Judge Horner’s Roundup for Week of Nov. 28, 2008
Lawyers for highway construction mogul Leonard Lawson have made alleged prosecutorial abuse by the US Attorney’s office the cause célèbre centerpiece of their motion to dismiss Lawson’s Sep. 3 bid-rigging indictment. In a Nov. 20 motion lead defense lawyer Larry Mackey has alleged that prosecutors “egregiously violated” US Grand Jury secrecy, according to a Nov. 21 story by The Courier-Journal’s Andrew Wolfson. Mackey accuses an unknown prosecutor with tipping off the newspaper’s Tom Loftus about an affidavit filed on Aug. 1 by FBI Special Agent Clay Mason in support of a motion for a search warrant. The affidavit described some of the evidence that the grand jury had heard put forth by witnesses.
On Aug. 9 both the Louisville newspaper and The Corbin Times-Tribune published stories about the contents of the affidavit. Corbin is not far from Williamsburg, the hometown of defendant and former state Transportation Cabinet Sec. Bill Nighbert who is also accused in the same indictment of furnishing confidential cabinet information to Lawson in return for over $67,000 in payoff money. The information was allegedly used by Lawson to bid just below the highest amount that the cabinet would pay on a highway construction contract. This would enable Lawson to achieve the highest amount of profit on each job. Lawson’s bids in 2006 and 2007 were for projects totaling about $130 million. The indictment charges Lawson and Nighbert with conspiracy, bribery, and obstruction of justice. Brian Billings, a Lawson employee, is also charged in the indictment with obstruction of justice.
Nighbert served under former Gov. Ernie Fletcher who was defeated for re-election by Gov. Steve Beshear on Nov. 6, 2007. Immediately upon his Dec. 11 inauguration, Beshear replaced Nighbert with Joe Prather, an Elizabethtown businessman and former state Senate President.
Each of the three defendants has pleaded not guilty and is scheduled to stand trial on Apr. 28. They claim that they cannot get a fair trial because the publicity generated by the affidavit and because the newspapers published stories about it. Bennie Ivory, The Courier-Journal’s executive editor, declined comment on Mackey’s charges. Corbin reporter Brad Hicks said that he went to the US Courthouse on Aug. 8 because he heard that the grand jury would issue its indictment against Lawson and Nighbert that day. Hicks was a little early as the indictment was returned on Sep. 3.
Citing a UK professor’s poll findings that pre-trial publicity made a fair trial in Frankfort impossible for their clients, on Nov. 25 defense lawyers filed a joint motion to move the trial from Frankfort to Covington. Their motion included 800 pages of newspaper and TV stories about the case, according to a Nov. 26 story by The Herald-Leader’s Beth Musgrave. The motion states in part: “Defendants Lawson and Nighbert in particular have been the subject of an extraordinary amount of prejudicial publicity…(and) A significant portion of that prejudicial publicity has been caused by unlawful actions by the Government.”
Defense lawyers paid for the telephone poll of 1,406 people in Frankfort, Lexington, London and Pikeville – four of the five cities where US District Court Judges sit in Kentucky’s Eastern District. The defense claims that the remaining location – Covington – received far less press coverage of the case by the Ohio-biased Cincinnati press, and thus is most suitable for the trial, according to Musgrave’s story.
Loftus reported on Nov. 26 that the professor’s name is Phillip Roeder and that the poll was taken between Aug. 13-18 – after press stories covered the affidavit but before the indictment was issued.
The motion also states that Nighbert’s scandalous past with Fletcher has produced significant prejudicial publicity for him. Nighbert, a former Williamsburg Mayor, was indicted twice – for violating state merit system laws and for witness tampering – but was pardoned by Fletcher while Nighbert was serving as the state’s top transportation official. Thirteen other Fletcher officials were also indicted for interfering with the merit system to fire, demote, or transfer merit system employees in order to enable Fletcher loyalists to get their jobs. Fletcher pardoned all of the officials on all charges on Aug. 29, 2005 for alleged crimes committed on or before that date. The next year Fletcher was indicted for merit system interference, but after a trial judge ordered that Fletcher’s trial would have to wait until he left office, the charge was dismissed by then-state Atty.-Gen. Greg Stumbo who reasoned that Fletcher would just pardon himself on his way out the door – whenever that would be – and no trial would ever be held.
