Kentucky Assistant Attorney General Matt James issued an opinion against the governor's removal of Thomas K. Elliott, Kentucky Retirement Systems' board chairman, and the appointment of William F. Smith as his replacement.
In Tuesday's opinion, Mr. James concluded the governor “may not remove a Kentucky Retirement Systems trustee at will prior to the expiration of the trustee's appointed term.”
The attorney general office's opinion, requested by William A. Thielen, executive director of the $15 billion Frankfort-based pension fund, is non-binding.
The KRS board meets again Thursday. Mr. Elliott remains on the board and will continue to preside as chairman until his successor is elected, Mr. Thielen said Wednesday.
Mr. Thielen added that he believes the board is entitled and obligated to rely on the assistant attorney general's opinion absent a contrary opinion from the courts. The opinion of a state attorney general's office is given “great weight and respect” throughout the country and “state officials are expected if not obligated to follow that legal guidance,” Mr. Thielen said.
In April, Kentucky Gov. Matt Bevin issued executive orders removing Mr. Elliott from the board and appointing Mr. Smith as his replacement. Jessica Ditto, a spokeswoman for Mr. Bevin, cited a need for a “fresh start and more transparency.”
Mr. Elliott, a senior vice president at Old National Bank, Louisville, was first appointed to the board in 2011 and reappointed last year by then-Gov. Steve Beshear for a term that expires March 31, 2019. Mr. Smith is a dermatologist in Madisonville, Ky., with an educational background in mathematical and actuarial principles, according to Mr. Bevin.
Mr. James also concluded that while Mr. Smith “appears to have some experience with pension systems,” he does not appear to have the minimum 10 years of financial experience required under state law to fill Mr. Elliott's seat, which disqualifies him for the position.
Amanda Stamper, another spokeswoman for Mr. Bevin said in an e-mailed statement Wednesday: “It is unfortunate that Attorney General (Andy) Beshear is willing to cast aside the importance of transparency and accountability measures in favor of political expediency. Furthermore, in this non-binding advisory opinion, Attorney General Beshear condemns a practice utilized by previous governors, including former Gov. Steve Beshear.” Steve Beshear is Andy Beshear's father.
Ms. Stamper maintained that Mr. Smith is qualified to serve as a KRS trustee.
“We also disagree with the portion of the opinion concluding that Dr. William Smith is not qualified to sit on the KRS board. Attorney general opinions are limited to questions of law, not fact. This opinion ventures into making fact determinations even though reasonable people may have differing interpretations of the same facts. We continue to believe that Dr. Smith is qualified to serve on the KRS board.”
While Mr. Smith would replace Mr. Elliott as board trustee, a special vote is required for him to become board chairman.