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Scandalous KRS Report Could Cause Heads To Roll

March 13th, 2012 · 16 Comments

So… that rumored report about Kentucky Retirement Systems we mentioned yesterday?

Turns out that all hell really is breaking loose in Frankfort this week.


The past couple years we’ve spent discussing the KRS here will likely have been in vain. Primarily because Frankfort does not care about doing the right thing.

But it looks like we were spot-on when it came to our concerns that the state auditor’s KRS/placement agent shenanigans were a literal whitewash.

The 32-page report indicates that the Auditor of Public Accounts’ examination was, uh, extremely flawed and its independence was questionable at best. Numerous untrue statements regarding placement agents and numerous omissions of the facts. The audit was so biased toward the KRS management, in fact, that it smells like the both the SEC and FBI investigations will be broadened to include those responsible for the audit. Other areas of state government could also be pulled in.

Is this the next BOPTROT?

Because the get out of jail free card is slowly disintegrating.

UPDATE: Yes, most of this report is for the personal vindication of Chris Tobe, who has spent the past couple years begging people to write about the KRS scandal. Yes, it’s probably (mostly?) built for his ego and personal gain. Yes, it’s produced by his attorney who is paid for with your tax dollars. But take it for what it is: an opportunity to reexamine the KRS whitewash and the ongoing shenanigans in Frankfort.

You can say what you want about him but the KRS facts don’t change. So remove Tobe from the argument – because he’ll eventually be ousted from the KRS board by the more corrupt folks, anyway.

The facts remain: the KRS mess is still a nightmare, the Beshear crew are still trying to sweep it all under the rug, Crit and crew played pat-a-cake by knowingly not asking questions that needed to be asked and it all boils down to people getting rich.

Now you know why the feds are continuing to dig around.

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16 responses so far ↓

  • 1 FreeManNKy // Mar 13, 2012 at 9:09 am

    Wow. After all I heard about Crit doing such a great job on her watch. Guess she was asleep at the wheel on this debacle.

  • 2 jake // Mar 13, 2012 at 9:12 am

    No, she wasn’t asleep at the wheel.

    I’ve written about this for how long?

    She and her staff allowed this to happen. They produced the audit.

  • 3 Jocko Flocko // Mar 13, 2012 at 10:42 am

    Oh my, so Saint Crit might have muddy robes? Shazam, now who would have thunk it? Funny how often the feds have to clean up Kentucky corruption. There’s going to be a loud BOOM on this one.

  • 4 Davi // Mar 13, 2012 at 11:02 am

    Bring it on. Ky. must face head-on whatever damage has been done and take steps for the future to make things as right as possible.
    Shame, shame though, for so many.

  • 5 FreeManNKy // Mar 13, 2012 at 11:24 am

    Ok. Just read the part where she reported it. She basically couldn’t prove her suspicion?

  • 6 TP // Mar 13, 2012 at 11:41 am

    The stonewalling over documents is classic. I served on two “blue ribbon pension commissions” (one by Fletcher, one by Beshear) and was never allowed to see internal documents that would have raised these red flags years ago.

    Chris is “taking one for the team” by going on the KRS board and slugging it out with his board cohorts and management of KRS. He has nothing personal to gain except finally seeing this system become transparent and better run. It’s been clear for some time that no one external to the organization could have meaningful influence over it (including the legislature).

    As Jake might say, “it’s why Kentucky can’t have nice things.”

  • 7 schuyler olt // Mar 13, 2012 at 12:02 pm

    Interesting. Chris Tobe was appointed by Governor Beshear to the Board of Trustees, and his term expires this month. Since he’s not an elected Trustee, the only way he comes off the Board is if he is not reappointed.

    How in blazes does a Governor’s appointee somehow become a “whistleblower”? After reading this carefully, I’m really trying to be broad-minded and see something new. I’m not seeing it.

  • 8 jake // Mar 13, 2012 at 12:16 pm

    Papaw doesn’t reappoint him, he looks like he’s stifling a critic/questioner.

    Reappoint him, looks like an appeaser.

    Catch 22?

  • 9 Ed Marksberry // Mar 13, 2012 at 12:16 pm

    I learned a new word from the report, “disintermediation”.
    The biggest problem I have, if my numbers are correct, is that they charged over 10% for fees. Isn’t that like saying, “hey, let me invest your money and you will lose 10% right away”!
    Correct me if I’m wrong.

  • 10 UKeye // Mar 13, 2012 at 4:40 pm

    What’s Chris Tobe’s personal gain outside of being shown that he was honest/right and they were wrong/complicit/corrupt?

    Besides, since he is a known whistleblower, no report will ever “vindicate” him in the eyes of the corrupt power elite, including the Crit’s crew. Now they are his enemies for life…

    And I’m skeptical that the feds would cover the auditor’s pat-a-cake game. These guys often know each other and look aside at the right moment. That’s why BOPTROTS are so rare. What, you don’t think that there is a dosen of those occuring right now, all “accidentally” overlooked?…

  • 11 jake // Mar 13, 2012 at 4:47 pm

    Playing devil’s advocate: ego, potential business in the future and the bit about being right.

    And don’t assume so quickly that the feds aren’t poking around. They are.

    Remember when I said they were poking around Robert Felner? The same people tell me the same thing in this situation. They’ve never, ever been incorrect about anything.

  • 12 UKeye // Mar 13, 2012 at 5:03 pm

    Jake, I’m actually glad you have such deep and trustworthy sources.

    As to Chris: who doesn’t have an ego and who wouldn’t want to have a good and honest reputation, even if it can potentially help future business… I’d give medals for this sort of whistleblowing, it’s so rare. And then I’d institute preferential treatment for these people.

  • 13 jake // Mar 13, 2012 at 6:16 pm

    Note that I never said ego was a bad thing. or that any of the things he stands to gain are bad. Just playing devil’s advocate.

    He and I are clearly on the same side of this issue.

  • 14 reality // Mar 13, 2012 at 9:06 pm

    Ha! Nothing to gain?!

    10% to 30% of the recoveries. Do I need to draw you a picture?

  • 15 Such is the Fate of Wild Poodles // Mar 14, 2012 at 5:47 am

    What really bad timing for Jerry Abramson. There’s not a public employee pension fund he doesn’t lust after to raid and pillage and it looks like somebody beat him to it. And now that the KRS report has been published, he won’t even be able to suck at the bones to get to the marrow. Oh, the humanity!

  • 16 Jim Carroll // Mar 14, 2012 at 8:42 am

    If the SEC finds wrongdoing and Chris receives a monetary award, so be it. The more important issue would be how the administration responds to SEC sanctions. If it would make KRS more transparent (KRS staff salary open-records request, Thomas Elliott refusing to post his biography along with all other trustees, inadequate meeting facilities that allow for little public participation), then so be it.