Kentucky Retirement Systems board trustee Joseph Hardesty presided at Thursday's board meeting in place of Chairman Thomas K. Elliott, who was warned by officials in the governor's office and personnel cabinet he would be arrested if he participated.
Those officials and some Kentucky state troopers attended Thursday's meeting where they disclosed that Mr. Elliott would be arrested and charged with the misdemeanor offense of attempting to disrupt a meeting if he participated, said William A. Thielen, executive director of the $15 billion Frankfort-based retirement system, in a telephone interview Thursday.
Mr. Elliott attended the meeting but did not participate, Mr. Thielen said.
In April, Kentucky Gov. Matt Bevin issued executive orders removing Mr. Elliott from the board and appointing William F. Smith, a dermatologist in Madisonville, Ky., as his replacement.
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. Jessica Ditto, a spokeswoman for Mr. Bevin, cited a need for a “fresh start and more transparency” as the reason for his removal.
However, in an opinion issued earlier this week, Kentucky Assistant Attorney General Matt James concluded that the governor was wrong to remove Mr. Elliott before his term expired and that Mr. Smith was not qualified as his replacement.
The opinion, requested by Mr. Thielen, is non-binding.
Responding to a request for comment on Thursday's board meeting, Amanda Stamper, another spokeswoman for Mr. Bevin said in an e-mailed statement: “The governor issued a valid executive order removing Mr. Elliot from the KRS board. Mr. Elliott voluntarily elected not to participate in the board meeting this morning. We are ready to move forward with transparency and continue the work of fixing our $35 billion unfunded pension crisis.”
On Wednesday, Mr. Bevin issued another executive order appointing Mark Lattis, a certified public accountant from Louisville, Ky., to replace Mr. Smith, who had recently declined the position. Mr. Smith could not be reached for comment on his decision by press time. Mr. Lattis was not at Thursday's meeting, Mr. Thielen said.
Whether to request a declaratory judgment from the courts on the situation could be taken up at future special board meetings, Mr. Thielen said.
In other news, Mr. Thielen disclosed Thursday that he will retire, effective Sept. 1. Mr. Thielen had originally announced he would retire by the start of 2016 but decided to stay on after an unsuccessful replacement search.
“At this point in time, I think it's in my best interest and the (retirement system's) best interest for a fresh approach,” Mr. Thielen said.
The board agreed Thursday to develop an RFP for an executive search firm to assist in a replacement search, he said.