Citizens for Government Accountability

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Citizens For Government Accountability



CFGA is a non-profit organization that fights for accountability in Union County, Kentucky and surrounding counties. CFGA formed in the spring of 2006 around in response to public policy issues such as the county jail and occupational taxes, and how local taxpayer money is spent on a variety of public buildings. CFGA obtains its information through interviews, formal open records requests, and attention to detail. [1] The organization publishes a regular newsletter featuring the latest information about issues concerning Union County.

Personnel

  • Executive Director - J.C. McElroy

Contact

  • cfgagov@yahoo.com

June 2009 Newsletter

County taxpayers now paying utility bills at John Arnold Arena

In an Advocate article titled “What is Union County First?” (4-22-09), Judge Jenkins was quoted as saying of the convention center/Arnold arena, “So far, it has always been self-funding in operation.” However, our records request to the judge a week later found that the fiscal court had already been funding the utility bill at the arena for some time, allocating $16,080.22. Our records request to the fair board revealed an annual utility bill that averages $1,200 to $1,400 per month. It is not self-funding when the fiscal court/taxpayers are paying the utility bill! U/C FIRST: Our records request to Union County First provided the following: funding from fiscal court $85,000/yr.; salary of Director of Community Development Kim Humphrey $58,000; salary of Tourism Dir. Paul Monsour $39,714; office manager $22,048. A week after receiving their response articles ran in both local papers highlighting their efforts in the county to increase quality of life concerning, walking paths, bike trails, etc., in order to attract tourist. We suggest cleaning up the county drug problem before inviting in tourist. N.W. KY. FORWARD: Union County currently pays $26,600/yr. to North West Ky. Forward, economic development for our area. They purchased several hundred acres of land on the edge of Sebree, Kentucky earlier in the decade for an industrial park. We already have a 300 acre industrial park outside Morganfield that we can’t fill or keep employers in. With economic development issues of the county now in the hands of a multi-county organization, and U/C First handling community development, what does the judge-executive do? Fiscal court only meets twice a month. Hopefully they are working to help Sturgis with its water and sewer issues, and maybe they could help with the needs of the Sturgis Rest Home. (ref. to Scott Omer’s letter in advocate after ice storm) Shouldn’t these be bigger priorities for quality of life than paying the utility bill at the John Arnold Arena?

Wall Street Buys Another President

If you thought Wall Street investment banking and commodity firms were going broke, think again. In the 2008 election for president, Wall Street gave the largest financial contributions in history. With Obama out raising his democrat and republican opponents in funding from Wall Street by nearly a 2 to 1 margin. Wall Street banking and commodity firms gave $152million, 57% to dem.’s ($45mil. directly to Obama). Lobbyists gave $95.8mil. ($74.5mil to Obama & democrats), lawyers (whether with Wall Street firms or other) gave $232mil.(76% to Obama/dems) Others (large banks not on Wall Street) $168.2 million ($110mil. to Obama & dem.’s).[2]

Wall Street is about return on investment. They gave half a billion dollars in campaign donations and got bailed out at a trillion dollars and counting. Unlike the auto industry, they get to keep their million dollar jobs and bonuses. Now that was a good investment, for them.

Clintonized

The Obama administration wants to blame everything on Bush. But to be fair and honest, the origins of this financial meltdown started under Bill Clinton. In 1993 Clinton signed the free trade agreement with Canada and Mexico that Wall Street and Corp. American wanted (NAFTA). It has sent 3 million good paying jobs to Mexico (source: public citizen.org/nafta facts). Between ’95 to 2000 the top 14 oil companies merged unregulated into 5 companies. In 1996 Clinton’s re-election campaign took money from the Chinese govt. in return he signed into law (1999) Normal Trade Relations with China, sending millions more jobs there. Also in ’99 congress passed/ Clinton signed the establishment of unregulated financial derivatives market (see C.D.S. section). This is one of the main culprits in Wall Street’s meltdown. The sellout of the American worker/consumer should be an impeachable offense, not Monica.

Bushwacked

In his 2000 campaign, George Bush vowed to ‘re-visit’ NAFTA and Chinese trade agreements. Once elected, he did. He visited Canada, Mexico, and China. But he continued the Clinton era trade policies, as well as the lack of govt. agency regulation of Wall Street, banks, and oil companies. A war in the mid-east is no excuse for domestic in-action. It is undeniable Bush handed off to Obama a ‘house fully engulfed in flames’. But Clinton left Bush a house soaked in gas with a lit fuse. If only the corp. owned news media had reported this lack of regulation and manipulation of the facts, we would not be in this mess.

