Politics & Government

State agency under investigation for ‘irregularities’ in surplus vehicle auction

Supreme Court Chambers at the Capitol in Frankfort, Ky., on Aug. 18, 2016.
Supreme Court Chambers at the Capitol in Frankfort, Ky., on Aug. 18, 2016. palcala@herald-leader.com

Attorney General Andy Beshear’s office has opened an investigation into employee-only vehicle auctions held by the Administrative Office of the Courts.

The investigation is focused on “possible irregularities related to the sale of surplus vehicles,” said AOC spokeswoman Leigh Anne Hiatt.

The AOC began an internal review after receiving requests for information about surplus vehicle sales from the Herald-Leader and the attorney general’s office, she said. The AOC and attorney general are “currently working together on an investigation,” Hiatt said.

An AOC employee has been placed on leave pending the outcome of the investigation, she said. Hiatt refused to identify the worker.

Beshear’s office would neither confirm nor deny the existence of the investigation.

The AOC is the administrative arm of Kentucky’s court system. It administers the budget for the judicial branch of state government, is responsible for court facilities, maintaining court statistics, administering personnel policies and payroll. It has an annual budget of $74.85 million.

When the agency has surplus equipment, it auctions off those items. Often, these auctions are limited to the 225 employees at the AOC’s Frankfort headquarters.

In an “employees only” surplus sale on March 10, for example, items ranging from laptop computers to bookshelves were sold to employees, with no price tags higher than $15.

Such auctions are not allowed in the executive branch of state government, but the judicial branch is not subject to the same laws regarding surplus sales.

Pamela Trautner, spokeswoman for the Finance and Administration Cabinet, said all surplus sales in the executive branch must be open to the public. Employees can still buy products, but “employee only” sales are forbidden.

Late Thursday, Hiatt said the AOC has temporarily halted its surplus sales and that “practices related to how these sales are conducted are currently under intense scrutiny.”

The attorney general’s office requested information in late March from the AOC on how one individual handled the sale of surplus vehicles, according to Hiatt. She would not identify the individual.

In a September 2014 email obtained by the Herald-Leader, J. Scott Brown, the AOC’s executive office of administrative services, told all AOC employees at the agency’s Vandalay Drive headquarters in Frankfort that five surplus vehicles — four Chevrolet Impalas and one Chevrolet Express van — were for sale. Oddly, the email said bids were required by Sept. 10, but it was sent Sept. 11.

Citing the ongoing investigation, the AOC declined to provide the Herald-Leader with any details of the sale of those vehicles or others, including who bought them and at what price.

“The court system is committed to conducting business in an open, transparent manner,” Hiatt said. “As such, the AOC does not comment on pending investigations, but will be able to provide more information when this investigation has concluded.”

Kentucky’s Open Records Act would require any other public office to release documents about the vehicles, but the judicial branch of state government is not subject to the law. The court system’s exemption is rooted in the constitutional separation of powers: Court records are part of the judicial process and subject only to the courts’ control. The state’s chief justices have repeatedly rebuffed suggestions that it voluntarily make its administrative arm subject to the law.

This week, some employees in the AOC were told to sign a confidentiality agreement that prohibits employees from sharing information relating to investigations and the bidding process for services or goods with the public, according to a copy of the form obtained by the Herald-Leader.

“Employees shall use their best efforts to prevent and protect confidential information, or any part thereof, from disclosure to any person other than AOC personnel having a need for disclosure in connection with AOC job-related use of the confidential information,” the document says.

Hiatt said the confidentiality agreement has been used by the AOC since 2015 and is “a standard agreement that all employees of the Department of Administrative Services are required to sign because their work involves access to confidential documents.” She said two employees who were recently assigned new duties were asked to sign the document this week.


Daniel Desrochers: 502-875-3793, @drdesrochers, @BGPolitics