Special Reports

AG asked about airport deal

Lexington-Fayette Urban County Councilman George Myers wants the state Attorney General's Office to address legal issues concerning a proposed settlement between the Blue Grass Airport board and Michael Gobb, the airport's former executive director.

Myers, who represents the 8th District, sent a letter to state Attorney General Jack Conway seeking a formal opinion.

The letter was sent Friday, two days after the airport board authorized its chairman to enter into an agreement accepting $20,000 in reimbursements from Gobb.

"I was alarmed and appalled at the fact that the airport board would try to make this type of settlement with Mr. Gobb or anybody else," Myers said just after sending the letter. Myers also reiterated his opinion that the airport board should be "reconstituted."

One of the questions Myers is seeking to have answered by the attorney general is whether the Urban County Council can block the airport board's action. Lexington's mayor chooses airport board members, and the council ratifies those selections.

"Even though the airport board is an independent board with the statutory authority and responsibility to make decisions concerning the airport, I look forward to the attorney general's response," Lexington Mayor Jim Newberry said.

The proposed agreement between the airport board and Gobb, and Myers' questions to the attorney general's office, are the latest developments stemming from a scandal involving the spending of airport money.

Gobb and three airport directors stepped down in January. In February, state Auditor Crit Luallen's office reported that seven top airport employees, including the four who resigned, had more than $500,000 in questionable or unsupported expenses from Jan. 1, 2006, to Dec. 31, 2008. The audit was started after the Herald-Leader began publishing a series of articles about the spending in November. A criminal investigation is ongoing.

According to Luallen's office, Gobb had $152,763.25 in questionable or unsupported credit card charges and an additional $28,527.68 in questionable or unsupported expenses for which direct payments were made during the three-year period.

In the proposed settlement between Gobb and the airport board, Gobb would repay $10,000 that the airport provided in July 2008 to help him with personal medical expenses — money that is not part of the credit card or direct payment transactions mentioned previously — plus an additional $10,000.

Money — $4,818.47 as of early August — and numerous items Gobb has already returned to the airport are not part of the settlement being worked out now.

Myers, in his letter, asked the attorney general what recourse the local government has if the airport board goes through with the agreement.

Myers asked whether the airport board can be held liable for repayment of funds owed the airport. He also wanted to know whether the proposed agreement or "any behavior, actions, decisions, or lack thereof" outlined in a state auditor's office report on the airport violate state or local ethics laws.

Finally, Myers has asked the state attorney general whether the proposed settlement between the airport board and Gobb, if finalized, would preclude a person or government agency from recovering any remaining funds owed the airport.

"While it is understandable that the board desires to bring this chapter to a close, this agreement fails to restore the public confidence in this institution, or make the taxpayer whole. In fact, it further breaches the public trust and serves to condone the spending practices and behavior of the past," Myers wrote.

Patrick Nash, Gobb's attorney, said that the term "questionable expenses," when it comes to the state auditor's office report, means that documentation is incomplete or oversight is inadequate.

"It doesn't mean they were improper expenditures ... Anyone who looks at those expenses, just on the face, the vast majority of them are, without a doubt, proper. They're for legitimate airport business," Nash said. As for not-so-obviously proper expenditures, investigating the facts behind them will prove they were for legitimate airport business, he said.

"Any settlement at all where he's (Gobb's) paying money back is more than fair," Nash said.

Nash said the idea behind Myers' letter to the attorney general was that there was $500,000 in improper, illegal expenditures.

"That's just not the case at all," Nash said.

Airport board attorney Tom Halbleib said Monday that he had not had time to discuss Myers' letter with board members.

"The situation with the agreement is unchanged," Halbleib added. "No agreement has been executed."

Allison Martin, a spokeswoman for the attorney general's office, said the office received Myers' letter on Monday.

"We are processing it and it is under review," Martin said. She said the attorney general's office would first determine whether to issue an opinion. If it decides to do so, completion of the opinion could take up to six months, she said.

Related stories from Lexington Herald Leader