BOMBSHELL: Former Kentucky Lt. Governor Steve Henry To Plead Guilty To Criminal Charges.

Steve Henry expected to plead to criminal charges
By R. G. Dunlop

Former Kentucky Lt. Gov. Steve Henry is expected to accept a plea agreement Tuesday afternoon that would resolve three alleged criminal violations of state election-finance laws in connection with his unsuccessful 2007 campaign for governor.

His assent to the agreement would conclude a lengthy investigation by state police detectives and special prosecutors, and would mark the end of the latest in a series of legal and ethical missteps by Henry, who was active in politics for nearly two decades until his 2007 defeat.

Under the agreement, Henry would tender what is known as an Alford plea and be sentenced to 12 months in jail, conditionally discharged for two years. Assuming that Henry did not engage in further criminal activity during that time, he would not be incarcerated but would pay a $500 fine.

The Alford plea would allow Henry to maintain his innocence while acknowledging that there is sufficient evidence to convict him. It also would represent the third time in little more than six years that he has resolved government allegations of wrongdoing without admitting guilt.

The agreement calls for Henry to waive possible indictment by a grand jury on felony charges, and instead plead to three misdemeanors:

*Attempting to knowingly accept and/or make contributions in support of his candidacy for governor in 2007, using a federal campaign account Henry had established to explore a possible race for U.S. Senate.

*Attempting to knowingly make and/or receive contributions in connection with the governor’s race other than through a duly appointed campaign manager, treasurer or a registered committee.

*Attempting to knowingly accept corporate contributions during his campaign for governor.

The 56-year-old Henry is scheduled to appear at 4 p.m. before Franklin Circuit Judge Thomas Wingate, who would decide whether to accept the agreement worked out by Special Prosecutors James Crawford and Rob Sanders, along with Henry and his attorneys.

When contacted late Monday afternoon, Henry said he did not have time to talk and requested that a reporter telephone him again. But he did not respond to return calls. Both Crawford and attorney Brian Butler, who represents Henry, declined to discuss the case in advance of the hearing.

Henry finished a distant third in the May 2007 Democratic primary election, behind Steve Beshear, who was elected governor the following November, and businessman Bruce Lunsford. In addition to serving two terms as Paul Patton’s lieutenant governor, Henry also was a Jefferson Fiscal Court commissioner in the early 1990s.

The criminal charges evolved from a complaint filed with the Kentucky Registry of Election Finance by a former campaign worker, Leslie Holland. In March 2007, she accused Henry of misusing the federal fund-raising account that he said was set up in connection with the 2008 race for the U.S. Senate he was considering.

Holland alleged that Henry had failed to comply with laws regulating so-called federal “testing the waters” accounts, and had used his to lay the groundwork for his gubernatorial campaign. Kentucky law does not allow for exploratory committees in state races.

Holland also contended that Henry accepted corporate contributions, which is prohibited by federal and state law.

Crawford was appointed to investigate, and eventually enlisted the help of Sanders, the Kenton County commonwealth’s attorney. What followed was a 32-month investigation that also included a separate $10,000 civil settlement by Henry with the Registry of Election Finance.

In settling his case with the Registry last September, Henry also agreed to stop raising money to recover what was left of more than $600,000 in loans he made to his 2007 gubernatorial campaign.

At the time Holland filed her complaint, Henry characterized her as a “disgruntled former employee” and dismissed her allegations as “completely unfounded.”

Asked Monday about the expected plea agreement, Holland said “there’s a great deal of vindication” after having her integrity challenged. “I was being called a liar.”
Previous problems

Henry’s recent campaign-finance problems were not his first brush with the law.

In September 2003, he paid the federal government $162,000 to settle allegations that he defrauded Medicare and Medicaid over a period of more than four years while he was a teaching physician at University Hospital.

Henry also denied wrongdoing in this case. He said it was only about “billing errors,” blamed a subordinate and added: “They still don't get it at the U.S. attorney's office.”

Federal prosecutors retorted that the case had nothing to do with “mistakes or isolated errors,” and that Henry, not the subordinate, was responsible.

After the federal case was resolved, Henry withdrew a pledge to donate $100,000 to his alma mater, Western Kentucky University. Although he continued to subsequently assert that he had made such a commitment, he did not mention that he had withdrawn it or that less than $5,900 of the pledge actually was paid.

Henry, an orthopedic surgeon, was removed from the University of Louisville Medical School faculty in 2007 after repeatedly missing surgical procedures performed by residents under his supervision and being unavailable when on call for emergencies.

In that instance, he blamed Dr. John R. Johnson, chairman of the orthopedics department, asserting that Johnson had overreacted and that the problems arose from a long-running disagreement over a billing service run by Johnson.

Before Henry was removed from the faculty, Johnson also challenged Henry’s assertion that he had donated $50,000 from his U of L salary. Johnson characterized those comments as “completely inaccurate,” and said Henry hadn’t been paid a salary by U of L since 1996.

And In 2001, while Henry was lieutenant governor, State Auditor Ed Hatchett concluded that by using the volunteered services of state workers to plan his Oct. 27, 2000, wedding to Heather French, and to schedule her personal business, Henry potentially saved himself thousands of dollars.

But Hatchett also concluded that the employees volunteered and that no state funds were spent on the wedding. Henry denied wrongdoing, but reimbursed the state for $1,800 in wedding-related expenses.

The state Executive Branch Ethics Commission, which reviewed the audit, found insufficient evidence to determine that Henry had violated state law.