Kentucky Retirement Systems has had controversy recently regarding its board following Gov. Matt Bevin's executive order removing Thomas K. Elliott as chairman.
At the May 19 board meeting, trustee Joseph Hardesty presided in place of Mr. 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 the May 19 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 May 19.
Mr. Elliott attended the meeting but did not participate, Mr. Thielen said.
In April, Mr. 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 May 17, Kentucky Assistant Attorney General Matt James concluded 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.
Mr. Thielen said in an earlier interview 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.
Responding to a request for comment on the May 19 board meeting, Amanda Stamper, another spokeswoman for Mr. Bevin, said in an e-mailed statement: “The governor issued a valid executive order removing Mr. Elliott 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 May 18, 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 the May 19 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.
While Mr. Lattis would replace Mr. Elliott as board trustee, a special vote is required for him to become board chairman.
In other news, Mr. Thielen disclosed May 19 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 May 19 to develop an RFP for an executive search firm to assist in a replacement search, he said. n
