A Franklin circuit judge ruled Monday that the Executive Branch Ethics Commission has no jurisdiction over 11 Kentucky property valuation administrators whom the commission was investigating for nepotism — including former Fayette PVA Renee True.
Franklin Circuit Judge Phillip Shepherd said that all charges should be dropped against the PVAs, who are elected to set the value of property for tax purposes.
"They are entitled to have their names cleared of these charges of ethical misconduct," Shepherd said in his ruling.
"None of these PVAs is charged with paying a relative who failed to perform an honest day's work," Shepherd said. "Likewise, there is no charge that any of the family members hired or retained in the PVA offices are not fully qualified for their jobs."
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The judge noted that the PVAs hired their relatives with the permission of the revenue department, which supervises all hiring and budget matters in the offices of the local PVAs.
The PVAs had argued that they were local elected officials and that the commission was a state agency regulating only the conduct of state government employees.
In his ruling, Shepherd said the commission changed its own interpretation of state law, and it "now attempts to apply its new, more restrictive, interpretation retroactively to penalize PVAs for past decisions."
In court documents, the PVAs have not denied that they hired family members. They have only questioned whether the ethics commission has interpreted the ethics statutes correctly.
John Steffen, executive director of the commission, said Monday that commission officials would "most likely" appeal Shepherd's ruling to the Kentucky Court of Appeals.
"I was surprised by the ruling and respectfully disagree," Steffen said. "The revenue department is an executive-branch agency. All employees of the revenue department should be subject to the Executive Branch Code of Ethics."
The commission had contended that a law that prohibits officials from doing anything that would result in financial gain for a family member means that PVAs cannot hire or promote a family member.
On Monday, Steffen explained that in 2004 the commission issued an opinion saying that PVAs could not hire relatives. But to avoid placing a hardship on those relatives already working in PVA offices, Steffen said, the commission announced in 2007 that the policy would apply only to those hired after 2004.
Luke Morgan, a Lexington attorney who represented True and the 10 other PVAs accused of hiring or promoting family members, said the PVAs were pleased by the ruling.
"They agree with the judge and feel that he ruled appropriately according to the facts and the law," Morgan said.
According to documents released earlier by the commission, each of the PVAs was accused of hiring a family member or promoting a family member — parents, siblings, spouses or children.
True was accused of hiring her mother, according to commission records. True told the Herald-Leader in April 2007, when she was running for lieutenant governor, that her mother worked for the office before True became PVA. Her mother, Linda Taulbee, started at the PVA office when True's husband was PVA.
Revenue department records show that after True took office, Taulbee retired but was re-hired two months later as a seasonal employee. When that five-month position ended, True hired Taulbee again.
In Monday's ruling, Shepherd pointed to the case of another PVA, Joyce Parker of Laurel County. Parker testified during an earlier hearing that her daughter worked as a data-entry operator in Parker's office as a seasonal employee in 2006, and then worked as a full-time secretary from January 1, 2007, to August 8, 2008. Parker said her daughter was paid with county funds.
Parker said she never received a 2004 Ethics Commission letter outlining a prohibition against hiring relatives.
Shepherd said Harlan County PVA Felicia Wooten testified earlier that when she began work as the PVA on December 3, 2006, her son already worked in that office and had worked there for 51/2 years.
Parker and Wooten told the judge they did not directly supervise their children.
The PVAs had faced an administrative hearing and, if found guilty, a $5,000 fine.
In addition to True, Parker and Wooten, the PVAs named in the case were Betty Atkinson, Powell County; Bradford Bailey, Barren County; Phillip Mobley, Clay County; Vicky Reynolds, Hart County; Julie Shields, Taylor County; Roger Tomes, Grayson County; Ron Winters, Oldham County; and James Wooten, Leslie County.