked what his lawyers are getting per hour, and David Rouse loudly objected.

This is fascinating considering the fact that Lear and Rouse charge about $400 per hour, which means that after 8.5 hours before the committee, plus the many hours compiling documents and preparing for his testimony, it is quite possible that Askew owes close to $20,000 already. That is, unless, he’s getting a discount from SKO. However, if he is getting a discount, that would violate the law, as

“No officer, employee or immediate family member of an officer or employee shall knowingly accept any valuable gift, whether in the form of service, loan, thing, or promise, from any person, firm or corporation which to his knowledge is interested directly or indirectly in any manner whatsoever in business dealings with the urban county government, agency of the urban county government, or constitutional officer by which he is employed, under circumstances in which it could reasonably be inferred that the gift was intended to influence, or could reasonably be expected to influence the officer or employee in the performance of his public duties

Considering this firm has been hired for legal work over the past few years by Logan Askew himself for eleventy thousand dollars, this certainly makes the exact rate that Lear and Rouse are charging Askew relevant. Has Askew already written them a retainer check? If so, for what amount? And are they being charged their standard rate, or at a discount?

Anyway, moving on…

Crosbie asked Askew about Johnston bringing up KLC’s conflict of interest with Collins & Co., but Askew claimed that Johnston never ever brought that up with him. Well, he didn’t recall, at least. So Askew is basically claiming that while Johnston brings up this conflict in his 2008 fraud report, he never mentioned it to Askew.

Askew then went into one of his many beefs with Marsh (insurance) during the meeting. He said he complained that Marsh did not give him a recommendation on whether to buy AIG or KLC in 2007. That’s when Linda Gorton chimed in to read from Marsh’s email that said that based on the city’s needs, AIG was the best fit. Gorton and Myers also noted that Marsh’s attachment to this email was not provided to the committee. Askew continued to say that Marsh didn’t provide a recommendation, because he disagreed with their characterization of the city’s needs. Myers and Gorton both asked for Askew’s response to this email, which (like the attachment on the aforementioned email) seemed to be missing from Askew’s packet of emails. Askew assured the Council that if it wasn’t in there, he would get it to them soon.

The discussion then went into the weeds of the insurance bidding in 2007, with Askew bringing up the following points: “We’re talking about something from 3 years ago”. “We were trying to compare apples to apples (why the numbers matrix changed)”. “We gave the Council more choices than they had ever received when it came to purchasing insurance”. “We could go back and ‘what if’, but this was the best that I can do”. His basic point was that if what was presented to the Council got changed around, he only did it to give the Council better information, not to tip the game towards KLC. There was a lot of back and forth with Lawless KLC bundling and having services added to their bid at the last second. As I said, in the weeds.

After the break, McChord went into a call and response session with Logan Askew that almost seemed scripted (but wasn’t!). McChord went into how much better Askew’s way of buying insurance and giving information to the Council was than how Johnston used to do it back in the Isaac days. McChord would say “what I’m seeing is..” and go into his opinion of how awful Marsh was and how much better Askew was than Johnston, to which Askew would pick up and elaborate on.

Then McChord asked how we know that Johnston isn’t making the story up about being offered a board seat with KLC by Bill Hamilton, after which McChord was silent, as he’d done his job for the day.

Askew was asked if he’d ever gone on a trip offered by KLC, or attended a lunch/dinner provided by them. Askew says that he went on no trips and always paid for any meals with them. He also said that Johnston never told him about the KLC board position offer.

Askew said that it was Bruce Sahli that provided him with Johnston’s fraud report after he filed the ORR in September of 2009 for it. You know, the one with Johnston’s name not redacted. Askew wouldn’t say if it was improper to leave Johnston’s name on it. Because that’s, like, totally up for debate and stuff. Askew also said that Sahli might have tipped Joe Kelly off to this info, but he wasn’t sure. He also said that he “could not recall” if Kelly told him what the investigation was about before he filed the ORR, and that Sahli never discussed the claims with him. Askew answered that he was not surprised by seeing Johnston’s name on it, just surprised by his “bogus claims”.

Then came a rather large event, as George Myers started his questioning. Earlier, he had asked if Askew had ever told anyone that he disagreed with Johnston’s priorities. Askew said that he could not recall such a conversation. Myers then asked him if he filled out a fraud questionnaire in 2008 discussing problems within an agency. Askew said that he could not recall doing so.

Myers then pulled out Askew’s 2008 fraud survey that he filled out. And handed it to him. Myers then preceded to hammer away at the McChord/Newberry argument that because Johnston didn’t directly accuse a specific person of fraud in his survey, that it was meaningless. Myers asked Askew if, on his fraud survey, he accused someone of committing fraud, or if he just listed potential allegations of fraud. He also asked if fraud was defined on this survey. Askew’s answer was basically the same as Johnston’s, as this is what fraud assessment surveys are for: giving anonymous concerns about potential fraud within a department to be investigated.

What’s also interesting is that Mountjoy apparently gave the Council false info, as they said that only one employee had submitted a fraud report (twice). Nope, I guess that makes two, no?

But Myers wasn’t done. He asked if anyone was given a copy of Johnston’s fraud assessment survey after the Spring of 2010. Askew said that he was “not aware of this”. Myers then asked if he was aware of Johnston sending an email to Linda Rumpke (Newberry’s Finance Commissioner) with his 2008 and 2009 fraud surveys attached and Askew was cc’d on. Rut roh. Myers gave him the email.

Apparently, Askew couldn’t view them on the cc. But Askew claims that Linda Rumpke had the fraud surveys right there in her email, but didn’t look at them. That’s right, didn’t look at them. Not interested!

So let’s recap. Newberry is demanding that Mountjoy release Johnston’s fraud surveys, even though all he has to do is ask his Finance Commissioner: “hey Linda, can you open up those attachments in your email and give them to me?” And this is the same Mayor who repeatedly claims that no one in his administration has seen the fraud reports. Because, you know, Linda Rumpke never opened the attachment and shared it with anyone. Or never saw it long before that, like in the fall of 2009 or anything like that, when Sahli and Kelly and Askew were buzzing about it.

If you believe this story, you’re just really really gullible.

What’s also of note about the McChord/Newberry argument: if they think Johnston’s fraud survey answer means that the committee is useless and should be shut down, have they also expressed to Crit Luallen that her state audit should be shut down as well? What’s the difference?

Anyway, that was about it for Monday’s meeting. The next episode is this Friday at 1:00, where Joe Kelly and Linda Rumpke are set to take the hot seat. Tune in on the Twitter Contraption live, as always.

August 9th LFUCG special investigation committee meeting

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August 10, 2010
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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….

June 22nd LFUCG special investigation committee meeting

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June 22, 2010
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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.

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