Fraud allegations turned over to Lexington council committee

Committee to review documents thursday

lblackford@herald-leader.comJuly 1, 2010 

Lexington's external auditor has turned over two sets of fraud allegations to an Urban County Council committee that is investigating the matter.

The move by Mountjoy Chilton Medley spares the committee from subpoenaing the documents from both Mountjoy and the man who made the charges, Patrick Johnston, director of the city's Division of Risk Management.

Council clerk Susan Lamb confirmed that she received a packet marked confidential from Mountjoy about 4 p.m. Wednesday.

According to committee members, Lamb will hold the documents for them to read before the committee's next meeting at 3 p.m. on Thursday. No copies will be made.

The committee is investigating whether the fraud allegations made in 2008 and 2009 have anything to do with the proposed elimination of Johnston's job, and why city officials refused to give council members any information about them.

The state auditor's office also is investigating the matter.

Both Mountjoy and the city's internal auditor found no substance to the allegations.

In addition, council members want to know why the government's internal audit board members were not informed of the allegations. Internal audit board chairman DeWitt Hisle resigned last week after council member George Myers called for his resignation over the matter.

Myers, who is chairman of the investigative committee, was not immediately available for comment Wednesday.

Mountjoy had previously refused to turn over the documents because the allegations were part of a confidential survey. The city had refused to turn them over because officials said the documents belonged to Mountjoy, even though they were part of a city audit. Johnston refused to release them as well because he said city officials said they could not promise him protection from liability if he did so. City officials have denied saying that.

Last week, Mountjoy decided to release the documents if Newberry and Johnston agreed to sign a waiver.

In a series of e-mails in 2007, Johnston questioned the procurement of insurance for the city from the Kentucky League of Cities, which fired its insurance director last week.

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