Beshear not directly responsible for Kentucky Central conflict

FRANKFORT, Ky. (AP) - Democratic gubernatorial nominee Steve
Beshear's former law firm should have withdrawn more than a decade ago as legal counsel on a mammoth corporate bankruptcy case to avoid a conflict of interest, independent attorneys wrote in a confidential report released Saturday.

The report said Beshear was at least generally aware of a potential conflict of interest and that his former firm, Stites & Harbison, violated three Kentucky Supreme Court ethics rules. But, Beshear was not directly involved in the conflict, according to the 90-page report, which was prepared 12 years ago but kept under wraps until its was sought by two major newspapers.

The report, which looked into Stites & Harbison's work in the bankruptcy of Kentucky Central Life Insurance Co., had become political fodder in the race between Beshear and incumbent Gov. Ernie Fletcher.

The Cincinnati law firm of Porter, Wright, Morris & Arthur, which compiled the report, concluded that neither Beshear nor any other Stites & Harbison attorney working on the Kentucky Central case were involved in or responsible for the conflict of interest.

"The report ... confirms what I have said all along, that I have conducted myself in an ethical manner," Beshear said Saturday afternoon.

Stites & Harbison released a statement Saturday saying the report shows there was no basis for allegations of unethical conduct on Beshear's part and that interest in the report has been driven exclusively because of his campaign for governor.

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