Beshear has ordered every state agency – including education – to submit by Dec. 5 a revised budget draft to include a 4% reduction in spending through the June 30 end of this fiscal year. Beshear’s order comes in the wake of a revised revenue shortfall now projected at $456 million, or 5.1% lower than original revenue assumptions through June 30. And this spending reduction comes on top of prior significant decreases in spending ordered by Beshear when he became Governor last Dec. 11 and mandated in the highly controversial 2008-2010 biennial state budget passed on Apr. 2 by state lawmakers. That budget cuts all state agency and higher education funding by 3% during the current biennium that began on July 1 – down from the 3% cuts that Beshear ordered in December 2007 for the fiscal year that expired last June 30.
Beshear spokesman Jay Blanton said that Beshear may not actually make every state agency and program endure the same percentage cut, but he wants all of them to plan for as much as 4% less money to spend. “To prepare our proposed plan that addresses the shortfall, we’ve got to have potential scenarios from across state government,” Blanton said, according to a Nov. 26 story by Loftus, Stephanie Steitzer, and Deborah Yetter. “So we’ve asked agencies … to prepare scenarios of the impact of a 4 percent cut.”
Moreover, Blanton emphasized that every spending program is at risk for reduction. “With a shortfall of this size, nothing can be – or should be – off the table, if we are to address this deficit in a fiscally responsible manner,” Blanton said, according to a Nov. 27 story by The Herald-Leader’s Jack Brammer. In similar down-revenue periods, prior Governors have usually exempted education and Medicaid from cuts, but this situation is so severe that it appears those programs will be on the chopping block as well.
One expected agency reduction – that illustrates the scope of the problem – came from a Nov. 26 e-mail to faculty and staff by WKU Pres. Gary Ransdell in which he stated that $3,225,052 would have to cut out of that institution’s spending between now and June 30.
State Senate Pres. David Williams (R-Burkesville) contends that the 2009 General Assembly can now pre-empt Beshear, pursuant to the 2000 budget reduction act, to mandate cuts because the official revenue projection has been reduced by as much as 5% by the Consensus Forecasting Group – a group of university economists authorized by statute to do so. “I would be open to hearing the testimony with an open mind,” Williams said, according to a Nov. 26 story by The Herald-Leader’s Ryan Alessi. “I think it’s very fortunate that we didn’t expand the budget (in April) like the governor and some in the House wanted to do and that we held raising the cigarette tax in reserve.”
Beshear tried to get lawmakers to pass a 25-cents-per-pack cigarette tax increase during the 2008 regular legislative session, and the bill fairly easily passed the House. But the bill stalled in the Senate Appropriations and Revenue Committee with Williams leading the chorus against it. No floor vote was taken on the bill in the upper chamber. The state’s cigarette tax currently stands at 30-cents-per-pack – one of the lowest in the US. The national average is $1.11-per-pack, according to Musgrave’s Nov. 20 story.
Local jurisdictions throughout the state received grim news on Nov. 20 as the trustees of the Kentucky Retirement Systems (“KRS”) announced that cities and counties must pay – during the next fiscal year beginning July 1 – about 24% more as their share of the cost for their employees’ pension and health care costs. For example, Covington officials said this means an additional $1 million combined with the $4 million that they are already paying as a part of a $44 million annual budget, according to a story by The Cincinnati Enquirer’s Mike Rutledge and Amanda VanBenschoten.
“It is dire – the train wreck has happened,” KY League of Cities (“KLC”) CEO Sylvia Lovely told Rutledge and VanBenschoten. “Think about this for a moment – what do they call this, the perfect storm? You have layoffs occurring in cities, you have the dire – dire – unprecedented economic slump, you have occupational taxes and revenue sources going down, foreclosures increasing, thus creating all kinds of cascading and swirling-downward kinds of moments. And then, on top of that, this. So we’re very, very concerned, and it obviously means higher costs in our pensions.” Lovely estimated Covington’s increase next year to be as much as $1.5 million when final calculations are made.
Lovely said that a number of cities and counties were “desperate” even before the KRS’ action on Nov.20. “They’re slashing budgets – already they were doing that before the meeting Thursday. Public safety particularly is being hit hard (with job cuts),” Lovely added, according to the story by Rutledge and VanBenschoten.
Louisville Metro’s public pension obligation will rise to $70.4 million in the next fiscal year from $57 million this year – a $13.4 million hit. “It’s an additional $13 million we don’t think we’ll have but will be mandated to come up with,” said Chad Carlton, spokesman for Mayor Jerry Abramson, according to a Nov. 21 story by The Courier-Journal’s Dan Klepal. “When you have a $13-million freight train coming at you next year, we have to think of more 18-month solutions rather than six-month solutions.”
“These are staggering increases at the worst possible time,” Lovely told Klepal. “This is a very serious problem, and the problem is immediate.”
