The slimy case of Rep. Keith Hall's ethics violation is a case study on the gaps in Kentucky's ethics laws.
The short story is that in 2005 Hall voted to appropriate money that ultimately was paid to one of the companies he owns. Hall's company earned $171,000 on the job.
Tuesday, the Legislative Ethics Commission reprimanded Hall for violating the legislative ethics code. Under an agreed order, Hall denied guilt and agreed to pay the maximum penalty, $2,000. Hall's attorney delivered a check on the spot.
The fine represents 1.16 percent of the contract. That's a cost of doing business — not a disincentive.
At a minimum, House leadership should react to the Commission's finding by getting Hall out of the business of influencing how public money is spent, which he does from his seat on the House Appropriations Committee.
However, there's nothing that requires the House to discipline a wayward member and House Speaker Greg Stumbo, D-Prestonsburg, didn't seem to be in any hurry to take action against his fellow Democrat from the mountains. Stumbo said he'd wait to see the commission's report first.
Hall's self-dealing only came to light because State Auditor Crit Luallen referred it to the commission after an audit of Mountain Water District, a public water and sewer utility in Pike County.
Hall's B.M.M. Inc did electrical work for the district. Although the $171,000 in work far exceeds the $20,000 limit for a no-bid contract, the work was split up into a series of invoices of $20,000 or less,
Things get a little murky after that because the water district and the superintendent who oversaw the work refused to speak with Luallen's auditors.
Also, Utility Management Group, the private company that the Water District had paid more than $36 million in fees over five years to operate the system refused to provide state auditors with financial data.
The Water Board hired UMG without any public discussion of the proposed contract or its terms.
Attorney General Jack Conway ruled in September that UMG is covered under Kentucky open-records laws because it receives more than 25 percent of its income from public sources. UMG said it plans to appeal that ruling.
What can be salvaged from this tale?
First, the legislative ethics commission should press for stronger remedies and adopt a more aggressive stance on ferreting out conflicts of interest. It shouldn't have taken five years and another agency to uncover Hall's self-dealing.
Second, the House must take Hall's offense seriously and at a minimum remove him from the Appropriations Committee. Responding to his actions (his son also worked for UMG) with only a wink and a nod undermines the little faith the public has left in the legislative process.
Third, in the next session the General Assembly should pass legislation recommended by Conway and others to ensure private contractors conducting public work open the relevant portions of their books.
More and more government functions have been outsourced to private companies as a way to save money. We'll never know if we're getting our money's worth unless the books are opened for public inspection.