Lexington council votes for more discussion of fraud report

Lexington council votes to hear more about report

lblackford@herald-leader.comSeptember 10, 2010 

The Urban County Council on Thursday voted for more discussion of an investigative committee's report on fraud allegations and the handling of the allegations.

The 11-3 vote came after council member Ed Lane tried to delay the council from acting on the report, even though no action was scheduled for Thursday.

Lane made a motion to postpone any final action from the report, which was merely supposed to be presented to the council. Lane said he wanted more people to be able to appear before the entire council to speak about the report.

"It's fair to everyone mentioned to address the report," Lane said.

The investigative committee was formed this summer because of fraud allegations made by Patrick Johnston, the city's director of risk management. He filled out two fraud surveys, detailing problems with the way the city bought insurance in 2007 and 2008. His job was slated for elimination in 2010 as part of a reorganization.

The committee's final report asked the full council to consider referring possible reprisals against Johnston and other employees to the Ethics Commission. It also criticized the way the city's internal auditor, Bruce Sahli, investigated Johnston's concerns, and recommended reconstituting the Internal Audit Board, which oversees Sahli's work.

Other council members appeared baffled by Lane's motion, which he said was drafted by the city law department. The law department has recused itself from any dealings with the investigative committee because Johnston worked for Law Commissioner Logan Askew.

"I don't understand," said the committee's chairman, George Myers. "He could have asked any questions of the committee at any time."

In addition, Myers said, any council action on the report wasn't scheduled to happen until the week of Sept. 21.

"It wasn't necessary to block any action," Myers said.

Lane's motion passed with an amendment to ask Sahli, the internal auditor, to appear before the council to discuss the report. Sahli has refused to appear before the committee and sued Myers to block a subpoena for documents.

Vice Mayor Jim Gray said he would welcome more discussion of the report, particularly after the amendment asking Sahli to appear.

"The committee has done hard work, but if there is a need for more discussion of all the issues, then that is worthwhile — especially hearing from Mr. Sahli," Gray said. "I think serious concerns remain as to how a whistle blower was treated by our government."

Mayor Jim Newberry did not comment during Thursday's meeting but said Wednesday that he was glad the report had found no fraud.

But committee members say they hope the council will consider problems with how employee concerns are handled.

"Members of this administration continue to say there was no fraud based on financial statements," Myers said Thursday before the council meeting. "It might not be fraud, but it still might be wrongdoing."

The earliest the council might continue its discussion about the investigative committee's report would be at its work session Sept. 21.

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