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Beshear's Communications Director May Have Conflict

FRANKFORT, Ky. (AP) - Gov.-elect Steve Beshear's communications
director may have a conflict of interest because his public relations firm represents organizations that have ties to state government.

Phil Osborne agreed to step down temporarily as chief executive
officer of the Lexington-based marketing and research firm
Preston-Osborne to take the post with Beshear.

But Osborne said in an interview Tuesday that, even though he
will give up his salary from Preston-Osborne, he will retain his
ownership of the firm and intends to return to his previous
position after at least six months in state government.

Meanwhile on Wednesday, Beshear appointed four more key
advisers: Helen Mountjoy of Owensboro as education secretary, J.
Michael Brown of Louisville as justice secretary, Air National
Guard Gen. Edward W. Tonini of Louisville as adjutant general of
the Kentucky National Guard and Rodney Brewer of Ballardsville as
Kentucky State Police commissioner.

Preston-Osborne works for at least 36 clients, some of which are
regulated by, receive funding from or seek contracts with state
government.

The firm also works for the Kentucky Equine Education Project, a
coalition of horse owners and breeders that, among other causes,
supports casino gambling - an issue poised to be the most
hot-button political debate in 2008.

The firm also represents Taylor Manor Nursing Home, East
Kentucky Power and Big Rivers Electric Cooperative, all of which
are regulated by state agencies; the University of Kentucky College
of Medicine and UK Healthcare, and a state road contractor.

Ellen Hesen, Beshear's incoming general counsel, will submit a
formal request for an opinion to the state ethics commission before
its next meeting scheduled for Dec. 14 - three days after Beshear
is inaugurated, said Vicki Glass, Beshear's spokeswoman.

Osborne said his move to state government will depend on what
the commission decides.

"If they say it is a problem, we have a choice to make. If not,
it's business as usual," he said.

And if it comes down to choosing, Osborne said he would likely
return to his firm, which will be run by Ellen Gregory in his
absence.

"My first loyalty is to the company," Osborne said. "As much
as I like Steve and I want to help him, I need to do what's best
for the company."

Osborne, whose state salary hasn't been set yet, said he agreed
with Beshear to re-evaluate every six months whether his services
in the administration are needed.


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