HERALD-LEADER FRANKFORT BUREAU
FRANKFORT – Franklin Circuit Court ordered National College Wednesday to pay a $1,000-a-day fine from July 1 to the present for failing to respond to a subpoena from Attorney General Jack Conway in his investigation of some for-profit colleges.
As of Wednesday, that amounts to $126,000 in fines.
In addition to the penalty, the court ordered National’s attorneys to pay $10,000 to the attorney general’s office after the court determined that National College has “repeatedly abused the legal system to obstruct a valid investigation by the attorney general.”
National College had no immediate comment.
Conway said he hopes National College “will stop the games, turn over all of the documents requested and pay.
“If National has nothing to hide, the time is now to comply with the court order.”
The attorney general issued a subpoena to National College in December 2010.
National refused to respond to the subpoena and filed suit to block the attorney general’s investigation.
In March 2011, the Franklin Circuit Court ruled in Conway’s favor, finding that the subpoena was reasonable and supported by valid concerns under the Consumer Protection Act and that Conway was lawfully acting in the public interest.
National College appealed that decision to both the Court of Appeals and the Kentucky Supreme Court, but the appeals were denied.
In a separate action in September, 2011, Conway filed suit against National College in Fayette Circuit Court, alleging that National violated the Kentucky Consumer Protection Act by posting false job placement rates for National graduates on its website.
That litigation is pending.
By Jack Brammer
FRANKFORT — A judge decided Wednesday to hear requests on Nov. 18 to dismiss House Speaker Greg Stumbo and the state of Kentucky as defendants in a sexual harassment lawsuit filed by two legislative staffers against a former Western Kentucky lawmaker.
Franklin Circuit Judge Thomas Wingate was scheduled to hear a motion Wednesday from Attorney General Jack Conway’s office to dismiss the state as a defendant, but Wingate gave lawyers representing the two staffers until Nov. 18 to file written responses to Conway’s motion.
The motion to dismiss Stumbo from the lawsuit already had been set for a Nov. 18 hearing. Stumbo said he acted promptly when he heard about the harassment allegations by referring the matter to the Legislative Research Commission for investigation.
The lawsuit, filed Oct. 1 by Yolanda Costner and Cassaundra Cooper, named former state Democratic Rep. John Arnold of Sturgis, the state, the LRC and Stumbo as defendants.
The two women allege that state government failed to protect them after they complained in February that Arnold inappropriately touched them and made lewd and vulgar comments to them in numerous incidents over several years.
Arnold has asked the court to dismiss the lawsuit, saying the claims by the women are barred by statute of limitations. His motion is pending.
Arnold has denied the harassment allegations and has resigned from the state legislature.
Thomas Clay, an attorney for the women, has said there is no problem with the statute of limitations.
Assistant Attorney General Nicole Pang told Wingate Wednesday that the state should be dismissed as a defendant in the suit because the women have named both the LRC, an agency of the state, and the commonwealth as defendants.
Leslie Vose, a Lexington attorney for the LRC, said the LRC employed the women and that she did not object to the attorney’s general’s motion.
FRANKFORT — A special college scholarship program has been set up for Kentucky students whose lives have been impacted by prescription drug abuse, Attorney General Jack Conway announced Monday.
The program, which uses no state funds, will provide two $1,500 scholarships this school year to graduating high school students in Kentucky, Conway said at a news conference in his Capitol office.
He said he is reviewing the legality of whether a foundation can be set up to expand the program.
Funds for the launch of the program, Conway said, come from the National Association of Drug Diversion Investigators and parents of two young people who died of prescription drug abuse. The Prosecutors Advisory Council also has worked with Conway on the program.
The scholarships are in memory of Sarah Shay of Morehead, who died of a prescription drug overdose in 2006 at age 19, and Michael Donta of Ashland, who died of prescription painkiller abuse in 2010 at age 24.
FRANKFORT — The speaking order for politicians at this weekend’s 133rd annual Fancy Farm picnic has been set.
The political speaking will begin at 2 p.m. CDT Saturday on the grounds of St. Jerome Catholic Church in Graves County.
