Wednesday, May 16, 2007

The Purchasing Governor

This is unsurprising. Governor Fletcher opposes campaigning. Instead, he is seeking election via checkbook. Initially, he awarded various grants. One of them sans a reason. Now, this story arises. For unknown reasons, a Fletcher supporter’s project was delayed. The supporter complained. The Governor pressured. Miraculously, project approved. Governor Fletcher’s administration cannot survive one news cycle without corruption. Why should anyone support him?

From the Lexington Herald-Leader:

After one of Gov. Ernie Fletcher's chief backers complained that the state had delayed approval of financing for one of his projects, the administration reversed its position and set a meeting date specifically to take up the issue.

The Kentucky Private Activity Bond Allocation Committee then gave the Northern Kentucky condo development, called the Ascent, a green light on Nov. 7, 2005 --in time for Fletcher to appear with that supporter, William P. Butler, in a groundbreaking ceremony nine days later. Documents obtained by the Herald-Leader through the state open records law show that attorneys from the state's Finance and Administration Cabinet initially wanted the committee to hold off on approving any bonds for projects until a court case involving the committee was settled.

But three days after Butler, the president and CEO of development company Corporex, sent his letter to the governor's office, one of the finance cabinet lawyers responded to the project's representatives that the bond committee would consider the Ascent after all at the Nov. 7, 2005, meeting. Fletcher said he didn't influence any decisions about the Ascent. "We didn't do anything unusual for that project," he said Friday. "But I'm not familiar with the details of that at all. I'm sure I probably saw the letter, but we get thousands and thousands of them."

Fletcher spokeswoman Jodi Whitaker later called back to say that Fletcher "didn't recall" seeing the letter. Fletcher described Butler, a Democrat who has been one of the governor's top campaign fund-raising chairmen, as a "good friend" and key supporter. But he noted that he has had to say no to Butler before, such as declining to push for $17 million in state funding for a market place development in Covington that Butler wanted.

In the case of the Ascent, a $55 million tower that includes 72 condos, Fletcher said it was good for Covington and the state. Fletcher attended the "cloudbreaking" ceremony for the finished building last month. "If anyone comes with a good project like that ... we'll do everything we can to make sure that those projects are accommodated," Fletcher said. "That's been my direction to the cabinet, regardless of who it is."

However, in the fall of 2005, the timeline for the Ascent project became a point of controversy. Starting on Sept. 13, finance cabinet officials exchanged e-mails with the attorneys handling the financial approvals for the Ascent and a Newport project known as SouthShore. Although neither project was built with state funds, they needed the bond allocation committee's approval for financing.

At one point, the projects' attorney, Dean Spoor, wrote that the Ascent "is requesting a hearing date before the end of October" because an initial groundbreaking ceremony that was to include the governor and local officials already had been scheduled for Oct. 26, 2005. "We do not want to be presumptive in having a groundbreaking before KPABAC has a chance to hold its hearing," Spoor wrote.

One finance staff member, Jason Hamilton, wrote in an e-mail to colleagues, "I don't like it when counsel tells me when we are going to have our meetings."

On Sept. 21, Joseph B. Howard, then the executive director of the finance cabinet's legal services office, wrote to Spoor saying that a case pending in the Kentucky Court of Appeals would delay any decisions by the bond committee indefinitely. A Franklin Circuit judge had ruled in March 2005 that the bond committee failed to do proper groundwork in making a decision about another Northern Kentucky project.

"Therefore, it may be some time before we get clear direction from the court as to KPABAC's actions in economic developments such as yours," Howard wrote to Spoor. Five days later, Butler wrote to Fletcher asking for the bond committee to act on the Ascent project "by special meeting."

"This position on the part of Mr. Howard ... has serious ramifications not only to our project, but to the state at large," Butler wrote. "We do not understand a policy that would stop all work simply because of a filing of a complaint on which there has been no ruling."

On Sept. 29, Howard sent another letter saying the board would indeed meet on Nov. 7, 2005, to consider the applications for both the Ascent and SouthShore projects. Howard, now an attorney in private practice in Lexington, declined to discuss the reversal, saying only "the documents speak for themselves."

F. Thomas Howard, director of the cabinet's office of financial management, said Friday that Joseph Howard's initial response to delay any committee decisions was a "knee-jerk reaction."

After finance cabinet officials discussed the situation further, they decided they shouldn't put everything on hold, Thomas Howard said. In a statement, Butler said he tries to reach the highest levels "whenever the state is making a mistake."

"There is probably no connection between my letter to the governor and the conversations between finance and the bond attorneys," Butler said. "But if there was, the governor acted correctly, as the Ascent project is putting Kentucky on the map."

Thomas Howard said he never saw Butler's Sept. 26, 2005, letter and wasn't aware of any pressure put on the finance cabinet by the governor's office or administration officials. But he said he couldn't remember specifically who gave the final order to move forward with the bond committee's public hearing on the Ascent. "I don't recall how exactly that decision was made," he said. "I just honestly don't remember."

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