Obama Factor; Wall Street and Media Darling

Regardless of the media hype, it didn’t take Obama long to show his true colors once he was sworn in as president; Wall Street Green. Yet another bailout of the haves with the have not’s money. All with the guidance of the people he said during the campaign he wouldn’t hire (lobbyists/insiders). As reported in the April 5, 2009 Evansville paper via the newswire, Obama’s top economic advisor, Larry Summers, was paid $5.2 mil. last year as manager of D.E. Shaw hedge funds, plus $2.7mil. for consulting fees to large investment banks. Obama’s top cabinet picks tax problems have been aptly reported in the media. This has led many former Obama supporters, such as Bill Black, the top S&L scandal regulator, to denounce Obama’s financial policies, stating “Obama’s financial policies are bad, lack integrity, and violate the rule of law (P.C.A. law-1991). If you put in honest people they will find the financial problems. But that would expose the government and Wall Street connection.”[3] With enough time/ taxpayer money, Wall Street will recover, and energy commodities will skyrocket with it, and the consumer will be fleeced again, because no one was held accountable, just bailed out.

Crisis Vs. Scandal

Ever notice that politicians and the corporate owned news media refer to all Wall Street and political wrongdoings as a crisis and not a scandal? Here’s why: in a crisis no one is really to blame. Everyone is expected to tighten their belt and tough it out. Convenient for the guilty. A scandal denotes wrongdoing. This calls for investigations and accountability (fines, jail, etc.) to make sure the culprits pay. Unconvenient for the politicians and their big corp. donors. Don’t be misled by the media mislabeling. If they can get us to believe political/financial misdoings are a ‘crisis’ and not a ‘scandal’, then we are less likely to demand accountability from our politicians.

Prelude To Financial Disaster - Credit Default Swap Markets

A C.D.S. is a derivative contract in which the buyer makes a series of payments to the seller, and then receives a payoff if the credit instrument (bond, mortgage, loan) goes into default. This can be caused by a company going into a restructuring, bankruptcy, or simply having its credit downgraded. The difference between insurance and the CDS market is; the CDS market is unregulated, and the seller of the CDS is not required to maintain cash reserves to payoff the buyers. This is where the govt./taxpayers have stepped in to bail them out. The buyer of a CDS doesn’t have to own the credit exposure, or even suffer a loss from a default event. With insurance, the insured is required to own something of value (a home,etc.). You don’t have to own any part of a company or its bonds to buy/sell against its success or failure. It is simply a bet that something might happen to a company. You can bet that without regulation or an end to the CDS markets, the recently bailed out Wall Street firms at the center of this mess are already working up CDS’s for the Obama administrations toxic asset program of bad mortgages partially caused by CDS’s in the first place.

No End to Enron

Most think of Enron as a corporate ghost whose stock and accounting scandal of the late 1990’s ended with federal prosecution in this decade, leaving all its employees without a job. This was only true for the average worker. As shown on a January 2009 segment of 60 minutes, Enron energy commodity traders were the most sought after by Wall Street commodity firms as soon as Enron collapsed. They had mastered a technique for driving up energy commodity prices by market manipulation. Since their employment infusion into the Wall Street firms, we have all seen and felt at the pump and elsewhere, just how good they are at price manipulation, with no regulation. With the current administration not holding Wall Street/banking accountable for this mess, the same as the previous administration, it is no wonder oil is still at $50/barrel in a global recession. Shouldn’t the president put an end to energy commodity trading for the greater good of the national economy. It has already helped destroy the economy. Does he need a better reason to end it?

Ole T.R. to the Rescue

Price gouging by big oil companies, manipulation and corruption on Wall Street and in Washington are nothing new to America. We went through all this 100 years ago. Then ole T.R. – Teddy Roosevelt became President. His use of the Sherman Anti-Trust Act broke up big oil, insurance companies, and other monopolies, and sent politicians in both parties to jail. He once said, “When they call the roll in the senate, the senators don’t know whether to answer present or guilty.” Hopefully, next election we can elect someone cut from his cloth, not from Wall Street’s. We as voters must first learn to vote for a candidate that raises the least from Wall Street, not the most.

Notable Quote

“I believe that banking institutions are more dangerous than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation then by deflation, the banks and all the corporations that will grow up around them will deprive the people of all their property until their children wake-up homeless on the continent their fathers conquered.” Thomas Jefferson - 1802

Think the ice storm broke the power companies profits? Think again.