In a joint letter with the Kentucky Association of Counties (KACo) in October, the KLC requested that the KRS trustees adopt a ten-year phase-in plan for fully funding retiree health benefits – higher assessments for retiree health care costs required several years ago by US law changes made applicable to all private and public pension systems. However, the KRS has put the locals on a five-year schedule to bring their additional health care costs current. Those catch-up costs are included in the overall 24% increase referred to at the top of this column segment.
The mandated re-calculations under US law were made by Congress because inflation-busting health care costs were not originally factored into actuarial formulas by almost all public and private pension systems across the US, and some began to “go broke” several years ago. According to a Nov. 21 KLC press release, it will urge lawmakers when they meet in February to force the KRS “to use an extended phase-in period for the actuarially required contribution (ARC) for full funding of retiree health insurance liability.”
Beshear will recommend to the General Assembly next year statutory changes affecting the KRS and the Kentucky Teachers’ Retirement System (“KTRS”), according to a Nov. 21 story by The Courier-Journal’s Joseph Gerth. After discussions with groups that represent state employees and teachers, Beshear announced on Nov. 20 the following proposals based on a careful review of both systems’ investment returns:
a. add four investment experts to both systems’ investment committees;
b. require continuing education on investments for both systems’ board members;
c. constant review of the pension funds’ investment allocations; and
d. insuring that the systems can react responsibly to changing market conditions.
The executive directors of the KRS, KTRS, and the Kentucky Education Association all voiced support for Beshear’s recommendations, according to Gerth’s story. The recommendations grew out of a study by Hammond Associates, a Missouri consulting firm, that found that the pension systems are over-weighted in domestic equities – with not enough exposure to international equities or alternative investments such as real estate trust, hedge funds, and venture capital.
Gerth reported in his Nov. 21 on-line story that about 316,000 active and retired state, county, and city employees are covered by the KRS. The KTRS covers about 115,000 active and retired teachers. The KRS holds about $17 billion in assets, and KTRS holds about $15.6 billion, according to Gerth’s story. The huge per-person disparity between the two retirement systems is attributable to the fact that the General Assembly has not paid the correct share of its employees’ pension and health care costs into the KRS beginning almost 20 years ago. Beshear called a special legislative session in June to deal with the funding shortfall. Lawmakers passed a bill in which they promised to pay into the KRS by 2025 what they should have already paid in over the last 20 years.
US Sen. Jim Bunning (R-KY) is sort of the Rodney Dangerfield of KY politics – no one takes him seriously!
Gerth and The Cincinnati Enquirer’s Patrick Crowley keep writing stories about whether Bunning will actually pull the trigger and seek re-election on Nov. 2, 2010 – just a few days after turning 79 on Oct. 23 that year. This comes after a lot of stories were written – within a week of the Nov. 4 presidential election – about the next big state-wide race and whether Bunning would be in it. Crowley reported in his latest story posted on Nov. 23 at the newspaper’s nky.com that some Republican insiders still aren’t convinced despite Bunning’s high-octane declaration at the party’s Nov. 8 state central executive committee meeting that he was definitely running. “When Mary is with him,” said one Northern Kentucky GOP insider, “that’s when I’ll believe it.” This is a reference to Bunning’s wife, Mary, as an illustration of Bunning’s strong family ties. Bunning is from Southgate in Campbell County, and Crowley extensively reports on the first US Senator from that region in many decades.
Gerth’s Nov. 23 story pointed out that, at this point in the run-up to his 2004 race, Bunning had about $1 million in his campaign account. As of Sep. 30, he only had about $175,000. Yet, he told the state GOP committee’s members on Nov. 8 that he would need about $10 million to get re-elected, and would immediately start raising money.
Democratic political consultant Danny Briscoe has serious doubts that Bunning will run again, given his total absence of fund-raising since 2004. “I don’t see any way in the world he can raise $9.8 million in 20 months,” Briscoe told Gerth. “Actions speak louder than words, even though he says he’s running.”
The Cook Political Report, a DC organization dedicated to non-partisan political analysis, already calls the 2010 race a toss-up – even though Bunning’s Democratic opponent is still unknown! The organization’s senior editor Jennifer Duffy mentioned Bunning’s shockingly narrow, 23,000-vote re-election in 2004 and subsequent failure to fund-raise. “It makes you wonder what he’s been doing the last four years,” Duffy said, according to Gerth’s story.
