FRANKFORT — State Rep. Keith Hall, D-Phelps, faces a formal ethics trial in coming weeks over questions about more than $171,000 that one of his companies collected from no-bid utility contracts.
The Kentucky Legislative Ethics Commission hearing will be open to the public and is likely to be scheduled for late September or early October, said George Troutman, chairman of the ethics panel.
The ethics panel met behind closed doors for four hours Tuesday to hear the preliminary case against Hall as presented by its enforcement counsel, Mike Malone.
Hall attended with his attorney, Brent Caldwell. State Sen. Ray Jones, D-Pikeville, was called as a witness to discuss how legislators decide which projects in their districts get tax funds.
Hall, who was first elected in 2000, declined to comment as he left the hearing with Caldwell.
"At this time, we have stopped the proceeding and we have voluntarily agreed to waive this matter to a formal hearing at a date to be determined in the future," Caldwell said.
The nine-member ethics panel may issue public reprimands, levy fines of as much as $2,000 or recommend that a lawmaker be censured or expelled.
In January, state Auditor Crit Luallen issued a report critical of Mountain Water District, a public water and sewer utility in Pike County. Among other things, the report raised questions about $171,000 in electrical work the district awarded to B.M.M. Inc., one of Hall's companies.
Luallen found that B.M.M. deliberately kept its invoices for the electrical work to less than $20,000, the district's "small purchase authority limit." Anything less than $20,000 did not have to be bid competitively or reported publicly to the district board.
"Some of these invoices were splitting up work done on the same day just to keep the final price under $20,000," Luallen said in a January interview.
Hall told auditors last year that his electrical work was arranged with the water district's then-superintendent, Will Brown. Brown refused to speak to auditors, citing litigation he was involved in after leaving his job.
As a member of the House Appropriations Committee from Pike County, Hall has helped the water district get many millions of dollars in public funds for its projects. Also, Hall's son has worked for the private management company that runs the water district.
Aside from the electrical work Luallen questioned, B.M.M. has won several million dollars in sewage line construction projects from the district. The Herald-Leader reported in 2009 that change orders had increased the final cost of Hall's sewage projects by an average of 58 percent.
The sewage projects, unlike the electrical work, were bid competitively, the auditor said.