Report: Legislative Research Commission badly managed by lawmakers, leaders

The bureaucracy that runs Kentucky's $54 million a year legislative branch is dysfunctional, suffering from a lack of communication, seemingly arbitrary salaries and special treatment for employees who are favored by powerful bosses, according to a 9-month-old report released late Monday.

The performance audit of the Legislative Research Commission — still a 68-page draft, with some portions left blank — had been kept under wraps by House Speaker Greg Stumbo and Senate President Robert Stivers since the National Conference of State Legislatures submitted it in April. Stumbo and Stivers agreed to post it on the LRC's website following unfavorable publicity about the withheld report.

Overall, the report described the LRC as a "frustrated" workplace whose 388 employees struggle with poor morale. Decisions about hiring, promotions, assignments and pay are handed down without explanation or justification by the "front office," where the LRC director and a few close aides privately consult with the House speaker and Senate president, a team of four auditors wrote.

In recent years, "the primary avenue to getting a raise" at the LRC was a personal request to the LRC's then-director, Bobby Sherman, which led to "pay inequities" throughout the agency, the auditors wrote. Legislative leaders awarded Sherman a 47 percent pay raise in 2008, taking him to $195,000 a year, even as most of his employees saw little to no extra money that year.

"LRC staff are frustrated by an opaque, closed-door process that they do not understand," the auditors wrote.

"Staff do not know how to develop their careers in a management environment that offers few clues about how performance connects to promotion, provides little explanation about how pay decisions are made, inconsistently sets minimum qualifications for jobs, and rewards certain individuals with pay increases while other requests for an adjustment languish," they wrote.

Separately Monday, an LRC employee fired last week by House Majority Whip Johnny Bell, D-Glasgow, alleged in court documents that Bell's decision was motivated in part "by his desire to have an intimate sexual relationship" with another woman he wants to hire. Bell has denied that claim.

Notably missing from the draft report was any mention of sexual harassment of LRC employees by lawmakers, which is what generated calls for the audit in October 2013. Several women on the LRC staff accused Rep. John Arnold, D-Sturgis, of inappropriate touching and comments. Arnold denied the allegations but resigned, and in the ensuing controversy over hostile workplace lawsuits, Sherman quit as LRC director.

"I'm a little dumbfounded that they didn't address the critical issue: Is this sort of behavior a pervasive problem or not?" asked Rep. Stan Lee, R-Lexington, newly selected as House minority caucus chairman. "I have to believe that this is one of the things we wanted to know from the report. That was the genesis for all of this in the first place."

It's not clear whether Kentucky's legislative leaders asked the auditors to investigate that sensitive subject. The 2013 project proposal by the National Conference of State Legislatures was limited to conducting "a review of LRC staff operations," including personnel policies, staff structure and management practices. There was no reference to sexual harassment or hostile workplace issues.

However, questions long have dogged lawmakers over how they interact with LRC employees.

In the mid-1990s, Kent Downey was the LRC's director of operations for the House of Representatives. Downey — a friend of several House Democratic leaders — ran a business from his Capitol office that organized golf outings, often with exotic dancers as entertainment. Downey pleaded guilty in 1997 to federal prostitution and gambling charges, and was sentenced to probation. Information about three state legislators, a state employee and a Frankfort lobbyist, none of them charged, was sealed in his court file.

Stumbo and Stivers did not respond directly to the Herald-Leader's questions Tuesday about the audit, which will cost $42,410. In a prepared statement sent by email, Stumbo said, "I look forward to working with the Senate on some long-needed administrative changes in the LRC."

Stumbo did not say what such changes might be or when they might happen. Sixteen months after Sherman resigned, the LRC still does not have a director. Marcia Seiler, who runs the legislature's Office of Education Accountability, has filled in as acting director.

Sen. Tom Buford, R-Nicholasville, said Tuesday he was dismayed by the report's contents. Buford wants the legislature to hire "a good human resources firm to come in here and set up the sort of professional hiring and salary structure that we need."

"From all accounts, it looked like if you were at the LRC, you needed to get connected into the LRC director's office or with someone in legislative leadership if you ever wanted to get a promotion or a pay raise," Buford said. "That's not healthy. That's not how you keep good people. In any private business, I'd think employees would have been throwing a fit over this sort of conduct."

In one chart, the report showed that salaries for LRC secretaries skewed across a wide range, with little connection to seniority. One secretary recently started for about $45,000 a year, roughly the same as another secretary who has worked at the Capitol for more than 20 years. A few secretaries make less than $25,000 a year, while others with the same seniority earn $10,000 to $15,000 more.

LRC staff members who run the legislature's committee system went years without meeting with one another to share ideas or discuss problems, which was typical of the lack of internal communication at the agency, the auditors wrote. Employees are told little about their expected duties or how well they're performing, resulting in an unhealthy environment where rumors abound, they wrote.

For younger employees in particular, the LRC does not seem like an attractive place for a professional career, they wrote.

"We believe the LRC staff is approaching or already has developed a critical mass of employees with 'red zone' attitudes and behaviors," the auditors wrote, describing "red zone" characteristics as distrust, anxiety and cynicism.

The auditors traced the LRC's condition back to Vic Hellard Jr., a respected political fixer and former state representative who was the agency's director from 1977 to 1995.

Hellard ran the LRC "through strength of character (and will)" but without much in the way of "structure, rules, guidelines or paperwork," the auditors wrote. After Hellard, who died in 1996, retired 20 years ago, the General Assembly failed to fill the void he left with the sort of modern, organized support system that many other state legislatures employ.

Buford, a state senator since 1991, said he always has viewed the LRC as the exclusive domain of a powerful director, the House speaker and the Senate president. And yet, Buford added, several hundred people work there, and it spends tens of millions of taxpayer dollars.

"All of the directors — and I was there with Vic Hellard, I was there with Bobby Sherman — they got up and made the decisions based on whatever they wanted to do, provided it was all right by the speaker and the president," Buford said. "There are other legislative leaders who are also in charge of running the LRC, but ultimately, it comes down to the House speaker and the Senate president."

This story was originally published January 27, 2015 at 8:18 AM with the headline "Report: Legislative Research Commission badly managed by lawmakers, leaders."