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State auditor: Kentucky ignored concerns about KentuckyWired project

Photo: Kentucky Governor's Office
Photo: Kentucky Governor's Office(WKYT)
Published: Dec. 16, 2019 at 12:38 PM EST
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State auditor Mike Harmon says lawmakers ignored repeated warnings about the KentuckyWired project.

The statewide broadband project led to Kentucky taxpayers having a $1.5 billion tab for the next 30 years.

Harmon's office released phase two of its exam on Monday.

“What we found in phase two was there were numerous changes made after the Commonwealth signed a contract with the main contractor for the project that ‘flipped the script’ to move the costs and risks from private investors and placed it almost entirely on taxpayers," said Harmon.

The state auditor said the agreement between the parties involved, including Kentucky and Australian-based Macquarie, placed all the risk on the commonwealth.

Auditor Harmon’s report details how the Commonwealth hired outside consultants during the time frame examined, with two main consultants (a law firm and an engineering firm) paid a total of $1.36 million over three fiscal years to provide guidance and expertise during the entire process.

Several consultants repeatedly shared their concerns, but Harmon says the Finance and Administration Cabinet ignored them.

“The biggest question we sought answers to, who was making the decisions on behalf of the Commonwealth that ultimately led to taxpayers being on the hook for $1.5 billion in costs for KentuckyWired,” Auditor Harmon said.

Harmon's office identified former Finance Cabinet Deputy Secretary and ex-KCNA Executive Director, Steve Rucker, as the lead Commonwealth representative on the project. Mr. Rucker passed away in 2016.

You can read the full letter for phase two of the exam below.