Official: Ethics Report At Issue In Campaign Will Be Released

FRANKFORT, Ky. (AP) - A report detailing an ethics investigation
of Democratic gubernatorial nominee Steve Beshear's former law firm
will be released to the public on Saturday, a state official said.
Franklin County Circuit Judge Thomas Wingate decided on Thursday
that the 1995 report regarding the firm's handling of the
dismantling of Kentucky Central Life Insurance Co. was protected by
attorney-client privilege. Wingate ruled the decision whether to
release the report lies with Julie McPeak, executive director of
the state Office of Insurance, and a spokeswoman said it would be
"We're planning to release the report at noon on Saturday,
which is consistent with the court's order and the memorandum we
filed last week in court," said Ronda Sloan, the spokeswoman.
Beshear is challenging Gov. Ernie Fletcher in the Nov. 6
election. Fletcher has recently used the confidential report as
campaign fodder against Beshear, who has said the report should be
Vicki Glass, a spokeswoman for Beshear, said he was pleased by
the court's decision and "looks forward to getting a copy at noon
on Saturday."
During a speech to a Rotary Club in Louisville, Fletcher urged
the audience to closely examine the report.
"I didn't know about it, you didn't know about it," the
governor said.
Beshear's former law firm, Stites & Harbison of Lexington, was
paid $21 million over 15 years for assisting in the liquidation of
Kentucky Central. The company owned citrus groves, hotels and
billions of dollars worth of life insurance policies but was
overtaken with financial woes and collapsed in the mid-1990s.
Kennedy Helm, chairman of Stites & Harbison, said the firm was
not contacted by the Cincinnati law firm that conducted the
investigation and had never seen a copy of the report until now.
Helm said the firm might have more to say after the release on
"We think that now that we're free to tell the whole story that
the report will be discredited," Helm said. "This is 14 years
old, it's about as relevant as who won the 1995 Super Bowl if you
ask me. It's a fatally flawed report."
Fletcher has claimed Beshear and his firm prospered from the
bankruptcy while hundreds of Kentuckians lost their jobs and
thousands lost their savings.
Stites & Harbison was the subject of an ethics investigation 12
years ago, which looked into whether Beshear's firm "violated any
duty" or rules of ethical conduct when it signed on to lead the
liquidation of the insurance company. The investigation, which had
not been publicly disclosed, was reported last month by the
Lexington Herald-Leader.
The Herald-Leader and The (Louisville) Courier-Journal asked
Wingate to order the release of the confidential report.
Wingate, however, said the report was a communication "created
strictly for the purpose of providing legal advice" to former
Kentucky Central liquidator Don W. Stephens, and the judge could
not order its release.
McPeak, in her capacity as head of the Office of Insurance, is
currently the liquidator and intends to release the document after
Stites & Harbison has had 48 hours to review it.
Associated Press writer Bruce Schreiner in Louisville
contributed to this report.

(Copyright 2007 by The Associated Press. All Rights Reserved.)

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