Stacking The Deck

In a previous post I talked about the way elections at Kentucky Retirement Systems are setup to allow the Board of Trustees to ensure their own reelection. Here are some more issues concerning the Board of Trustees of Kentucky Retirement Systems.

The issues regarding how someone gets on the Board do not end with the Kentucky Revised Statues. For instance a candidate for the Board of Trustees can raise an unlimited amount of money from any source to run for this Board.

There is this advisory opinion from the Registry of Election Finance:

December 29, 2004

Mr. Edwin A. Davis Trustee,
Kentucky Retirement Systems
12004 Doe Ridge Place
Louisville, Kentucky 40229

Dear Mr. Davis:
This is in reference to your November 29, 2004 letter requesting an advisory opinion concerning whether, as a candidate for reelection to the post of Trustee for the Kentucky Retirement Systems, you are subject to campaign finance regulation as defined under KRS Chapter 121. You explain that you have received donations to help defray the expenses for your reelection to the Kentucky Retirement Systems, but you want an advisory opinion regarding your legal duties, if any, under KRS Chapter 121.

Elections for the board of trustees of the Kentucky Retirement Systems are governed by KRS 61.645(4), which provides that “trustees selected by the membership of each of the various retirement systems shall be elected by ballot … distributed to eligible voters by mail…” KRS Chapter 121, which governs the campaign finance requirements for candidates for nomination or election to Kentucky public office, pursuant to KRS 121.015(2), defines “election” as “any primary, regular, or special election to fill vacancies regardless of whether a candidate or slate of candidates is opposed or unopposed in an election.” (Emphasis added.)

The election for the board of trustees of the Kentucky Retirement System is not a “primary, regular or special election” within the meaning of KRS 121.015(2). Therefore, the requirements of KRS Chapter 121 do not apply to candidates or nominees for the office of trustee to the board of trustees of the Kentucky Retirement Systems.

This advisory opinion represents the Registry's consideration of the circumstances presented in your letter. If you have any further questions, please do not hesitate to contact the Registry's staff.

Sincerely,

Rosemary F. Center
General Counsel

So this means that if an investment company or law firm wanted to spend thousands of dollars on the campaigns of Board members they could potentially stack the Board that controls $14 billion dollars in investments.

The opinion was restated here:

December 29, 2004

Mr. William A. Thielen
General Counsel
Kentucky League of Cities
101 East Vine Street,
Suite 600
Lexington, Kentucky 40507-3700

Dear Mr. Thielen:

This is in reference to your December 7, 2004 letter requesting an advisory opinion concerning whether, as a candidate for election to the post of Trustee for the Kentucky Retirement Systems, you are subject to campaign finance regulation as defined under KRS Chapter 121. You explain that you currently serve as General Counsel to the Kentucky League of Cities, a nonstock, nonprofit corporation, which intends to use its resources to promote your candidacy. Therefore, you ask the following questions:

1. Am I subject to the campaign finance reporting requirements that apply to candidates for public office?

The answer to your question is no. As expressed in the Registry’s Advisory Opinion 2004-008, issued simultaneously to this opinion, elections for the board of trustees of the Kentucky Retirement Systems are governed by KRS 61.645(4), which provides that “trustees selected by the membership of each of the various retirement systems shall be elected by ballot … distributed to eligible voters by mail…” KRS Chapter 121, which governs the campaign finance requirements for candidates for nomination or election to Kentucky public office, pursuant to KRS 121.015(2), defines “election” as “any primary, regular, or special election to fill vacancies regardless of whether a candidate or slate of candidates is opposed or unopposed in an election.” (Emphasis added.)

The election for the board of trustees of the Kentucky Retirement System is not a “primary, regular or special election” within the meaning of KRS 121.015(2). Therefore, the requirements of KRS Chapter 121 do not apply to candidates or nominees for the office of Trustee to the Kentucky Retirement Systems Board of Trustees.

2. Is the Kentucky League of Cities prohibited by Section 150 of the Kentucky Constitution, KRS 121.025 and KRS 121.035 from utilizing its resources (website postings, electronic and regular mailings, broadcast facsimiles, etc.) to promote my candidacy for the Kentucky Retirement System Board of Trustees.

Section 150 of the Kentucky Constitution provides, in pertinent part, as follows:

[I]f any corporation shall, directly or indirectly, offer promise or give, or shall authorize, directly or indirectly, any person to offer, promise or give any money or any thing of value to influence the result of any election in this State, or the vote of any voter authorized to vote therein, or who shall afterward reimburse or compensate, in any manner whatever, any person who shall have offered, promised or given any money or other thing of value to influence the result of any election or the vote of any such voter, such corporation, if organized under the laws of this Commonwealth, shall, on conviction thereof, forfeit its charter and all rights, privileges and immunities …
(Emphasis added.)

The General Assembly codified Section 150 at KRS 121.025 and KRS 121.035. As explained above, Section 150 of the Kentucky Constitution, KRS 121.025 and KRS 121.035 do not apply to an election to the Kentucky Retirement System Board of Trustees.

This advisory opinion represents the Registry's consideration of the circumstances presented in your letter. If you have any further questions, please do not hesitate to contact the Registry's staff.

Sincerely,

Rosemary F. Center
General Counsel

We should notice that Thielen apparently not only wanted to spend money to run for the Board he also wanted to know if his current employer, the Kentucky League of Cities, could help his campaign.

This is the same William Thielen that took Gordon Mullis’s position at KRS and is currently the Chief Operating Officer for the KRS.

And it would appears that the Board is not simply satisfied with the way elections are already stacked in their favor, they want more. The following questions were presented to the Ethics Commission:

1. Whether it is required that Board members seeking re-election to the Board in a particular election recuse themselves from all discussions of nominations for the election,
2. Whether they may just decline to nominate or vote for themselves in the nomination process, or
3. Whether they may participate fully in the discussions and nomination process, including nominating and voting for themselves

The Ethics Commission answered these questions with this:

The Commission believes that a conflict of interest will exist if a member of the Board is involved in any discussions/decisions regarding the nomination of applicants to be included on the ballot for election to a position on the Board. Clearly, a Board member’s involvement in his own nomination is an attempt to use his influence in a matter that involves a substantial conflict between his personal interest and his duties in the public interest. Involvement in matters of other applicants, as well, would present that same conflict between personal interest and duties in the public interest.

They didn't get what they wanted here, but these people obviously have no shame.

The complete Ethics Commission opinion is here.

So the question here is "Where is the legislative oversight of this agency?"