Lexington Herald Leader Targets New House Speaker, Greg Stumbo's Ethics.

Read more here or excerpts below:

Call for ethics targets Stumbo
By John Cheves

FRANKFORT — Greg Stumbo, Kentucky's new House speaker, has been paid by a variety of businesses with interests before the state legislature, including coal mines, banks and law firms, disclosure forms and securities records show.

Now that Stumbo runs the House of Representatives — with power to help decide which bills succeed and who gets public funds — an ethics watchdog said he must avoid any actions as speaker that would benefit him personally.

"This is a great opportunity for Greg to show us that his progressive side can overrule the financial interests he has with some of these companies that want things from him," said Richard Beliles, chairman of the non-profit Common Cause Kentucky.

During his stint as the Democrats' House majority leader, from 1985 to 2003, Stumbo was criticized for using his Frankfort office to benefit financially back home in Prestonsburg.

For example, Stumbo — an attorney by trade — fought new restrictions on workers' compensation claims while his small law firm made more than $1 million a year from workers' comp cases.

Stumbo also used state funds to build StoneCrest, a Prestonsburg golf course. Then he privately developed and sold several houses around the course, calling it his contribution to local economic development.

In a statement his office issued Thursday, Stumbo said he always obeys Kentucky's conflict-of-interest law for politicians.

"I am keenly aware of the ethical rules and financial disclosure laws that govern those in elected office and have complied with them fully. I will, of course, continue to do so in my new role as House speaker," Stumbo said.

"Our forefathers saw the wisdom of having a part-time citizen legislature and understood that having private interests should not preclude public service," Stumbo added. "I am proud of my work outside of the Capitol and strongly believe that it will help me be an effective House Speaker."

Coal, banks and the law

Stumbo, 57, lives in Lexington with his wife, a real estate agent with Keller Williams Bluegrass Realty, and their young daughter. He still owns a house in Floyd County and remains registered to vote there, so he is legally eligible to represent the 95th House district, 117 miles away.

After four years as the state's attorney general, Stumbo returned to the House chamber in 2008.

Over the past two years, his income included:

■ A reported $41,000 in annual compensation as a board member at Energy Coal Resources, based in Ashland, according to Securities and Exchange Commission records. The U.S. Energy Department ranks the company 23rd in the nation among coal producers.

The company's chief executive is Stephen Addington, whose family long has been active in Kentucky coal and politics, and has successfully lobbied for tax breaks for the coal industry. Addington employs Stumbo's No. 2 in the House, Majority Leader Rocky Adkins, D-Sandy Hook, as his company's director of public affairs.

Addington did not return a call Thursday.

■ An undisclosed sum as co-owner and board member at First Guaranty Bank, based in Martin, according to his legislative financial-disclosure form.

The bank became a source of embarrassment to Stumbo in 2007, when his former campaign treasurer, Pamela Justice, pleaded guilty in U.S. District Court to cocaine trafficking. Prosecutors said that Justice illegally tried to shield her assets from seizure through a home mortgage approved by First Guaranty Bank's board of directors, with the help of at least one bank employee.

Prosecutors did not accuse Stumbo of wrongdoing. Bank officials did not return a call Thursday.

■ Stumbo describes himself as "of counsel" at Erdmann & Stumbo, the Richmond law firm of his son Brooks Stumbo, which handles a variety of cases. Stumbo is not required by the ethics law to reveal the names of his clients.

■ On his financial-disclosure form, Stumbo lists a Delaware corporation called "Braveheart Investments Inc." as one source of income and an asset worth at least $10,000. He provides no other information and is not required to under the ethics law.

Public records indicate that Braveheart owns a 1996 Piper airplane valued at more than $200,000, with a rear cabin that features four club seats, a refreshment bar and an executive writing table, but they reveal nothing else.

Stumbo spokesman Brian Wilkerson said Braveheart simply existed to own an airplane used by Stumbo, who is a general-aviation pilot. However, the plane has been sold, Wilkerson said. He had no further information.

The Kentucky constitution states that any lawmaker "who has a personal or private interest" in a bill "shall disclose the fact to the House of which he is a member, and shall not vote thereon upon pain of expulsion."

But Stumbo and many other lawmakers routinely sponsor and vote on bills that help them financially in their jobs outside the legislature.

Law interpreted narrowly

The Legislative Ethics Commission — which is appointed by the House speaker and the Senate president — interprets the conflict-of-interest law so narrowly that no legislator has been punished for breaking it in decades.

As the ethics commission sees it, lawmakers can pass laws or award money in ways that benefit them privately, so long as they also benefit at least one other person, said Anthony Wilhoit, the commission's executive director.

So the bankers and insurance agents that dominate the House Banking and Insurance Committee's membership are free to push measures that help their industries, because other bankers and insurance agents benefit, too.

"The ethics laws definitely need to be strengthened, although I don't know that we're going to see that happen anytime soon," said Beliles, of Common Cause. "It's shocking when you consider that the ethics commission has not taken any punitive action in this sort of thing, that it's become standard practice."

Reach John Cheves at (859) 231-3266 or 1-800-950-6397, Ext. 3266.