Politics & Government

Lawsuit alleges ‘pattern of corruption’ inside Eastern Kentucky city’s public utility

Inspecting $100 bills through a magnifying glass.
Inspecting $100 bills through a magnifying glass.

A former employee says public money and equipment has been misused for personal benefit at Prestonsburg’s City Utilities Commission, an allegation the agency’s chief executive denied Friday.

Judy Ratliff was the agency’s human resources director from 2009 until August. Ratliff said in a lawsuit filed Nov. 2 in Johnson Circuit Court that earlier this year, she discovered “discrepancies in financial records and a pattern of corruption occurring within the commission by other employees.”

Specifically, Ratliff alleged that superintendent and chief executive officer Turner “Eddie” Campbell used agency-issued credit cards for “personal purchases”; that the commission bought computers and cellphones that weren’t maintained as agency property; and that, despite $1 million in revenue every month, vendors regularly called to complain about late payments because of “fiscal mismanagement” at the agency.

Before audits, Ratliff alleged, Campbell altered public financial records on the agency’s computers to conceal the misspending.

Ratliff said she met June 19 with Eddie Clark, one of the three appointed commissioners responsible for overseeing the agency, to share her concerns, and he agreed to investigate. But on Aug. 4, she was called into Campbell’s office and handed a letter that terminated her employment.

Her lawsuit seeks unspecified damages.

In an interview Friday, Campbell called the allegations in Ratliff’s lawsuit “a total fabrication.” He denied any personal use of public money or agency equipment and said he never altered the utilities commission’s financial records.

“There is no basis to any of that,” Campbell said. “We are audited every year by a very prestigious auditing firm. They would catch any attempt by us to do something like that.”

Ratliff lost her job because her position was eliminated in a reorganization, not because she was blowing the whistle on fraud, Campbell said. Other employees have assumed her duties, he said.

Ratliff’s attorney, Shane Sidebottom of Covington, said in an interview that he is confident the evidence will prove his client is telling the truth. For one thing, there is documentation to show that vendors have not been paid in a timely fashion at the utilities commission, Sidebottom said. And her conversation with Clark, the commissioner, “might or might not have been taped, I’ll just say that,” he said.

“Obviously, if we didn’t feel that there was strong merit to these allegations, we wouldn’t have brought the case,” Sidebottom said.

The utilities commission serves 9,000 water customers, 4,000 wastewater customers and 1,150 gas customers around Floyd County, Campbell said. As a municipal entity, it is not audited by the Kentucky Public Service Commission.

Prestonsburg Mayor Les Stapleton, who took office in 2015, said he has not had the chance to discuss the allegations in the suit with officials at the utilities commission. The mayor appoints the agency’s three commissioners, but so far in his term, Stapleton said, he has only been able to name one of the three.

“I won’t comment on it at this time because I’m just not familiar with their daily operations,” Stapleton said.

Stapleton’s predecessor, Jerry Fannin, is awaiting trial in U.S. District Court, charged with illegally using city money to support an arena football team in which he was an investor. The charge is punishable by up to 10 years in prison.

John Cheves: 859-231-3266, @BGPolitics