Bunning was first elected in 1998 but struggled four years ago against Lt. Gov. Daniel Mongiardo and barely prevailed – 50.6%-49.4%. At that time Mongiardo was just an obscure state Senator from the Hazard area. During that campaign Time magazine, from a survey of academicians and current and retired US senators, rated Bunning one of the Senate’s five “worst” senators.
Move over, Rodney; you got company! The US Senate’s “bad boy” also “gets no respect.”
After Pittsburgh got the best of West Virginia 19-15on Nov. 28 in college football’s “back-yard brawl,” state House Democrats will have their own version of it come early January when two veteran lawmakers will vie for the top House leadership post. The chamber’s longest-serving Speaker in the state’s 216-year history, Rep. Jody Richards (D-Bowling Green), will have to turn back a challenge from Stumbo, its longest-serving but now ex-Majority Leader. Actually, all 100 representatives vote for their Speaker, but the majority party has always voted as a block on the House floor for their leader thus insuring s/he will be Speaker.
The Courier-Journal updated its readers on the contest with a Nov. 24 front-page story by Steitzer who reported that “both Stumbo and Richards say they believe they have more votes than the other, but it’s a difficult race to handicap, because leadership votes are secret and lawmakers are infamous for committing to more than one candidate.” The secret ballot election will occur in a closed House Democratic caucus so it may be impossible afterward to ever know exactly what the vote split was.
Richards, 70, was first elected to the House in 1975 before becoming Speaker in 1995 – with the support of Stumbo who was first elected in 1980 and became Majority Leader in 1985. After 18 years of working closely with Richards on legislative matters, Stumbo was elected in 2003 to one term as state Attorney-General. In 2007 he gave up a chance for a second term to be the running-mate of Democratic gubernatorial candidate Bruce Lunsford, a Louisville businessman. Lunsford and Stumbo lost the 2007 Democratic primary nomination to Beshear and Mongiardo. In December 2007, the representative from Stumbo’s House District-95 quit, and Stumbo won a special election in January to return to the House.
One of the reasons cited by Stumbo, 57, for his decision to take on Richards is that Richards did not cooperate with Beshear in trying to get lawmakers to pass legislation last winter to allow a state voter referendum on whether to amend the state constitution to permit casino gambling. Richards denies Stumbo’s charges.
Beshear said that he was neutral on the race. “I think whoever is in leadership in the House will work with me and work with the Senate to push through some solution to this financial crisis for Kentucky families,” Beshear told Steitzer.
Stumbo also criticized Richards and Appropriations and Revenue Committee Chairman Harry Moberly (D-Richmond) for bad legislative strategy when they “thought they could ‘force’ the Senate into raising the cigarette tax.” Stumbo was referring to the House’s passage of a 25-cents-per-pack increase that never even got a committee hearing in the Senate. “I don’t see any reason to make that the same mistake again.”
Stumbo drew his own criticism from Rep. Mary Lou Marzian (D-Louisville) for trying to arrange a separate budgetary agreement with Williams during a stalemate between the two chambers relating to a new state budget. “Greg Stumbo went behind leadership’s back and cut a deal (to help pass a budget),” Marzian said. “I don’t think that is beneficial to the Democratic caucus.”
Tim Moore-Weaver State House Race Not Over
A surprising development occurred on Nov. 20 as Hardin County Clerk Kenny Tabb filed an action in Hardin Circuit Court asking for permission to do a hand-count of the contested Pine Valley precinct. The reason, according to a story by WHAS-TV’s Mark Hebert posted on Nov. 20 at whas11.com, is that Tabb believes that “paper ballots were improperly taken out of a malfunctioning voting machine and handed to an unknown person to count” (Hebert). State Rep. Tim Moore (R-Elizabethtown) was re-elected over Democrat Mike Weaver, a former occupant of the office, by 108 votes on Nov. 4 with Pine Valley included, according to the election result certified by the state Board of Elections on Nov. 21.
Hebert reported that, if Pine Valley were thrown out, Weaver would win. The court will hear Tabb’s case on Dec. 1. House District-26 includes Radcliff, Vine Grove, and part of Elizabethtown. Weaver held the seat from 1998 until 2006 when he made an unsuccessful race against now-retiring US Rep. Ron Lewis (R-KY2). Soon-to-be-resigning state Sen. Brett Guthrie (R-Bowling Green) will be taking over Lewis’ seat in January after defeating state Sen. David Boswell (D-Owensboro) on Nov. 4 in a hotly contested race. A T/B/A special election will be called to fill Guthrie’s state Senate seat.
