2017-07-26 / Front Page

State agency denies allegations in suit involving rental of judge’s office here

By SAM ADAMS


The state Administrative Office of the Courts (AOC) has asked for dismissal of a whistleblower lawsuit that alleges wrongdoing and mismanagement within the agency, including the leasing of office space in Letcher County from a limited liability corporation the suit says is owned by a son of Supreme Court Justice Samuel T. Wright III.

A review of records from the Kentucky Secretary of State shows that the LLC was dissolved by the Secretary of State in 2012 for failure to file its annual report. Wright’s son is not listed as a member. Justice Wright said the suit does not accuse him of any wrongdoing, but declined to comment further about the case, saying it could come before him in the state’s highest court.

Scott Brown, who was fired in July from his job as executive officer of Administrative Services for the AOC, filed the suit in June, claiming he was placed on unpaid administrative leave and told he was being fired for buying surplus AOC cars. Brown says he was fired not for buying the cars, but for reporting wrongdoing to the director of the AOC and for cooperating with the FBI on an investigation of HVAC repair payments. Brown’s department included departments of facilities, auditing and investigative services, court security, and other subdivisions. His duties included uncovering fraud and mismanagement within the agency.

Brown alleged improprieties in acquiring $3.1 million in unauthorized HVAC repairs and $2.2 million in repairs that were not preapproved, failure to write formal lease agreements for properties, awarding of noncompetitive business contracts to people who had personal relationships with managers, altering documents, and paying as much as $467,468.50 to lawyers acting as “guardian ad litem” in custody cases in one northern Kentucky county.

Brown further alleged that the court had for years paid $1,200 a month to one unnamed justice for travel reimbursement, when the payments actually were for rent of a condominium in Frankfort.

Part of the suit indirectly names former Letcher Circuit Judge Wright in the allegations as well. The suit says that in or about November 2015, the AOC Facilities Department, which was in Brown’s Administrative Services Division, was told to find office space in Letcher County for Wright.

“Upon information and belief, AOC published an advertisement and the only response to the advertisement was a home/ office building owned by the newly elected Kentucky Supreme Court Justice,” the lawsuit says. “Brown reported his concerns regarding renting space for the newly elected Kentucky Supreme Court justice to the AOC’s director’s office. Additionally, AOC’s operation manager reported the same concerns to AOC’s general counsel.”

The AOC had visited the Letcher County Health Department on November 9 without telling officials what the space was for. They found the entire third floor unfinished, but empty, and some empty space on the second floor, where the Letcher Commonwealth’s Attorney’s Office is located. It was not clear why the state did not lease space there.

The response from the AOC denies that Brown expressed concerns about the property owned by Wright’s son, and says it told Wright that it “could not and would not pay rent for office space owned by the justice.”

The lawsuit does not identify Wright by name. However, he was the only newly elected justice in November of 2015. Brown’s attorney, Thomas Clay of Louisville, confirmed to The Mountain Eagle that the suit is referring to Wright, and Wright also acknowledged in a phone call Tuesday that the suit was referring to him.

The suit goes on to say that “on or about November 16, 2016, (sic)” Brown and the operation manager received an email from the general counsel informing them of a meeting about the office space owned by Wright, saying, “‘He owns the building we want to rent in Letcher County and we need to make sure he follows the rules. He says he’s willing to sell to his dad, but we need to meet on this and make a recommendation.’”

A copy of the e-mail message obtained by The Mountain Eagle shows it was sent by AOC General Counsel Marc Theriault on November 16, 2015, not 2016 as written in the lawsuit. The e-mail, which was sent nine days before a public notice seeking space was first published in The Mountain Eagle and the Community News-Press, names Wright as the justice and says the situation is “very similar to one we had recently, in that he owns an office building that we wants (sic) to rent and we need to make sure he follows the rules.”

The lawsuit says Wright sold the office to SWP Properties LLC, which it says is owned by his son. The response from the AOC acknowledges a meeting was initiated by the director in November of 2015 to discuss the lease, and agrees that Justice Wright sold the property to SWP Properties LLC. It denies that it ever leased property in which the justice had an ownership interest, and the justice also denied any ownership in the property.

The state leased the property in April 2016, with the understanding that the owner would spend $110,388 on renovations. The AOC added additional improvements, including security cameras and a gate.

A check of records in the Secretary of State’s office shows SWP Properties LLC was dissolved by the Secretary of State in 2012. Records show the limited liability corporation was created by Seldom W. Price, who was Justice Wright’s aunt, and its members were Samuel T. Wright III and Tammie W. Bentley. Samuel T. Wright III is listed as the registered agent. Neither of Wright’s sons is mentioned in the filings.

The property on Book Drive, a former textbook store, was transferred from SWP to Coalfield Properties Development LLC on January 14. Coalfield lists the same physical address as SWP and as the building where the office is leased by the state. Coalfield is listed as 110-a Book Drive, while the office is listed as 110 Book Drive. The deed for the property does not list a value, but says it is being transferred “to an entity owned by the same individuals who own” SWP.

Justice Wright, reached at his office Tuesday, said he would like to comment about the lawsuit, but could not speak about any case that might come before him. Even though he is indirectly mentioned in the lawsuit, he said he has not been accused of any wrongdoing and the case could still come before him.

“I discussed it with the Chief Justice and he said I shouldn’t be discussing it with anyone,” Wright said.

Asked about the property itself rather than the lawsuit, Wright said he has no ownership interest in it.

“It belonged to my aunt and when she died, I was one of the heirs, but when it was divided, it went to my son,” Wright said. He said he was a “manager” in the company at one time, but knew nothing more about it.

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