FRANKFORT — State Rep. Keith Hall, D-Phelps, broke the law by using his public office to benefit himself, the Kentucky Legislative Ethics Commission ruled Tuesday as part of a plea deal.
In a rare punishment of a legislator, the commission fined Hall $2,000 and notified House Speaker Greg Stumbo, D-Prestonsburg, that it had publicly reprimanded Hall.
Specifically, Hall voted in 2005 to appropriate coal-severance taxes for a Pike County sewer project from which one of his companies was given more than $171,000 in no-bid contracts.
"The commission has repeatedly stressed to members of the General Assembly that all legislators need to carefully scrutinize the appropriations which are part of the state budget, particularly if those appropriations are directed to a purpose or an area in which the legislator may have a business or personal relationship," the commission said in its ruling.
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A key witness, Will Brown, the former superintendent of Mountain Water District in Pikeville, died in August just days before he was scheduled to testify to the commission. Without Brown to say how Hall's deals were arranged, the case was weakened, leading to a plea deal, the commission said.
"He passed away, and we never did find out exactly what he had to say," the commission's enforcement counsel, Mike Malone, said at Tuesday's hearing.
Brown evidently died of a heart attack, Malone said.
Originally, the commission planned to hold a public trial this month with a potentially more serious ethics charge against Hall, of violating a rule prohibiting legislators from certain kinds of public business contracts.
In the plea deal, Hall denied guilt but agreed that enough evidence existed to make a case against him. Hall did not attend Tuesday's hearing.
"Representative Hall is pleased to have this matter concluded. We believe it is a fair resolution of the case," Hall's attorney, Brent Caldwell, said.
Caldwell handed the commission a $2,000 check from Hall moments after the plea deal was signed.
"The truth of the matter is, we did the most that we could do," said Anthony Wilhoit, the commission's executive director.
In January, state Auditor Crit Luallen issued a report critical of Mountain Water District, the public water and sewer utility in Pike County. Among other things, the report raised questions about 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 January.
As a member of the House Appropriations Committee, the Pike County lawmaker 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.
Hall was elected to the state House in 2000. He resigned the previous year from the Pike County school board while the state Education Department investigated him for allegedly trying to influence district hiring. The former school superintendent and others had filed complaints against him.