Give credit to all the power company line workers, and those that came from other areas to help during the January ice storm. They all did a great job under adverse conditions. However, most are just happy to still have a job (Ky. Utilities), as many of their former co-workers have been ‘downsized’ over the past decade for greater corporate profits. While monthly fees to the customer, nearly non-existent back when K.U. was really K.U. are now aplenty and increasing. Don’t worry about the ice storm costs breaking the power companies piggy banks. All the major electric utilities in the area effected by the storm, Eon (K.U.&LG&E), Kenergy, and Vectren in Evansville, Indiana, are flush with net profits.

Kenergy

Already had asked for a rate hike (6% request, got 4%) prior to the ice storm. Kenergy had the largest area of damage, as it covers many miles of rural areas. In a March 2, 2009 Henderson Gleaner article, CEO Sandy Novick stated the ice storm cost $21.3 million, but said Kenergy (being a co-op) will receive 87% re-imbursement for ice storm damage repairs from federal and state government, leaving out of pocket cost at $2.8 million. Kenergy’s net profits for 2007 (most recent available on their website) shows a $16 million net profit pre-asset depreciation for accounting purposes, and $3.5 million net profit after depreciation (acct. purposes). Kenergy CEO Sandy Novick’s 2008 salary/compensation: $274,554.

E.on (K.U./LG&E)

In 1998 Kentucky Utilities sold to LG&E (obviously for the benefit of the CEO/top stock holders, not the customers). British owned PowerGen bought LG&E in 2000 (same reasoning). In 2002 the sale of PowerGen to German owned E.on was completed, making E.on the worlds largest investor (stock)owned utility company. E.on/K.U. had already asked the Kentucky Public Service Commission (PSC) for a rate increase and higher customer fees, pre-ice storm. (Isn’t it nice to be charged to be a customer when you don’t have a choice). A March 11, 2009 Louisville Courier-Journal article reported. E on’s net profits increased 9% in 2008 to $7.1 billion, up from $6.5 bil. In 2007. E.on executives expected profits to decrease in 2009 back to 2008 levels, (explains why they asked for a rate hike). E.on owns several power companies in Ky., K.U. & LG&E accounted for $986.9 million of the 2008 net profits. Chairman/ President/ CEO Victor Staffieri total compensation for 2007 (most recent full year available to us) was $3,728,861. (compensation for kenergy, k.u./lg&e(eon), ceo’s received via records request of ky. psc)

Vectren

Evansville, Indiana based Vectren’s 2008 financial report released 2-18-09 showed all of its corp. divisions earning net profits. It’s electric utility division earned $111.1 million in net-profits, compared to $106.5 mil./2007. It estimated ice storm damage at between $15 to $20 million. 2008 salary/compensation for its CEO Neil Ellerbrook $744,713 salary, plus other compensation, total earnings $2,996,691. President/COO Carl Chapman $431,539 salary, plus other comp., total earnings $1,215,369. (received via request from vectren proxy)

Public Service Commission

Kentucky Public Service Commission is a 3 member board appointed by the governor (2 attorneys and 1 CPA). We were told they consider rate increases based on whether a utility has enough net profits ‘going forward’ to be stable, and a complex accounting method is used to make considerations. Seldom does a utility get the entire increase they ask for. We hope they also consider if the average person can afford the increases.

De-Monopolization

Wouldn’t it be nice to have strong regulation and de-monopolization of utility territories, thus providing the consumer a choice among electric utility providers. We asked the PSC this question. Their response was to try and compare it to de-regulation, which is not the same thing. Their further response was similar to the utility companies, and that of AT&T in the 1980’s when the govt. was about to de-monopolize them. (i.e. no one would have service, companies wouldn’t share lines, etc. That’s where the strong regulation comes in.) No company wants to operate in a regulated open market when they can have a territory monopoly to protect profits. Not happy with your utility bill or the new increases? Call your state legislator at 1-800-372-7181, as they control the PSC via statute.

