Ethics report tied to Beshear comes out today

[Omaha Steve]

http://www.kentucky.com/454/story/195569.html

By Ryan Alessi
[e-mail]

FRANKFORT --
Kentuckians today will get their first glimpse of a 12-year-old confidential ethics report that has emerged as a focal point in the governor's race.

The 90-page report could provide answers to the key question of what Steve Beshear, the Democratic candidate for governor, knew about an alleged conflict of interest his former law firm had during the liquidation of one of Kentucky's most prominent home-grown companies.

Revelations contained in the report investigating Beshear's former firm, Stites & Harbison, could strike at the heart of one of the themes of this year's governor's race: ethics.

Yesterday, Kentucky Republican Party Chairman Steve Robertson issued a statement criticizing Beshear for playing a role in "Kentucky's Enron."

Depositions from 1995 -- including those of Beshear and colleagues at Stites & Harbison --and other related documents have shown that Stites & Harbison provided advice to the Bank of Louisville about selling $15.5 million in securities owned by Kentucky Central Life Insurance Co. That 1993 sale occurred unbeknownst to the state official who took over the financially troubled insurance company and at the same time that Stites & Harbison was supposed to be helping save Kentucky Central.

The report could shed more light on the role played by Beshear, who at the time was one of the firm's lead attorneys, in assisting then-state Insurance Commissioner Don W. Stephens, who took over Kentucky Central.

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