Tuesday, June 28, 2011
“To whitewash is a metaphor meaning to gloss over or cover up vices, crimes or scandals or to exonerate by means of a perfunctory investigation or through biased presentation of data. It is especially used in the context of corporations, governments or other organizations.”
Crit Luallen’s audit of the Kentucky Retirement Systems is a whitewash.
The audit primarily blames former Chief Investment Officer CIO Adam Tosh who left town one month before the placement agent scandal was revealed, and one placement agent, Glen Sergeon but does not recommend any prosecution, just blame these two guys and sweep the whole thing under the rug.
As I said last January;
“It seems they needed a few weeks after Tosh’s departure to cook up the internal secret audit in July to partially blame Tosh before they revealed it to the Trustees in August.
While the internal audit points out a relationship between Tosh and placement agent Glen Sergeon the placement agent who received over $5 million, other placement agents made millions years before Tosh ever got to KRS.”
Here’s what is not in the Audit, these are just teasers, click the links for more:
December 28, 2010
In August of 2009 a member of the Kentucky Retirement System (KRS) board of trustees Christopher Tobe criticized a bad land deal in the press based on Finance Cabinet Audit that KRS first tried to cover up then denied existing.
January 4, 2011
“Now I am a firm believer in coincidence. I certainly believe that totally unrelated things happen all the time in politics and government particularly when elections, power and money are involved.”
January 10, 2011
"While the amount of money involved is much smaller than the current Securities and Exchange Commission and Kentucky Auditor of Public Accounts investigations of placement agents used by the Kentucky Retirement Systems (KRS). There are interesting coincidences we want to revisit regarding the Church property purchased by Dr. Carol Taylor for $300,000 and 30 days later sold to KRS for $750,000."
January 19, 2011
"While all of KRS management was aware of the placement agent scandal in January 2010, they waited several weeks until after Chief Investment Officer (CIO) Adam Tosh left to even inform the Trustees on the audit committee that they even used placement agents in early August 2010."
January 20, 2011
"Some thoughts on the mini-Boptrot investigation going on a KRS.
While the internal audit points out a relationship between Tosh and placement agent Glen Sergeon the placement agent who received over $5 million, other placement agents made millions years before Tosh ever got to KRS."
February 8, 2011
"Attorney General Jack Conway has come through for his buddies at Kentucky Retirement Systems (KRS), just this week helping to strip the term limit language out of HB 480.
Jack needs buddies like KRS to help him retire his Senate debt, since there is little interest from the general political donor world to do so. This makes even more sense if some of the campaign debt is owed to Campaign Consultant and Placement Agent Mark Riddle.”
February 22, 2011
"I am glad the Herald Leader has finally called for some change at the Kentucky Retirement Systems (KRS) in an editorial. However, they seemed to have missed a couple of major points."
May 24, 2011
“At least twice in recent years, Gov. Steve Beshear’s office called the Kentucky Retirement Systems to suggest meetings with two of the governor’s Democratic political supporters who were working on behalf of private investment companies.”
Some conclusions on Luallen’s Audit
It was OK that the staff kept the amount of money spent in placement fees secret from the KRS Board from January to August.
It was OK for former General Council Schuyler Olt and former Executive Director Mike Burnside to meet with Sergeon in March and not tell the board until August.
And questions remain unanswered.
Why did the staff wait until Tosh was gone to inform the board about placement agents?
Are there any plans to prosecute Tosh?
Why did the Auditor decide not to look into the land deal?
Why does the audit not address HB 480 relating to term limits and placement agents?
One final thought:
Adam Tosh should probably stay off the golf course; he knows what happened to Dr. Taylor the key person in the last KRS scandal.