Today, I, like most state employees and retirees, received a letter from the Governor’s Office.
The letter dealt with one of my favorite topics, the Kentucky Retirement Systems (KRS).
The three paragraph letter, detailed how the Governor was taking care of state employees and retirees by asking the legislature to spend part of a projected surplus to fund the Kentucky Retirement Systems.
Let’s not even talk about how the projected surplus, if it happens, is already committed to pay for legislative mandates already on the books. And let's not talk about how Ernie should be paying more attention to what is going at KRS.
Let’s instead talk about what this letter really is about. This is Ernie Fletcher campaigning for Governor. In his usual ham handed way Ernie screws up again.
The letter was handled by Bluegrass Mailing Services. Their postage paid stamp was in the upper corner of the envelope.
So here is my question, was this mailing paid for by the Fletcher campaign using the letterhead of the Governor’s Office, or at least a cheap copy thereof?
Or was this sent at taxpayer expense, to make Ernie look good to state employees?
The bottom line is that either Ernie is sending out campaign materials without identifying them as such or he is using tax dollars to begin his campaign.
Talk about waste, fraud and abuse.
Wednesday, January 10, 2007
Lawyers, KRS and Money
When looking at the staffing for the Kentucky Retirement Systems there was an increase in the number of lawyers on the payroll. Now it must take a bunch of legal help to run KRS.
In addition to the lawyers on the payroll KRS spent, according to the 2006 Comprehensive Annual Report (CAFR) Schedule of Professional Consultant Fees, a total of $522,000.00 for legal services. The cost of legal fees is up over $100,000.00 from the previous year's $397,000.00.
I guess the more you spend for lawyers the less you have to spend on Auditors. The CAFR showed the cost of Audit Services dropped from $41,000.00 to $23,000.00.
So who are the law firms making over a half million dollars from retired state employees and taxpayers?
According to the CAFR, the legal consultants listed are Klausner & Kaufman, PA and Stoll, Kennon & Park, LLP which is now Stoll Kennon & Ogden.
Klausner & Kaufman
The picture painted of Klausner & Kaufman is not pretty.
According to Forbes, Klausner receives a varying cut of lawyer fees for work on cases he refers to class action firms, on top of a retainer for routine work. One client the Jacksonville Police and Fire Fund trustees seemed largely unaware of Klausner's arrangement.
Klausner also played a role in the controversy surrounding the San Diego pension system. From the San Diego Reader:
'Someday this mess will end up in the media," wrote an irate Terri Webster in an e-mail on August 13, 1999. Oh, how prescient her words were. Webster, then assistant city auditor, was writing to deputy city manager Bruce Herring…..
She particularly challenged the hiring of Robert D. Klausner, the Florida lawyer who was not licensed in California. "You would think question #1 in selecting candidates for the board to interview would be, 'Are you licensed to practice in the state?'" wrote Webster to Herring. She questioned Klausner's past advice: "He's the guy from Florida that mostly supported the questionable issues without citing much case law. He gave the advice on independence, Brown Act, conflicts of interest, etc. He's been employed with the board for over two years. Reassuring, isn't it? The board should contact his other California clients to save them $$$ for bum advice."
Klausner’s “client conferences” also get mentioned in this article by Gretchen Morgenson and Mary Williams Walsh, of the New York Times
Pension consultants aren't the only ones holding conferences where money managers can hobnob with pension officials. Robert D. Klausner, a lawyer at Klausner & Kaufman in Plantation, Fla., whose firm provides legal counsel to many pension funds in Florida and elsewhere in the south, runs similar meetings.
Klausner & Kaufman's sixth annual client conference was in March at the Hyatt Regency in Fort Lauderdale, Fla. Among the eight companies that paid to sponsor the 2003 conference were Merrill Lynch and Davis Hamilton Jackson & Associates, a money manager based in Houston that Merrill often recommends to its pension clients.
