Let’s talk a little about practical politics in Kentucky.
There’s a story that Mitch McConnell once gave a lecture at the University of Louisville. McConnell walked into the classroom, walked to the blackboard and wrote MONEY, MONEY, MONEY. He turned to the class and said “Now you know everything you need to know to win an election.”
I don’t know if the story is true, but the idea is pretty right on.
Looking at the numbers at the Kentucky Registry of Election Finance shows a couple of interesting facts in some of the down ticket races.
First, in the Republicans are serious about the Commissioner of Agriculture race. James Comer has raised $103,330.00 while Steve Beshear’s hand-picked candidate B.D. Wilson has raised $48,875.00.
Second, in the democratic primary for Secretary of State Joe Graviss has dropped out Allison Lundergan Grimes has got into the race. Let’s give Joe credit for being able to see the steam roller heading his direction. This one won’t be a race it will be a coronation.
Third, Todd P’Pool, it does help to have a unique name, but aside from that P’Pool has raised $272,650.00 and is unopposed in the Republican primary. As a matter of fact at this time, with the filing deadline next Tuesday, P’Pool is unopposed in the general election. Attorney General Jack Conway hasn’t filed for reelection and hasn’t raised any money. This is where the rumors that Jack is not running are coming from.
Fourth, Democrat Adam Edelen has raised $302,745.00 in his run for Auditor. Edelen Republican opponent John Kemper has raised $4,175.18. Kemper a self-proclaimed TEA party candidate has about the chances of the proverbial snow ball. Edelen, former Chief of Staff to Gov. Steve Beshear, has support from Republicans and Democrats. The only way he doesn’t win is if he does something monumentally stupid. He will not do that.
Side note to Kentucky TEA party candidates:
The reason Rand Paul won was because his dad was Ron Paul, who had access to a ton of money and an organization. You can’t bring a knife to a gun fight and expect to win, that is what Kemper is doing. TEA party candidates are not going to win unless they can raise enough money to be on a level playing field.
Wednesday, January 19, 2011
CIO Skips Town Weeks Before Scandal Revealed
Almost 4 years ago I called into question the hiring of Kentucky Retirement Systems (KRS), Chief Investment Officer (CIO) Adam Tosh. The soon to be released Audit by Kentucky Auditor of Public Accounts Crit Luallen will hyper focus on his 4 trips to the United Kingdom in less than 1 ½ years and another trip to Dubai on the KRS dime.
However, there are much more serious and costly conflicts that need to be explored.
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.
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.
Let’s go back to the beginning.
One theory is that Tosh was hired, with his suspect background, because KRS wanted a CIO who would look the other way at things like placement agents. This same theory points to the fact that the last CIO Krimmel would not look the other way, so he was framed with the bogus land deal so he could be replaced with someone more pliable.
In our previous post the KRS February 2007 press release on the hiring of CIO Tosh implies that he came from the Pennsylvania Retirement System.
While he had worked in Pennsylvania several years prior his last employer was a firm MDL. MDL went bankrupt after pushing a hedge fund fraud on a Ohio Public Plan, and eventually their founder and President Mark Lay was convicted of securities fraud and is currently serving a 12 year term in Federal Prison.
As soon as he was hired Tosh started hiring managers using placement agents with over $3 million in his first full year in 2008. With one large Vendor he appeared in an infomercial for them, and in the same year he negotiated a secret multi-million settlement after they lost $48 million in securities lending in 2009.
CIO Adam Tosh conveniently disappeared in late June 2010 before Trustees or others even knew of the existence of placement agents and could ask him questions.
Tosh hints in the first Forbes article that some of the Trustees had a relationship with Sergeon.
“Adam Tosh, Kentucky’s chief investment officer until a few weeks ago, said Sergeon was able to command the attention of the fund board based on the performance of investments he has recommended in the past.”
Speculation is that Tosh may have signed a non-disclosure agreement when he left KRS, but hopefully this would not prevent the auditor or Securities and Exchange Commission from getting his full cooperation.
While the auditor may focus on overseas trips paid for with State dollars what is more troubling is how much travel was off the state books and paid for by placement agents.
While Tosh clearly was involved it is also clear that he could not have operated without at least tacit approval from the Chairman of the Board of the Kentucky Retirement Systems
However, there are much more serious and costly conflicts that need to be explored.
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.
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.
Let’s go back to the beginning.
One theory is that Tosh was hired, with his suspect background, because KRS wanted a CIO who would look the other way at things like placement agents. This same theory points to the fact that the last CIO Krimmel would not look the other way, so he was framed with the bogus land deal so he could be replaced with someone more pliable.
In our previous post the KRS February 2007 press release on the hiring of CIO Tosh implies that he came from the Pennsylvania Retirement System.
While he had worked in Pennsylvania several years prior his last employer was a firm MDL. MDL went bankrupt after pushing a hedge fund fraud on a Ohio Public Plan, and eventually their founder and President Mark Lay was convicted of securities fraud and is currently serving a 12 year term in Federal Prison.