Mark Wilson, political organizer for the church picnic, said Monday that the no-shows are Gov. Steve Beshear, Lt. Gov. Jerry Abramson, U.S. Sen. Rand Paul and state treasurer Todd Hollenbach.
The political speaking, to be emceed by “Comment on Kentucky” host Ferrell Wellman, will begin at 2 p.m. CDT with five minutes of comments each by state Sen. Stan Humphries, R-Cadiz, and state Rep. Richard Heath, R-Mayfiled.
U.S. Sen. Mitch McConnell, R-Louisville, then will get six minutes.
Following McConnell also with six minutes will be U.S. Rep. Ed Whitfield, R-Hopkinsville.
Each of the attending state constitutional officers will get six minutes. In order of speaking, they will be Secretary of State Alison Lundergan Grimes, Attorney General Jack Conway, Auditor Adam Edelen and Agriculture Commissioner James Comer. Comer is a Republican; the others are Democrats.
Matt Bevin of Louisville, a Republican candidate for the U.S. Senate next year, will get five minutes. So will Ed Marksberry of Owensboro, a Democratic candidate for governor in 2015. They will flip a coin to see who goes first.
By Jack Brammer
FRANKFORT — Former Kentucky Democratic Party Chairman Bill Garmer said Friday he is considering running for the U.S. Senate next year if Secretary of State Alison Lundergan Grimes declines to enter the race against Republican incumbent Mitch McConnell.
“A lot of people have talked to me about the race,” said Garmer, a Lexington lawyer, in a telephone interview. “But Alison is the center of discussion. In my mind, if she wants the nomination, she has my support. She is one of the bright stars in the Democratic party and she wants to serve Kentucky. I would be the first in line to support her.”
Asked if he would consider running if Grimes decides not to run, Garmer said, “that sounds like a lawyer’s question but that would be fair.”
Grimes said April 23 that she is pondering whether to run for the U.S. Senate next year against McConnell. She said she would “take the time to reflect with my family, my supporters on how I can best continue to serve the Commonwealth of Kentucky.”
FRANKFORT — Longtime Owsley County Clerk Sid Gabbard must resign and repay the state more than $61,000 after entering an Alford plea Friday to charges of tax evasion and abusing the public trust.
Gabbard, who has first elected clerk in 1985, will not serve any jail time as a condition of his plea, state officials said Monday. He entered the plea in Franklin Circuit Court to three counts of abuse of public trust and three counts of willfully filing false tax returns or failing to pay taxes.
In an Alford plea, a defendant does not admit guilt but acknowledges that there is enough evidence to be found guilty.
Attorney General Jack Conway’s office opened an investigation into Gabbard’s bookkeeping after a 2010 review by state auditors showed repeated problems in the office. The attorney general’s investigation revealed that Gabbard withheld state income tax from employees’ checks but didn’t forward it to the state.
“The citizens of Owsley County elected Sid Gabbard to represent them with honesty and integrity,” Conway said. “Mr. Gabbard betrayed that public trust. He treated public funds as his own at a time when communities across the commonwealth have struggled to fund vital programs and protect services.”
Gabbard must resign after his June 14 sentencing date, but he may step down sooner, said Wade Rasner, Gabbard’s attorney.
By Beth Musgrave
FRANKFORT — Attorney General Jack Conway is betting Connecticut Attorney General George Jepsen that the Lady Cardinals will best the the University of Connecticut during Tuesday night’s NCAA women’s championship game.
Michigan Attorney General Bill Schuette already owes Conway a basket of gourmet Michigan goodies after the University of Louisville men’s team defeated Michigan in Monday night’s NCAA championship game. If the Lady Cards lose to the Connecticut Huskies, Conway will owe Jepsen a Kentucky ham. Jespen bet Conway a selection of Connecticut wines.
Conway was already preparing Tuesday for his selection of wines. Conway’s wife, Elizabeth, is a University of Louisville graduate.
By Jack Brammer
FRANKFORT – U.S. Sen. Mitch McConnell’s re-election campaign released its first video ad Tuesday, a parody highlighting the difficulty Democrats are having trying to recruit a viable candidate to run against him.
