Special Reports

KACo chief defends leadership

State Auditor Crit Luallen
State Auditor Crit Luallen

LOUISVILLE — The executive director of the Kentucky Association of Counties, under fire because of hundreds of thousands of dollars in spending by the group's leaders, faced several hundred local officials Thursday and extolled his organization's accomplishments.

For more than 20 minutes, KACo Executive Director Bob Arnold recounted improvements in his organization's lobbying, insurance and financial services, barely alluding to the issue of expenses.

"Any mistakes we made, we made unintentionally and we made because we had our eye on the big ball and took our eye off the little ball," Arnold said in concluding. "Are we perfect? Hell, no. I've never said I was perfect. But I'll tell you what we do do: We work for you honestly."

Roughly half of the officials, some standing two deep along the walls to hear the speech, gave Arnold a standing ovation.

The Herald-Leader last month found that Arnold and four other KACo executives spent $600,000 on travel, meals and other expenses in two years.

Nearly $900 was charged on KACo-issued credit cards to two Louisville strip clubs and a Lexington escort service from May 2007 to February 2008.

One of the escort service charges appeared on Arnold's card, although he has denied making it. Arnold, who is legally blind, said in earlier interviews that no one properly reviewed the credit card statements, and he didn't learn of the charge until the Herald-Leader's review.

Arnold told the packed hotel ballroom — where more than 500 elected county officials were attending the Kentucky County Judge-Executive Association and Kentucky Magistrates and Commissioners Association summer conference — that the group needs to look forward, not back.

"We can't change it," he said. "Get over it. Quit dwelling on it."

It was Arnold's first public appearance since the Herald-Leader's articles about KACo spending.

Organizers of the conference squeezed him into the schedule after he asked last week to be added to the speakers' list.

He appeared immediately before State Auditor Crit Luallen, who is now investigating KACo's spending.

'More transparency'

Luallen met the spending issue head-on.

"Boards primarily funded by public dollars must be ultimately responsible to the taxpayers," she told the officials. "That's where we, as public leaders, have to step up and be sure that the leadership of those boards ... have the tools they need to provide the proper oversight."

KACo receives taxpayer money in the form of dues from counties, as well as millions in county payments for financing and insurance services.

She responded directly to the theme of Arnold's speech — that KACo has improved its programs.

She noted that officials at Blue Grass Airport offered a similar defense last year after the Herald-Leader reported on the expenses of its leaders.

"The airport was running well. It was running effectively. That wasn't the issue," Luallen said. "The issue was what kind of controls were in place to make sure that the dollars were being spent in the most effective and efficient way."

She said her office's audit of KACo, which will probably take several months, should provide "more transparency on the expenditures of these public dollars so there aren't questions raised in the future that impact those valuable services to you out in the counties."

Luallen credited the Herald-Leader for focusing on spending at public boards, such as the airport, the Lexington Public Library, the Kentucky League of Cities and KACo.

A 'cold shoulder'

While county officials buzzed about KACo in the hallways of the Hyatt Regency Hotel, where the conference was held, there was little open discussion about it in the main meetings. At one point, the magistrates and commissioners tabled a resolution in support of KACo.

Pike County Judge- Executive Wayne T. Rutherford said he had received a strong response from his colleagues to a letter he sent them Wednesday that blasted KACo officials for "spending like drunken sailors" and offered suggestions for reforms.

Many judge-executives and magistrates told him it was "something that ought to have been said," Rutherford said.

However, he added that he had "been getting the cold shoulder from a few of the board members and the leadership of the organization."

Many of the local officials on KACo's board downplayed the significance of the expense issues, saying that they have faith it will be swiftly rectified.

"KACo will take care of itself," said Lincoln County Judge-Executive R.W. " Buckwheat" Gilbert. "The spending issues will be corrected, I can tell you that."

But other officials said the public is still upset and policy changes may not be enough.

Daviess County Judge-Executive Reid Haire said the details of KACo's spending have angered some of his constituents, who were still seething from a new tax the cash-strapped county imposed in January.

"It's embarrassing for us," Haire said. "It creates a credibility issue for us as local officials."

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