Former mine inspector explains lucrative 'scams' during bribery trial of former state lawmaker

PIKEVILLE — When he wasn't inspecting coal mines for the state of Kentucky, Kelly Shortridge was — by his own admission — pocketing tens of thousands of dollars from coal operators and others around Pike County in a series of lucrative "scams."

Shortridge testified about his misdeeds Wednesday in U.S. District Court in the bribery trial of former state Rep. W. Keith Hall, D-Phelps. Shortridge said Hall arranged for about $46,000 in bribes in 2009 and 2010 so he would give favorable treatment to Hall's surface mines. Hall is expected to testify in his own defense on Thursday.

But Shortridge said he also fraudulently collected about $17,000 in the name of the Millard Little League, sometimes taking checks from coal companies he was supposed to inspect for the Kentucky Division of Mine Reclamation and Enforcement. He kept those funds for himself.

Separately, an FBI forensic accountant said, Shortridge deposited about $46,000 in cash at the bank over five years, often making deposits a few hours after he visited different mine sites for an inspection. The Energy and Environment Cabinet, which employed Shortridge, does not intend to examine his past work for possible problems, cabinet spokesman Dick Brown said this week.

Shortridge already has pleaded guilty to soliciting a bribe from Hall and awaits sentencing this summer. He told the jury Wednesday that Hall helped him establish a corporation, DKJ Consulting, in his wife's name, for the sole purpose of receiving bribes. As a state mine inspector, it was improper for him to be seen accepting payments from Hall, Shortridge said.

Hall and several of his companies and business associates wrote checks to DKJ Consulting, paid some of Shortridge's debts at Community Trust Bank and helped Shortridge get and pay a car loan, according to Tressa Whittington, an FBI forensic accountant who studied bank records related to the case.

"Virtually all of the money coming into the DKJ account was from Keith Hall or someone associated with Keith Hall," Whittington said.

Shortridge said Hall first offered him money in 2009 to help with his wife's medical expenses. Before long, tens of thousands of dollars were headed his way, Shortridge said, and Hall repeatedly told him, "If you'll help me, I'll help you."

"That was a lot of money I was being paid, and I believed I was being paid it to give favors any time they were asked to be given," testified Shortridge, who resigned from state government last year.

Among the favors he did, Shortridge said, were letting Hall illegally auger mine coal outside of his permitted area and giving Hall time to correct mining violations before issuing citations that could cost Hall time and money. Apart from bribes, Hall also gave the impression he would use his influence as a state lawmaker to help Shortridge's career, the former inspector said. State officials have testified that Hall urged them to promote Shortridge to a supervisor's position at the mine agency in Pikeville.

Several of Hall's past and present employees on Wednesday said they remember seeing Shortridge go into private, closed-door meetings with Hall at the mine owner's business office in Phelps. The subject of the meetings were unknown, but Hall sometimes asked them later to write checks of their own to Shortridge, with little explanation as to why.

Hall's estranged wife, Stephanie, who worked alongside him at their coal-related businesses, testified that a $25,000 check to DKJ Consulting from one of their firms' accounts was coded in their ledger as "consulting." But Stephanie Hall said she did not know of any consulting work provided by Shortridge. Keith Hall sometimes used that code to mean something else, she said.

"I remember incidents when it was under 'consultants,' but it was more like under-the-table kickbacks," Stephanie Hall told the jury.

After Hall's defense lawyers leapt up and objected, Judge Karen Caldwell said, "Ladies and gentlemen of the jury, you will disregard the witness' last statement."

Whittington, the FBI accountant, said that at around this same time, Hall wrote a $25,000 check to RJA Enterprises, owned by state House Majority Leader Rocky Adkins, D-Sandy Hook. No more information about that payment was provided at trial. In a statement, Adkins spokeswoman Amy Carman would say only that Adkins "has performed services in the past for Keith Hall's companies, and the check was payment for those services."

Hall spent 14 years in the Kentucky House until he was defeated in last year's primary.

This story was originally published June 24, 2015 at 6:36 PM with the headline "Former mine inspector explains lucrative 'scams' during bribery trial of former state lawmaker."