Taxpayers are footing at least some of the bill for lawyers who are defending former Whitley County Sheriff Lawrence Hodge against 21 felony charges of public corruption.
According to documents obtained by the News Journal, the Kentucky Association of Counties (KACO) has agreed to provide legal defense for Hodge who is accused of bilking the county for about $350,000 and failing to handle evidence in criminal cases properly, including charges that he sold seized firearms for his own gain.
The decision to pay for Hodge’s legal representation was made last November. KACO is a non-profit organization that provides a range of services and lobbying power to all of Kentucky’s 120 counties.
Whitley County is one of 112 Kentucky counties that pays premiums to KACO’s "All Lines Fund" – an insurance pool that covers participating counties for things like civil liability claims. Lesser known is the fact that the All Lines Fund also provides public officials accused of crimes with a lawyer to defend them of those crimes as well.
"It’s part of the policy that nearly all the counties in Kentucky have. Whitley County has participated in it for years," said Whitley County Judge-Executive Pat White Jr. Tuesday.
Money for All Lines Fund coverage is paid from the county’s General Fund, White said. He did not know how much the county paid to KACO annually for the coverage and a review of the county’s latest budget does not show a specific line item for the premium. Whitley County Treasurer Jeff Gray said it would take some time to determine the amount paid and that the figure could not be determined by press time Tuesday. He added that premiums paid by the county for the insurance should not raise in the very near future since they are locked in for a five-year period.
White said that, contractually, many of the county’s elected officials qualify for legal services from KACO if they are accused of a crime, and defended the policy as prudent.
"In our system, there’s a presumption there that you are innocent until proven guilty," White said. "These things happened while he was performing the duties of his elected office."
But Jim Waters, Vice President of Policy and Communications for the Bluegrass Institute for Public Policy Solutions, a free-market think tank and government watchdog organization based in Bowling Green, criticizes the move as unfair to taxpayers.
"People in the private sector have to pay for their own defense if they are accused of a crime. Why should this be any different?," Waters said. "He should not be able to use tax dollars to hire a high-powered attorney and get the best at taxpayer expense."
He added that most people privately employed don’t earn as much as a Kentucky Sheriff. Hodge’s salary his last year in office was $86,977.
White said coverage for legal expenses for criminal defense through KACO is capped at $100,000. According to a document obtained from the KACO Claims Service Unit, London attorney Jason Williams has been retained to defend Hodge.
During his last court appearance, Hodge was also represented by London attorneys Gary Crabtree and Tom Jenson.
The county just recently tapped KACO’s All Lines Fund for help defending against a police brutality lawsuit that resulted in a $6.2 million judgment. Post verdict negotiations between the county and attorneys for the plaintiff in the case resulted in a settlement for less, but officials won’t release the final cost. White said KACO helped pay for the cost of legal representation for the county in that case, but would not divulge how much was paid to the county’s attorney.
"I’m under federal court order on that so I am not at liberty to give any details."
KACO is almost entirely funded through dues and premiums paid to it by Kentucky’s county governments. Individual insurance funds, like the All Lines Fund, are administered by KACO employees and overseen by separate boards made up of elected officials.
Fourteen years ago, the All Lines Fund nearly collapsed under the weight of a $10 million deficit. It was forced to borrow money and assess counties an extra $5 million to become solvent again.
According to minutes from the last KACO Board of Directors Meeting, held Sept. 29, 2010, the All Lines Fund received over $23 million in premium from counties and processed about 300 claims from counties in July and August of last year totaling $2,459,619. The Board of Directors for the All Lines Fund is set to meet today.
KACO was harshly criticized by Kentucky State Auditor Crit Luallen last year following a series of articles by the Lexington Herald-Leader that chronicled wasteful and questionable spending by KACO staff. Luallen specifically blasted criminal defense coverage from the All Lines Fund as a misuse of taxpayer dollars.
Waters contends KACO is a "corrupt, wasteful and unnecessary organization," and that counties could find better options for their needs if they wanted.
"The insurance the counties need they can get in the private sector. We don’t have to have a KACO," Waters said.
He added that the insurance could also be modified to drop criminal defense expense coverage or to have a loser-pays type system if a public official is convicted.
White said the liability insurance purchased through KACO couldn’t be acquired piecemeal, as far as he was aware.
"I’ve never heard of anybody negotiating it that way," White said.
