Building A Fiefdom

There are three primary ways to build a fiefdom in the Kentucky government bureaucracy.

Expertise, know a lot about something and control the flow of information,

Money, have the power to manipulate a lot of money. We’re not talking chump change like a few million dollars, we’re talking Billions of dollars, that’s with a capital “B”.

People, the number of troops you command and the extent to which you control their hiring, firing and promotions.

So how are Executive Director William P. Hanes and his right hand man General Counsel J. Eric Wampler doing at building a fiefdom at the Kentucky Retirement Systems (KRS)?

First, they meet the expertise requirement. An essentially self appointing Board of Trustees appears to rubber stamp whatever the administration puts before them, thus removing an essential check and balance. The internal functioning of KRS is modeled on the old communist party structure, organizational units do not communicate across organizational lines. All communication is vertical in nature, so Hanes controls the flow of information.

Second, this little fiefdom meets the horde of gold test. The total assets of the Kentucky Retirement Systems according to the 2005 annual report were $17,413,500,000.00. That’s almost 17.5 Billion dollars over a year ago.

Third, controlling staff, this is where the team of Hanes and Wampler has displayed true brilliance in arena of bureaucratic in-fighting.

From the 2003 KRS annual report:

“As a result of legislation passed during the 2003 General Assembly, KRS began implementing its own personnel system in December 2002. A Human Resources Director was hired to lead the human resources and payroll functions. This position is currently focusing on recruitment, retention and compliance to applicable federal and state statutes. We have already begun to see positive experiences in several operational areas, and we believe the new personnel system will continue to allow Kentucky Retirement Systems to provide even better service to our members.”

The law is KRS 65.145 (9) (c)

Effective December 1, 2002, all employees of the Kentucky Retirement Systems shall be transferred to a personnel system adopted by the board.

The reason this is a big deal is that another check and balance has been removed from the system.

To put this in perspective you have to understand that all of the Constitutional Offices of Kentucky government must function under the State Personnel system. This includes the Attorney General and the Auditor of Public Accounts.

Compare this piece of manipulation to the ham handed attempt indicted Governor Ernie Fletcher tried with the merit system. Fletcher should have asked Hanes for advice on how to get around the state personnel system.

Below is a list of sponsors for the Retirement Systems, omnibus update bill. This bill was actually passed by the 2002 General Assembly.

HB 309/AA (BR 1247) - J. Barrows, W. Allen, J. Adams, Ro. Adams, R. Adkins, J. Arnold Jr, A. Arnold, C. Belcher, L. Belcher, J. Bruce, B. Buckingham, Dw. Butler, J. Callahan, M. Cherry, J. Coleman, J. Comer, B. Crall, J. Crenshaw, R. Crimm, R. Damron, J. Draud, T. Feeley, C. Geveden, G. Graham, J. Gray, K. Hall, C. Hoffman, J. Jenkins, T. McKee, F. Nesler, S. Nunn, T. Pullin, J. Reinhardt, A. Simpson, R. Thomas, J. Thompson, Jo. Turner, J. Vincent, M. Weaver, R. Webb, S. Westrom, R. Wilkey, B. Yonts

AN ACT relating to retirement……

amend KRS 61.645 to allow the systems to create and operate its own personnel system without limitation of or by other statutes and to promulgate regulations to structure, to contract without limitation for medical or technical services, to acquire goods, allow for creation of an appeals committee, change the systems' operating officer from the general manager to an executive director and allow the executive director to function and be compensated without limitation of KRS 18A, 45A, and 64.640 and to appoint employees deemed necessary without limitation of KRS Chapter 18A;………..

So here are the hard questions for today.

What the hell were these people thinking in passing this section of the bill?

The group of sponsors includes some pretty savvy politicians and policy wonks. This little paragraph wasn’t just something that slipped by.

What was the quid pro quo for the legislature to allow “the systems to create and operate its own personnel system without limitation of or by other statutes”?

We did it for good government just doesn’t pass the smell test.