Lexington audit board votes to approve lawsuit already filed over fraud investigation

Urban County Councilman George Myers
Urban County Councilman George Myers

Lexington's Internal Audit Board voted retroactively Tuesday to authorize a lawsuit that its members had previously agreed to in a series of phone calls, without holding a public meeting.

Legal experts have told the Herald-Leader that such action represents a violation of the state's Open Meetings Law, but little recourse is available at this point.

Tuesday's 3-0 vote authorized litigation against an Urban County Council investigative committee, which subpoenaed information from Bruce Sahli, the director of the city's internal audit division.

But the lawsuit was filed last week by outside attorney Terry Sellars after Sahli talked by phone to the same three board members who voted Tuesday after the filing: Acting chairwoman Jennifer Burke, Urban County Council member Ed Lane and Finance Commissioner Linda Rumpke.

Sellars said last week there just wasn't time to hold a meeting to vote on the action.

"I can only go with what the attorney says," Burke said Tuesday.

At issue is whether the investigative committee, or by extension, the entire council, has subpoena power. Fayette Circuit Judge Ernesto Scorsone will hear the case Friday.

During discussion before Tuesday's retroactive vote, audit board members would not allow another board member to speak on the matter.

Council member George Myers is a member of the Internal Audit Board and the chairman of the council's investigative committee. He said he was not phoned by Sellars before the lawsuit, in which he is named.

The audit board members would not let Myers speak because he had recused himself from the discussion about the subpoena at a previous audit board meeting.

"I think I have a right to ask questions about how we got here," Myers said.

"I think the recusal would still be in play," Rumpke said. "I thought you were recusing yourself from the issue, not just the meeting."

Lane said Myers' dual role was clearly a conflict of interest.

The investigative committee is looking into a city employee's fraud allegations from 2008 and 2009, and how the allegations were handled by city officials. Sahli was subpoenaed because his office investigated the 2009 allegations and found them to have no merit.

Sahli gave city Law Commissioner Logan Askew a heavily redacted version of the 2009 allegation under the state's Open Records Law because Askew was mentioned in them. Sahli has refused to respond to the subpoena or appear before the committee because he said it would affect the integrity of the independent audit process.

The recent lawsuit also came up at the Urban County Council's work session on Tuesday, where Myers told council members that the committee does not plan to go to court to enforce Sahli's subpoena nor exact any penalty against him. Myers said the committee has already received most of the documents it was seeking from Sahli from other sources.

"We hope Mr. Sahli will do the same and change his mind (about the lawsuit)," Myers said.

Council members discussed how Sellars came to represent Sahli, as well as advising him to sue the committee.

"Have we ever paid an outside attorney to sue us?" council member Diane Lawless asked.

The council voted unanimously to approve paying retired Franklin Circuit Court Judge Roger Crittenden to represent Myers and the committee in court.

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