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Embattled leader of state counties group steps down


The embattled leader of the Kentucky Association of Counties resigned Friday in the wake of a financial scandal.

Bob Arnold faced pressure to resign from inside and outside the

organization, the Lexington Herald

Leader reported.

Deputy Director Denny Nunnelley has taken over day-today operations of the organization.

The Herald-Leader published a series of stories detailing $600,000 of spending by five of the organization’s executives. The newspaper found chargecard payments to two Louisville strips clubs and a Lexington escort service.

Arnold said he neither made nor approved the charges.

Other expenses included two $7,000 meals, hotel rooms costing more than $450 a night and gifts for officials and board members costing as much as $1,000.

Arnold declined to comment and referred questions to his attorney, Jack Smith of Louisville.

While Arnold will relinquish his duties immediately, he will continue to draw his $178,000 annual salary and retirement benefits into next year, when his contract ends, Smith said. The executive committee and Smith came to those terms late Thursday night, the attorney said.

“The way we interpreted the contract was that if the resignation was the request of the executive board, he would do so but be paid through June 30, 2010,” Smith said.

Arnold will give up his cell phone and the BMW SUV that the organization provided, Smith said.

Earlier this week, the executive board received the results of an investigation conducted by Lexington lawyer Brent Caldwell on the strip club and escort service charges.

Smith said the signature for the charge on Arnold’s card for the escort service, which bills under the name Calypso Enterprises, was scrawled and illegible. Arnold, who is blind, often scribbles his name on documents such as credit card receipts. But Smith said the signature on the escort service document raised suspicions because it “went straight across on the line.”

“I don’t think Bob did that,” Smith said. “The most important thing is that Bob said he didn’t do it. I believe him. I think members of the board believe him.”

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