Forgy alleges conspiracy, Beshear says claim outlandish

LEXINGTON, KY -- Three-time GOP gubernatorial candidate and long-time Republican party operative Larry Forgy has alleged a conspiracy involving Steve Beshear and others to keep from the public the ethics report on the handling of the bankruptcy of Kentucky Central Life.

Forgy says the conspiracy violated federal law and that he plans to report it to authorities. Forgy also says had the report been made public early on, Kentucky Central Life, which went bankrupt in the early 90s, might have been saved.

Forgy accuses Stites Harbison, Beshear's former law firm, Beshear himself, former Kentucky Insurance Commissioner Don Stephens and retired Franklin Circuit Judge William Graham in the conspiracy. Stites Harbison was hired by the state to oversee the dissolution of Kentucky Central Life after it went bankrupt.

Forgy is an adviser to Governor Ernie Fletcher. Steve Beshear is Fletcher's Democratic opponent.

When told of Forgy's accusation that he, Beshear, Stites Harbison, Stephens and Judge Graham conspired to keep the report from going public, Beshear said, "I think Larry has gone off his medications."

Judge Graham, in an interview with WKYT-TV said he has tremendous respect for Steve Beshear and the "liquidation of Kentucky Central Life was one of the most successful liquidations in the history of this kind of law." Stephens dismissed the accusation as politically motivated saying, "I want to remind everyone that this is an election year." Stites Harbison issued a statement today saying the report exonerates it in the handling of the matter.

Beshear also stated the judge who reviewed the ethics report concluded that he had done "absolutely nothing wrong or nothing unethical." Graham, who served on the bench for 30 years, told the television station that the Forgy charge "is one of the most outrageous accusations I think I have ever heard."

Beshear also takes issue with conclusions in the report itself, released Saturday, that the actions of Beshear's former law firm were detrimental to saving Kentucky Central Life and that Beshear failed to disclose key information to the state official overseeing the process.

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