Breaking News: Executive Director Of Kentucky Association (KACO), Of Counties, Bob Arnold, Is FORCED Out. Good Riddance?

KACo executive director Bob Arnold resigns amid spending scandal
By: ralessi@herald-leader.com
Published: Fri, 09/04 @ 12:24PM

Bob Arnold, the embattled head of the Kentucky Association of Counties, has resigned at the request of the group's executive committee.

Arnold, who said for several weeks that he had no plans to step down, succumbed to pressure from inside and outside the organization to take responsibility for a spending scandal that has tarnished KACo's image.

A statement from the executive board said a "careful review of the history of the organization demonstrates that the organization has experienced a period of significant growth over the last 8 years. However, during this period of growth, the development of systematic internal controls regulating spending has not kept pace with the growth of programs and services."

Deputy Director Denny Nunnelley will take over day-to-day operations of KACo immediately, with significant oversight from the Executive Committee, the recently named Audit and Finance Committee and the full Board of Directors, according to the statement.

Arnold declined to comment and referred questions to his attorney, Jack Smith of Louisville.

While Arnold will relinquish his duties immediately, he will continue to draw his $178,000 annual salary and retirement benefits through June 2010, when his contract ends, Smith said. The executive committee and Smith came to those terms late Thursday night, the attorney said.

"The way we interpreted the contract was that if the resignation was the request of the executive board, he would do so but be paid through June 30, 2010," Smith said.

Arnold will give up his KACo cell phone and the BMW SUV KACo provided, Smith said.

In June, the Herald-Leader published a series of stories detailing $600,000 of spending by five KACo executives in two years on travel, meals, and other expenses. More than half of the expenses were on Arnold's KACo-issued credit card.

Among the expenses were two $7,000 meals, hotel rooms costing more than $450 a night and gifts for officials and board members costing as much as $1,000.

In addition, charges to two Louisville strips clubs and $175 to a Lexington escort service showed up on the KACo credit card of the group's 2008 president, Spencer County Judge-Executive David Jenkins. A $270 charge to an escort service appeared on Arnold's KACo credit card.

The organization's executive committee launched an internal investigation after both men denied making the charges.

Earlier this week, the executive board received the results of the investigation conducted by KACo's outside counsel, Lexington lawyer Brent Caldwell, regarding the strip club and escort service charges.

Smith said the signature for the charge on Arnold's card for the escort service, which bills under the name Calypso Enterprises, was scrawled and illegible. Arnold, who is blind, often scribbles his name on documents such as credit card receipts. But Smith said the signature on the escort service document raised suspicions because it "went straight across on the line."

"I don't think Bob did that," Smith said. "The most important thing is that Bob said he didn't do it. I believe him. I think members of the board believe him."

Still, Arnold took responsibility for not catching that $270 to the escort service as well as the escort service and strip club charges on Jenkins' KACo credit card.

"It was his (Arnold's) card that was used, whether he did it or not," Smith said. "Further than that, it was Bob's responsibility to check the credit cards."

Smith said those charges weren't the sole reason for the executive committee's decision.