Stoll Kennon & Ogden
The managing partner of Stoll, Kennon & Ogden is former State Representative Bill Lear. You would think that with Lear’s reputation for land dealings and economic development KRS management would have used some of those fees to consult him on their real estate dealings:
“In the area of economic development, Mr. Lear has extensive state, national and international experience and is one of Kentucky's foremost attorneys.”
Other law firms
The law firm of Ice Miller is listed as a Fiduciary Consultant and the firm of Lussler, Gregor, Vienna and Associates isn’t listed at all.
That’s a lot of high powered legal talent. As a comparison all Professional Services Contracts (legal, audit, etc.) at Kentucky Teachers Retirement System cost a total of $229,833.
So today’s questions are:
Why do you pay over half a million dollars in legal fees when you have a stable of lawyers in house?
Does the $522,000.00 for legal services cover all the lawyer’s fees or just those to Klausner and Stoll Kennon?
Why does the Kentucky Retirement System need a Washington DC lobbying firm?
Is part of the $2 million dollars in salaries and per diem spent on junkets to Florida for “client conferences”?
Why is Ice Miller listed as a Fiduciary Consultant in the CAFR and not legal consultant? Is there are real difference in the service they provide or is this just a way to hide more legal fees?
And once more,
Where are the watch dogs on this agency?
In addition to the lawyers on the payroll KRS spent, according to the 2006 Comprehensive Annual Report (CAFR) Schedule of Professional Consultant Fees, a total of $522,000.00 for legal services. The cost of legal fees is up over $100,000.00 from the previous year's $397,000.00.
I guess the more you spend for lawyers the less you have to spend on Auditors. The CAFR showed the cost of Audit Services dropped from $41,000.00 to $23,000.00.
So who are the law firms making over a half million dollars from retired state employees and taxpayers?
According to the CAFR, the legal consultants listed are Klausner & Kaufman, PA and Stoll, Kennon & Park, LLP which is now Stoll Kennon & Ogden.
Klausner & Kaufman
The picture painted of Klausner & Kaufman is not pretty.
According to Forbes, Klausner receives a varying cut of lawyer fees for work on cases he refers to class action firms, on top of a retainer for routine work. One client the Jacksonville Police and Fire Fund trustees seemed largely unaware of Klausner's arrangement.
Klausner also played a role in the controversy surrounding the San Diego pension system. From the San Diego Reader:
'Someday this mess will end up in the media," wrote an irate Terri Webster in an e-mail on August 13, 1999. Oh, how prescient her words were. Webster, then assistant city auditor, was writing to deputy city manager Bruce Herring…..
She particularly challenged the hiring of Robert D. Klausner, the Florida lawyer who was not licensed in California. "You would think question #1 in selecting candidates for the board to interview would be, 'Are you licensed to practice in the state?'" wrote Webster to Herring. She questioned Klausner's past advice: "He's the guy from Florida that mostly supported the questionable issues without citing much case law. He gave the advice on independence, Brown Act, conflicts of interest, etc. He's been employed with the board for over two years. Reassuring, isn't it? The board should contact his other California clients to save them $$$ for bum advice."
Klausner’s “client conferences” also get mentioned in this article by Gretchen Morgenson and Mary Williams Walsh, of the New York Times
Pension consultants aren't the only ones holding conferences where money managers can hobnob with pension officials. Robert D. Klausner, a lawyer at Klausner & Kaufman in Plantation, Fla., whose firm provides legal counsel to many pension funds in Florida and elsewhere in the south, runs similar meetings.
Klausner & Kaufman's sixth annual client conference was in March at the Hyatt Regency in Fort Lauderdale, Fla. Among the eight companies that paid to sponsor the 2003 conference were Merrill Lynch and Davis Hamilton Jackson & Associates, a money manager based in Houston that Merrill often recommends to its pension clients.
Stoll Kennon & Ogden
The managing partner of Stoll, Kennon & Ogden is former State Representative Bill Lear. You would think that with Lear’s reputation for land dealings and economic development KRS management would have used some of those fees to consult him on their real estate dealings:
“In the area of economic development, Mr. Lear has extensive state, national and international experience and is one of Kentucky's foremost attorneys.”