As soon as he was hired Tosh started hiring managers using placement agents with over $3 million in his first full year in 2008. With one large Vendor he appeared in an infomercial for them, and in the same year he negotiated a secret multi-million settlement after they lost $48 million in securities lending in 2009.
CIO Adam Tosh conveniently disappeared in late June 2010 before Trustees or others even knew of the existence of placement agents and could ask him questions.
Tosh hints in the first Forbes article that some of the Trustees had a relationship with Sergeon.
“Adam Tosh, Kentucky’s chief investment officer until a few weeks ago, said Sergeon was able to command the attention of the fund board based on the performance of investments he has recommended in the past.”
Speculation is that Tosh may have signed a non-disclosure agreement when he left KRS, but hopefully this would not prevent the auditor or Securities and Exchange Commission from getting his full cooperation.
While the auditor may focus on overseas trips paid for with State dollars what is more troubling is how much travel was off the state books and paid for by placement agents.
While Tosh clearly was involved it is also clear that he could not have operated without at least tacit approval from the Chairman of the Board of the Kentucky Retirement Systems
A Time for Bipartisan Commonsense
Here is an example of what happens when you critically look at how much a law costs.
From the Herald Leader:
“Many of Kentucky's drug criminals would be sentenced to probation and addiction treatment instead of prison under a broad reform bill proposed Tuesday by a high-powered committee created to find cheaper alternatives to incarceration.”
I agree with J. Guthrie True.
“But defense lawyer J. Guthrie True, also a task force member, defended the cutoffs and said the whole point of the bill is to separate hardened career criminals from drug addicts. It costs Kentucky $19,000 a year to imprison someone, so the state must be more selective, True said.
"It's a move in the right direction, it's a move in the reasonable direction," True said. "I'm afraid that if we don't do this, then we'll lose a lot of what we want to do here in terms of putting the right people in prison for the right lengths of time."
The reform bill will go to the Joint Committee on the Judiciary. The members of the committee are listed below. This committee has the opportunity to do the right thing for drug criminals and taxpayers at the same. Let us hope they can come together in a spirit of bipartisan common sense.
• Sen. Tom Jensen [Co-Chair]
• Rep. John Tilley [Co-Chair]
• Sen. Perry B. Clark
• Sen. Carroll Gibson
• Sen. Ray S. Jones
• Sen. Jerry P. Rhoads
• Sen. John Schickel
• Sen. Dan "Malano" Seum
• Sen. Katie Kratz Stine
• Sen. Robert Stivers
• Sen. Robin L. Webb
• Sen. Jack Westwood
• Rep. Johnny Bell
• Rep. Jesse Crenshaw
• Rep. Joseph M. Fischer
• Rep. Kelly Flood
• Rep. Sara Beth Gregory
• Rep. Jeff Hoover
• Rep. Joni L. Jenkins
• Rep. Thomas Kerr
• Rep. Stan Lee
• Rep. Mary Lou Marzian
• Rep. Darryl T. Owens
• Rep. Tom Riner
• Rep. Steven Rudy
• Rep. Brent Yonts
From the Herald Leader:
“Many of Kentucky's drug criminals would be sentenced to probation and addiction treatment instead of prison under a broad reform bill proposed Tuesday by a high-powered committee created to find cheaper alternatives to incarceration.”
I agree with J. Guthrie True.
“But defense lawyer J. Guthrie True, also a task force member, defended the cutoffs and said the whole point of the bill is to separate hardened career criminals from drug addicts. It costs Kentucky $19,000 a year to imprison someone, so the state must be more selective, True said.
"It's a move in the right direction, it's a move in the reasonable direction," True said. "I'm afraid that if we don't do this, then we'll lose a lot of what we want to do here in terms of putting the right people in prison for the right lengths of time."
The reform bill will go to the Joint Committee on the Judiciary. The members of the committee are listed below. This committee has the opportunity to do the right thing for drug criminals and taxpayers at the same. Let us hope they can come together in a spirit of bipartisan common sense.
• Sen. Tom Jensen [Co-Chair]
• Rep. John Tilley [Co-Chair]
• Sen. Perry B. Clark
• Sen. Carroll Gibson
• Sen. Ray S. Jones
• Sen. Jerry P. Rhoads
• Sen. John Schickel
• Sen. Dan "Malano" Seum
• Sen. Katie Kratz Stine
• Sen. Robert Stivers
• Sen. Robin L. Webb
• Sen. Jack Westwood
• Rep. Johnny Bell
• Rep. Jesse Crenshaw
• Rep. Joseph M. Fischer
• Rep. Kelly Flood
• Rep. Sara Beth Gregory
• Rep. Jeff Hoover
• Rep. Joni L. Jenkins
• Rep. Thomas Kerr
• Rep. Stan Lee
• Rep. Mary Lou Marzian
• Rep. Darryl T. Owens
• Rep. Tom Riner
• Rep. Steven Rudy
• Rep. Brent Yonts
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