by Tom Loftus, @TomLoftus_CJ –
FRANKFORT, Ky. – Franklin Circuit Judge Phillip Shepherd on Monday temporarily restored Thomas Elliott as a member of the Kentucky Retirement Systems Board of Trustees and scolded the Bevin administration for using “lawless, strong arm tactics” to block Elliott from participating in a board meeting in May.
But in the same 20-page order, Shepherd allowed to stand – again, temporarily – sweeping changes including new transparency requirements that Bevin ordered for the Kentucky Retirement Systems last spring.
Shepherd’s order came in a lawsuit filed by Elliott and another board member, Mary Helen Peter, claiming that Bevin did not have the legal authority to remove Elliott from the board by executive order last April. The suit also challenged a second Bevin order that added four additional members to the board and established new policies for the pension systems.
Elliott, Peter, and Attorney General Andy Beshear, who joined the case on their side, had asked Shepherd to rollback the effect of all these Bevin orders while the case was pending.
Shepherd’s Monday order granted only the request to restore Elliott to the board for now. The order allows the important other parts of Bevin’s orders to stand including Bevin’s adding of four members with investment experience to the board, new transparency requirements for reporting and disclosing financial information, the transfer of the authority to pick the board chair and vice chair to the governor, and the moving of employees of the the retirement systems into state government’s Personnel Cabinet and Merit system.
Bevin’s office released a statement saying it was pleased Shepherd let stand reforms “critical to turning around the nation’s worst-funded pension plan.” And the statement said the Governor’s office is confident that the appeals court will “reaffirm that Mr. Elliott is not a member” of the board.
Beshear issued a statement that said his goal is to quickly move the case to a final decision and “ultimately to the Supreme Court of Kentucky.”
In April, Bevin ordered Elliott removed from the board. But Elliott, acting on the legal advice of the retirement systems’ staff, attended and participated in the board’s meeting the following day.
When Elliott showed up for the May meeting, he was confronted by “two armed and uniformed state troopers” and two members of the Governor’s staff who threatened him with arrest for disrupting a public meeting if he tried to participate, Shepherd said. Elliott did not participate.
Shepherd wrote that “The use of armed police officers to threaten Mr. Elliott with arrest was a flagrant abuse of executive power which is wholly unacceptable in a democratic society, where such issues must be decided not by force and threats of force, but by the rule of law.”
The judge called this a “legally baseless threat” which was another strong reason to temporarily restore Elliott to the board.
“Otherwise, the Governor would wrongfully gain legal and tactical benefit from these lawless, strong arm tactics,” the judge wrote.
But Shepherd went on to rule he could not find reason to stop other changes Bevin ordered at the retirement systems.
The judge said he agreed with Bevin’s description of the systems as being “in a state of financial crisis.” He said the four new members Bevin added to the board “are highly competent individuals with significant experience” badly needed on the board, and that Bevin had “every reason and right to require more open and transparent management” at the retirement systems.
The judge’s order comes just before the board’s investment committee scheduled meeting Tuesday and the full board meeting scheduled for Wednesday.