Here is the press release:
BESHEAR STATEMENTS DON’T MATCH FACTS IN KENTUCKY CENTRAL CASE
GOP Chairman questions how Beshear Law Firm avoided prosecution; calls on Kentucky media outlets to join Herald-Leader motion to unseal record
FRANKFORT—A timeline compiled through a series of documents obtained from Franklin Circuit Court raise questions regarding Steve Beshear’s role in a conflict of interest that arose during the rehabilitation of Kentucky Central Life Insurance in 1993.
At issue are a series of transactions involving the Bank of Louisville – represented at the time by Beshear’s law firm Stites & Harbison. These transactions were described as “…an illegal and unauthorized series of transactions…” in a court motion filed in Franklin Circuit Court.
The March 1995 motion, filed by the Liquidator of Kentucky Central Life, references seventeen counts of banking and insurance law violations as well as one count of attorney malpractice. The motion focuses on more than $15,000,000 illegally transferred from Kentucky Central to the Bank of Louisville in June 1993. Beshear’s law firm represented both the bank and Kentucky Central at that time.
Steve Beshear downplayed this conflict in a recent article appearing in the Lexington Herald-Leader by saying his firm was “…merely defending their previous work on the deal, not giving new advice.”
“Billing documents from Beshear’s law firm and other records obtained from Franklin Circuit Court raise serious questions about Steve Beshear’s claim,” charged Republican Party of Kentucky Chairman Steve Robertson. “Court documents establish that Beshear’s law firm crafted an alternative scheme to go behind the back of Kentucky Central to transfer more than $15,000,000 in assets.”
A letter from the Government National Mortgage Association (GNMA) on May 18, 1993 also reveals that Beshear’s law firm was proposing “…that GNMA change its customary requirements for permitting the securities to be transferred…” to their client, the Bank of Louisville.
The billing documents specifically place Steve Beshear in a meeting discussing the bank’s “stockpowers” and identify Beshear as a participant in a teleconference with officers of the Bank of Louisville. Both of these instances occurred prior to the sale of the securities and Beshear’s denial of his firm’s involvement with the transaction.
“Steve Beshear and his law firm were engaged in an effort to remove more than $15,000,000 in assets from Kentucky Central at a critical point during its rehabilitation phase,” stated Robertson. “It’s very possible that these funds could have helped stabilize this company at an extremely delicate time.”
The March 1995 motion went further to state that the transfer of assets facilitated through the work of Beshear’s law firm took …”clear and improper advantage of the assets of Kentucky Central to the detriment and loss of Kentucky Central’s policyholders and creditors.”
Incredibly, Beshear and his law firm are not named as defendants in the lawsuit. In fact, records from Beshear’s law firm indicate they wrote off their billing to Bank of Louisville exactly one week prior to the lawsuit being filed by Kentucky Central against their client.
“The fact that Steve Beshear and his law firm escaped prosecution for their work screams of a politically motivated cover-up,” stated Robertson. “And you can’t ignore the fact that a secretly conducted investigation of Beshear’s law firm was buried by Judge William Graham just months before Steve Beshear launched his campaign for the United States Senate against Mitch McConnell.”
A recent Herald-Leader article exposed a letter signed by Judge William Graham of Franklin Circuit Court recalling all copies of the investigation on September 19, 1995. Steve Beshear filed as a candidate for the U.S. Senate in December of 1995.
“The Herald-Leader has filed a motion in Franklin Circuit Court in an effort to obtain additional records,” stated Robertson. “I hope other media outlets will join the paper in their motion.”
ATTACHMENTS TO RELEASE:
1. 1993 Beshear Conflict Timeline
2. 3/9/93 – Engagement Letter from Stites & Harbison
3. 5/4/93 – Fax from Bank of Louisville to Stites & Harbison
4. 5/6/93 – Phone Memo by Stites Partner Richard Vance
5. 5/10/93 – Letter from Stites & Harbison to GNMA
6. 5/17/93 – Letter from Bank of Louisville to KY Central (copied to Stites Partner Fred Joseph)
7. 5/18/93 – Letter from GNMA to Stites Partner Richard Vance
8. 6/1/93 – Letter #2 from GNMA to Stites Partner Richard Vance
9. 6/8/93 – Letter from Stites Partner Richard Vance to Chemical Bank
10. 6/8/93 – Phone Memo by Stites Partner Richard Vance
11. 7/19/93 – Letter from KY Central to Bank of Louisville
12. 12/3/93 – Stites & Harbison Detailed Billing for Bank of Louisville work (denotes Beshear’s personal involvement in the project)
13. March 1995 – KY Central Motion for Partial Summary Judgment
14. 8/15/95 – Letter securing firm to conduct investigation of Stites & Harbison
15. 9/19/95 – Letter from Judge William Graham recalling all copies of the investigation report.My view?
I'll wait for the release of the secret investigation report.
Labels: Kentucky politics, Republicanism