Nov. 23 – Al Cross in The Courier-Journal: “Williams emerging as GOP favorite”
“…though we just got through an election, and the next one is 17 months away, and the filing deadline for the next governor’s race is more than two years off, some choices made in the next few months will have a lot to say about that race. Not only is Democratic Gov. Steve Beshear expected to seek re-election, but his principal legislative adversary may become his electoral adversary.
“State Senate President David Williams of Burkesville emerged in the last month as a leading candidate because of the work he did this fall to elect fellow Republicans, speaking on U.S. Sen. Mitch McConnell’s 62-stop bus tour and raising money for GOP state Senate candidates. Williams is a powerful stump speaker, and his appearances around the state started a bit of a groundswell.
“As Kentucky Republicans look to 2011, ‘He would have to be at the top of our list,’ because he knows the issues and has such great political skills, said Ted Jackson of Louisville, a longtime Republican activist and vendor to campaigns.
“The idea of Williams as a statewide candidate pleases Democrats who believe voters have such a low opinion of him that he is not electable. But no published polls have measured his favorability, and it’s likely that most Kentuckians don’t have any idea who he is. Two previous Senate leaders, Joe Prather and the more prominent John ‘Eck’ Rose, were surprised when they ran for governor how low their name recognition was. Prather never filed for the 1987 primary and Rose finished third in 1995….”
Nov. 23 – Crowley at nky.com: “Battered and bruised, GOP managed to weather storm”
“…After a two-decade erosion of its power and dominance by a growing Republican majority, Democrats came roaring back in the (2007) gubernatorial race, giving Steve Beshear Kenton and Campbell counties and coming close in Boone County as Republican Ernie Fletcher and his scandal-plagued administration was booted after one term.
“There was talk of the Democrats’ resurgence. The party prepared to field a strong challenge to, and even possibly defeat, U.S. Sen. Mitch McConnell. Democratic bloggers predicted that two of the region’s GOP state senators – Damon Thayer and Jack Westwood – would be beatable in 2008…
“Just days after Beshear’s victory, Northern Kentucky University political science professor Michael Baranowski offered some prophetic perspective.
“ ‘I think it’s a big stretch to say that this race indicates people are unhappy with the Republican Party in Kentucky,’ Baranowski told me at the time. ‘Kentucky is still a very conservative state.
“ ‘I don’t see a tidal wave of change sweeping through Kentucky politics at this point.’
“Was he right on the money or what?
“Not only did Republicans accurately surmise that the gubernatorial race was, at least in Northern Kentucky, more a rejection of Fletcher than the embrace of Beshear, but the party retrenched, refocused and reinvigorated for this year’s federal and statehouse candidates.
“Republican John McCain lost the presidential race to Democrat Barack Obama, but he ran the table in Northern Kentucky, as did McConnell and Congressman Geoff Davis, the Boone County Republican. All three easily won all three counties.
“Thayer and Westwood claimed victories…
“Even while national Republicans and the Bush administration have turned away from many of the party’s core principles, particularly on spending and the expansion of government, local voters still support GOP candidates.
“Issues like abortion, taxes, guns and other conservative causes resonate strongly here and favor Republican candidates, at least in the minds of the local electorate.
“The Democrats tried this year. But the GOP is back.
“And it looks like it is here to stay.”
Nov. 24 – Gerth in The Courier-Journal: “Democrats in KY House must beware”
“The biggest danger in winning elections or establishing majorities is the tendency to overstep…
“The Republicans in the Kentucky Senate did it in 2004 when they ignored a judge’s order and tried to seat the daughter of Sen. Dan Seum in the 37th District, even though she didn’t meet constitutional requirements to serve.
“The Kentucky Supreme Court stopped them.
“Now the Democrats in the Kentucky House are at risk of overstepping in their zeal to return a former colleague to the chamber. They should tread carefully.
“At issue is the 26th District House race in Hardin County. Former Democratic Rep. Mike Weaver challenged Republican incumbent Tim Moore for the seat Weaver held for a decade before giving it up in 2006 for an ill-fated congressional run.
“Weaver lost by 108 votes.
“But now, at the urging of the House Democratic Caucus, he says he’s going to contest the election in the House, claiming that irregularities in one precinct tainted the election and that he should be awarded the seat…
“If there truly were irregularities, and they’re proven to have cost Weaver the election, House Democrats should do their job and seat him. But short of that proof, they should return Moore.
“It’s one more vote in an already huge Democratic majority.
“And it’s just two years until the next election, when Senate President David Williams could use the Democrats' actions to rationalize using similar means to increase his Republican majority.
“And therein lies one of the dangers of overstepping.”
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