If you want change at local government you have to know how to vote for it

With an irate public over Judge-Executive Jenkins lavish taxpayer funded trips to the Czech-Republic in 2007 and to New York City in 2008, and his continued appointments of family members; most recently his cousin Trey Peak to fill his father’s county clerk position ( January 2009 newsletter) there should be plenty of people interested in running for the offices of judge-executive and county clerk in 2010. Potential candidates and voters be ware of the political game: It is simple political strategy 101 for the political ‘power brokers’ behind the incumbents to want to keep them in office for their benefit. When they realize citizens are fed up and want change, then someone will always seek to unseat the incumbents. They always encourage as many to run as possible in the primary, even donating to some. They know that political statistics show the more people that run in a primary election always favors the incumbent. It simply splits the votes among the intelligent who want change, thus the incumbent wins the primary election. Whereas a one on one primary race pitting the incumbent against a viable candidate most often unseats the current office holder. We hope in the next primary election that the democrats seeking to unseat these incumbents will discuss amongst themselves who has the best chance of winning before throwing their hat in the ring, or has the sense for the common cause for change to withdraw and then support the candidate with the best chance to unseat the current office holder. Likewise, there is no disgrace in running as an independent or republican, to ensure an even better chance of change should the democratic primary not provide it.

STOP THE NEPOTISM! It was great to see a civic minded leader (Bob Henning) propose a pre-written anti-nepotism ordinance to Judge Jenkins and the magistrates. Hopefully, they will follow his leadership and adopt the ordinance. This would be a start to bringing some dignity back to the courthouse. Otherwise, there will be nothing from stopping the judge from appointing more family, or Trey Peak from hiring his wife once his mother retires if he is elected in 2010

Drug problem creates poor education and lack of good jobs in Union County

Everyone believes there is no place like home; and Union County is no exception. Community pride is a good thing to have. Yet many wonder why no company wants to locate a business here. Everyone knows that parents here don’t want their kids educated in the county’s public school system. Potential employers can easily access the county’s education statistics which ranks us in the bottom 8% of the state (u/c school system website), as well as the fact that Union County has one of the highest per capita substance abuse rates in the state (state census reports). Not good statistics for attracting new businesses.


Having students studying for the questions on the state mandated CATS test should increase test scores, but this only teaches them how to take that test, it does not educate them. It is unfortunate that children are getting hooked on drugs at an earlier age seemingly on a yearly basis. This is not just a Union County problem. However, what does it say for your county when even the assistant county attorney was married to a federally convicted drug dealer, before, during his incarceration, and for a brief period after his release.


Union County Asst. County Attorney, Julie A. Wallace, was married to Mike Herron, son of long-time state politician Paul ‘Pie’ Herron. Mike has several arrests over the past decades involving drugs, but never a full conviction and sentencing until the fed’s got involved. Mike’s incarceration in federal prison was from 7-31-03 to 8-30-06, for being caught trafficking drugs in a multi-year drug investigation. He was arrested in Febuary 2002, then bonded out the next day until his sentencing on July 7, 2003 (source: bop/doj/federal bureau of prisons, & u.s. marshals service). Assistant County Attorney Julie Wallace’s marriage to Mike Herron was from January 11, 2002 to September 1, 2006 (source: civil action # 06-CI-00207). Ms. Wallace was appointed Union County’s first ever, and current assistant county attorney by County Attorney Brucie Moore.


We are not making accusations against Ms. Wallace, just these facts of record. However, it should be of concern to all that our county attorney’s office would have an employee, especially an attorney, married to a convicted drug dealer. Some may think we are just ‘airing’ their dirty laundry, and this should be kept ‘under the rug’. However, when it concerns a county (taxpayer funded) office, it is all of our dirty laundry, and every citizen has a right to know the details.


If we continue with the current trend of substance abuse by adults and our youth with limited accountability, and a double standard for those in elected/appointed office, then our education system and job creation will continue to decline. Changes can not be asked for, they must be demanded from those in office. If we don’t stand up and demand changes for our county, then what kind of role models are we for the children of this community. In order to attract good paying jobs and create a better learning environment in our schools we must first make changes in the way this county is run. Simply hiring a few new people who answer to the same ole faces will only get us more of the same. Albert Einstein said it best, “You can not solve a problem with the same mentality that created the problem to begin with.”


In Closing

Thanks to all who have asked to receive our bi-annual newsletter via email. Current and past newsletters can be viewed at FreedomKentucky.org then click on our highlighted group name Citizens for Government Accountability to open our webpage. Donations can be sent to our organization at: C.F.G.A., Inc. P.O. Box 4 , Morganfield, Ky. 42437. Thanks to those that have contributed.


CFGA Newsletter Archives


See Also

References

  1. Citizens For Government Accountability Website
  2. Center for Responsive Politics
  3. [1]