Other law firms
The law firm of Ice Miller is listed as a Fiduciary Consultant and the firm of Lussler, Gregor, Vienna and Associates isn’t listed at all.
That’s a lot of high powered legal talent. As a comparison all Professional Services Contracts (legal, audit, etc.) at Kentucky Teachers Retirement System cost a total of $229,833.
So today’s questions are:
Why do you pay over half a million dollars in legal fees when you have a stable of lawyers in house?
Does the $522,000.00 for legal services cover all the lawyer’s fees or just those to Klausner and Stoll Kennon?
Why does the Kentucky Retirement System need a Washington DC lobbying firm?
Is part of the $2 million dollars in salaries and per diem spent on junkets to Florida for “client conferences”?
Why is Ice Miller listed as a Fiduciary Consultant in the CAFR and not legal consultant? Is there are real difference in the service they provide or is this just a way to hide more legal fees?
And once more,
Where are the watch dogs on this agency?
Ethically Challenged Bipartisanship
Once again we have an example of why no one trusts the Kentucky General Assembly.
From the Herald-Leader:
“FRANKFORT - As lawmakers gathered last week for the first of two mandatory ethics training seminars, the Senate's top Republican and Democratic lawmakers weren't around to hear noted campaign finance reformer Norman Ornstein speak……
In all, more than a third of Kentucky's 38 senators skipped at least one of two 90-minute ethics seminars Wednesday and Thursday morning even though a state law created in the wake of a 1992 bribery scandal makes attendance mandatory”
Ok, I understand the sessions are boring and legislators should already have a clue about what is ethical and what is not. But what part of mandatory do they not understand.
They give themselves this out for not attending:
“To avoid a potential charge of ethical misconduct, absent lawmakers are allowed to certify that they have watched a video of the sessions, said Tony Wilhoit, executive director of the Legislative Ethics Commission.”
For people in the public eye, the behavior of these legislators is incomprehensible. Once again they demonstrate the arrogance and stupidity that we have all come to expect from our representatives.
Granted the Legislative Ethics Commission is a toothless lion. All roar and no bite. And members still rely on "I didn’t know it was illegal" as a defense.
But the fact that we still regularly see stories, like the one about Sen. Daniel Mongiardo and his involvement with at PAC, speaks to how little the General Assembly values ethics or fears the wrath of the Legislative Ethics Commission and how much they need the training.
"If we find out that someone did not turn in a certificate of attendance, then I will talk to them personally and tell them to watch the tape," he (Senate President David Williams, R-Burkesville) said.
Boy now there is something to be scared of………
From the Herald-Leader:
“FRANKFORT - As lawmakers gathered last week for the first of two mandatory ethics training seminars, the Senate's top Republican and Democratic lawmakers weren't around to hear noted campaign finance reformer Norman Ornstein speak……
In all, more than a third of Kentucky's 38 senators skipped at least one of two 90-minute ethics seminars Wednesday and Thursday morning even though a state law created in the wake of a 1992 bribery scandal makes attendance mandatory”
Ok, I understand the sessions are boring and legislators should already have a clue about what is ethical and what is not. But what part of mandatory do they not understand.
They give themselves this out for not attending:
“To avoid a potential charge of ethical misconduct, absent lawmakers are allowed to certify that they have watched a video of the sessions, said Tony Wilhoit, executive director of the Legislative Ethics Commission.”
For people in the public eye, the behavior of these legislators is incomprehensible. Once again they demonstrate the arrogance and stupidity that we have all come to expect from our representatives.
Granted the Legislative Ethics Commission is a toothless lion. All roar and no bite. And members still rely on "I didn’t know it was illegal" as a defense.
But the fact that we still regularly see stories, like the one about Sen. Daniel Mongiardo and his involvement with at PAC, speaks to how little the General Assembly values ethics or fears the wrath of the Legislative Ethics Commission and how much they need the training.
"If we find out that someone did not turn in a certificate of attendance, then I will talk to them personally and tell them to watch the tape," he (Senate President David Williams, R-Burkesville) said.
Boy now there is something to be scared of………
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