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.
Coincidence 1: There was no mention or explanation of this land deal in public minutes, nor any mention of the mysterious resignations of Chief Investment Officer John Krimmel or Chief Operating Officer Gordon Mullis, for months after they occur until the press breaks the story in May 25, 2006. Subsequently very little explanation was offered for 2 years afterward until Board Member Chris Tobe, who formerly help write the 1998 Kentucky Auditor's review of KRS, joins the board in April 2008 and starts asking questions about the land deal and received boxes of documents.
Coincidence 2: August 2008 Dr. Carol Taylor who made the big profit selling the church to KRS is killed by a golf cart.
Tobe asks the Finance Cabinet to do an audit of the land deal, in late 2008. The audit begins in 2009 with little fanfare.
Coincidence 3: In a violation of open meetings reporters were not allowed to hear a statement on his problems with the land deal made by Tobe at the April 2009 investment committee meeting...
Coincidence 4: On May 11, 2009, the KRS staff receives a draft audit from Finance cabinet. This draft audit reveals 14 new documents that were not revealed in the minutes of KRS financial meetings.
It may just be another coincidence but all the 14 of the documents seem to point toward the conclusion that Krimmel and Mullis did not act alone. They would also seem to point to a wider awareness and involvement by Executive Director Bill Hanes, General Council Eric Wampler, and Bill Crumbaugh the owner of Summit Reality and the KRS Board of Trustees than previously been disclosed.
Coincidence 5: At the May 21, 2009 KRS board meeting, of which the land deal is a major agenda item, the staff KRS forgets to tell the board of the Finance cabinet audit despite having had the information for 10 days.
Coincidence 6: On June 10th 2009 KRS staff finally reveals to full board, for the first time, the draft audit they received nearly a month earlier, less than30 days before the Finance Cabinet publishes it on July 6.
Coincidence 7: On August 5 2009 - The Lexington Herald Leader blasts KRS based on finance cabinet audit. Executive Director Mike Burnside dismisses the Finance audit and says the matter is closed.
Coincidence 8: At August 16, 2009 KRS board meeting Trustee Chris Tobe is removed from investment committee and declared that he was to get no access to non-public documents by Chairman Randy Overstreet. Remember Tobe is the person the requested the audit.
Coincidence 9: At the Joint Government oversight committee of the Kentucky General Assembly on August 26, 2009 Rep. Jim Wayne asked that the KRS obtain an executive branch ethics opinion on Bill Crumbaugh’ s conflicts as pointed out in the finance cabinet audit.
Executive Director Mike Burnside remarked that he did not think Crumbaugh was subject to executive branch ethics since he works for the non-profit subsidiary of KRS Perimeter Park West (PPW) in a non-bid contract outside the rules.
Burnside seems to believe that even though Kentucky Retirement Systems, a part of state government, can totally own and run a corporation that is not subject to the laws that govern the operation of rest of state government.
Coincidence 10: In November 2009, KRS under pressure from trustees reveals some additional documents. Coincidentally the biggest smoking gun was withheld from everything including the 2009 finance cabinet audit.
The smoking gun was a document dated August 4, 2006 from Robert Kellerman at law firm of Stoll Keenon Ogden that makes the recommendation that KRS notify the seller that they want to rescind the entire land transaction and get the entire $752,000 back.
Stoll Keenon makes a strong case that KRS could have reversed the entire transaction getting all of their money back from Dr. Taylor, since they had cause for fraud against her. This letter was hidden from all auditors etc. under the guise of attorney client privilege.