The video is on the newly-launched website www.obamaskentuckycandidate.com. The Republican campaign says it plans to use the website to track Democrats’ recruiting process.
The nearly three-minute video features clips of Democratic President Barack Obama that have been edited to make it appear he is searching for a candidate to run against McConnell.
Prospects identified include actress Ashley Judd, Secretary of State Alison Lundergan Grimes, former U.S. ambassador to Sweden Matthew Barzun and Ed Marksberry of Owensboro, who already has said he will run. The video also features clips of Gov. Steve Beshear, Attorney General Jack Conway, former Auditor Crit Luallen, Auditor Adam Edelen, U.S. Rep. John Yarmuth of Louisville, and Lt. Gov. Jerry Abramson, all of whom have said they’re not interested in challenging McConnell.
“We all know President Obama and his liberal allies have made Senator McConnell their number one target,” Jesse Benton, McConnell’s campaign manager, said in a statement. “We thought we would have a little fun with the problems they’ve had finding someone to carry President Obama’s banner in Kentucky.”
The YouTube video was released to McConnell supporters in an email Tuesday morning and posted on Team Mitch’s Facebook and Twitter pages.
Kentucky Democratic Party Chairman Daniel Logsdon said the video shows that McConnell doesn’t want to talk about his long voting record in Washington.
“The only thing he can do is make fun of serious people who are trying to help Kentuckians,” Logsdon said. “He can’t point to any accomplishments.”
Logsdon said the Democratic Party “will have a strong challenger for him in 2014.”
Asked who that might be, he said “that process is in the works.”
House Speaker Greg Stumbo, D-Prestonsburg, said Tuesday that Judd should contact Gov. Steve Beshear about the race.
“When we discussed this with the governor last week, he indicated that he’s not had that contact yet,” Stumbo said.
He said he hoped Judd would also talk to other Democratic leaders in Kentucky.
“I think there are some things that we could suggest to her that may help her as she formulated her campaign,” Stumbo said.
Meanwhile, Nicholasville Tea Party activist David Adams said Louisville businessman Matt Bevin is looking at the Republican primary for U.S. Senate as a Tea Party candidate.
Adams said the Tea Party in the state “may have multiple candidates to run against McConnell.”
Bevin said in a statement that he has made no final decision about the race. He said he has met with “various individuals and groups who have expressed their frustration with their current representation in Washington and have encouraged him to consider entering the race.”
By Jack Brammer
FRANKFORT — A Virginia company created by the mortgage industry violated Kentucky’s Consumer Protection Act by failing to disclose when mortgages were sold or transferred from one bank to another, Attorney General Jack Conway claimed in a lawsuit filed Wednesday in Franklin Circuit Court.
The 36-page suit alleges that MERSCORP Holdings Inc. and its wholly owned subsidiary, Mortgage Electronic Registration Systems Inc., both in Reston, Va., were required to record mortgage assignments in the appropriate county clerk’s office, which collects a $12 fee for each mortgage recorded.
Many banks and mortgage lenders sell outstanding loans to free up money for new loans. They use a mortgage assignment to legally grant the loan obligation to the new mortgage holder.
Conway, in a news conference in his Capitol office, said state law is clear that mortgage assignments must be recorded with county clerks.
By Beth Musgrave — email@example.com
FRANKFORT — Kentucky Attorney General Jack Conway filed a lawsuit Wednesday against Spencerian College, alleging that the for-profit college deceived students by misrepresenting its job placement numbers.
“In short, we don’t think Spencerian was telling the truth,” Conway said at a Frankfort news conference. “It provided students with information that it knew was false in the hopes of luring them into student loan arrangements and to join their for-profit institution.”
The consumer-protection lawsuit, filed in Jefferson Circuit Court, comes after a two-year investigation into the business practices of for-profit colleges. It’s the fourth time Conway has attempted to take legal action against the for-profit college industry.
Spencerian College has campuses in Lexington and Louisville and is a subsidiary of Sullivan University. A lawyer for the university system said Wednesday that it plans to vigorously defend itself.