FRANKFORT, Ky. (AP) - Kentucky’s chief financial officer wields broad authority that can include issuing subpoenas to people outside government when investigating possible mismanagement in the awarding of state contracts, the Kentucky Supreme Court ruled Thursday.
The ruling stems from a long-running dispute over whether an ex-state employee can be compelled to provide information as part of a contracting investigation by the state Finance and Administration secretary. The case stemmed from an investigation by former Republican Gov. Matt Bevin’s administration into contracts awarded when Bevin’s Democratic predecessor was in office.
Though Bevin and his finance secretary are no longer in office, the ruling by the state’s high court could have long-lasting implications for future investigations of state contracting.
The case delved into the breadth of the state finance secretary’s investigative powers under Kentucky law. The Supreme Court rejected arguments that the finance secretary’s subpoena powers don’t extend to investigations into potential violations of Kentucky’s Model Procurement Code.
“Suffice to say, our General Assembly saw fit to give the Finance and Administration Cabinet and its Secretary a great deal of authority over procurements made by the Commonwealth under the KMPC,” Justice Debra Hembree Lambert said in writing for the court.
“It follows, then, that the Secretary’s mandate to at all times protect the financial interests of the state, and his wide-reaching authority over procurements made by the state, would bring a possible violation of the KMPC well-within his authority to investigate,” she added.
The high court also rejected claims that the finance secretary can only issue subpoenas to current state government employees in such investigations.
Lambert wrote that “it defies common sense to say that the Secretary can only gather information from state employees and not from the non-government entities that might have been party to allegedly illegal contracts and therefore would almost certainly have valuable evidence in regard to that investigation.”
The court ruled in a case that revolved around an attempt by Bevin’s finance secretary to issue a subpoena to Frank Lassiter, who served in former Democratic Gov. Steve Beshear’s administration.
Bevin’s finance secretary, William M. Landrum III, was investigating technology-related contracts awarded when Bevin’s predecessor was in office. Lassiter fought the subpoena, claiming he could not be subpoenaed as a former employee. He prevailed in circuit court but lost in the Kentucky Court of Appeals, sending the case to the Supreme Court.
Lassiter’s attorney, J. Guthrie True, said in a statement Thursday that Lassiter “has always been willing to cooperate with a legitimate and fact-driven inquiry.”
The case was an outgrowth of a bitter feud pitting Bevin against Steve Beshear and his son, Andy Beshear, who defeated Bevin in last year’s gubernatorial election.
True said the high court’s ruling didn’t resolve other issues, which he said include “the over-breadth and oppressiveness of the subpoena and the political motives” of Bevin’s administration in issuing the subpoena. The Supreme Court said those issues could be addressed again in circuit court, he said.
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