Quid Pro Quo, Governor Bevin?

Quid pro quo – Latin, meaning “this for that.” Also known as “you scratch my back, and I’ll scratch yours.” Also known as “pay to play.”

So here’s the question: Is Governor Bevin engaging in one or more quid pro quos?

Let’s get a few things clear, right up front:

• I really do not care where the Governor and his family live. He has a large family, and he has enough money to provide for them. If they need a bigger house to live in, and he can find one and buy it, good for him and good for them.
• I am not actually accusing anyone, including Governor Bevin, of engaging in pay-to-play. Everything that is detailed below could be completely innocent and above-board.
• What I AM saying is that some of these optics are terrible, and they are exacerbated by the refusal of almost everyone involved to be transparent about these details, OR to even care that it LOOKS like pay-to-play. In other words, Governor and others, if you do things that LOOK like quid pro quo, AND you refuse to answer questions about them, then you’re going to get articles like this one and questions like these, until you either change the situation or answer the questions.

Everyone clear? Great; let’s begin.

The series of details to this point:

• Governor Bevin is a board member and investor in a company called Neuronetrix. His fellow investors include:
  • Neil P. Ramsey
  • Robinson Brown III
  • Charles A. Hill
  • David Tuell Richardson
  • Bradford P. Stengel
• Nothing wrong with investing together, of course. It is interesting to note that each of these five investors is getting a tax credit this year for their investments, as part of the Kentucky Angel Investors program. So are many other investors, so by itself it’s not so unusual. But, this is one business connection the Governor has with these individuals.
• Bevin appointed Bradford Stengel to the Kentucky Board of Architects.
• He appointed Neil Ramsey to the newly-formed Board of Directors for the Kentucky Retirement Systems (KRS), as part of the Governor’s overhaul of the pension board that included firing the previous board chair.
• Neil Ramsey owns and runs an investment management company, RQSI. Included in their offerings is a hedge fund.
• KRS has invested in hedge funds in the past, including funds where members of the investment committee have their own investments.
• Many of the investments that KRS makes are through secret, no-bid contracts. We have no idea who they are with, or what the fees are.
• In the just-finished General Assembly, the Senate passed a pension reform bill (Senate Bill 2) that included many necessary features … but one feature that didn’t make the cut was making the contract information more transparent to us, the voters … especially the fee structures.
• Finally, Neil Ramsey just sold a house and land in Anchorage to a mystery LLC for much less than the appraised value. To his credit, unlike some others in this sage, Mr. Ramsey has been willing to answer questions, and he maintains that the sale price was a fair price, and the PVA’s assessment is a mistake. He also notes that he has no idea who is behind the LLC that bought the house, as he dealt only with a lawyer.
• Who bought the house at a great price from Neil Ramsey? Who knows? No one is telling. But it seems pretty apparent that the Governor and his family are living there.

So, we have Governor Bevin appoint his co-investor Ramsey to the KRS board, to manage investments that we have no way of viewing for possible conflicts of interest, and Ramsey in turn sells a house and property for below-market value to an LLC that appears to be owned by the Governor. And no one except Ramsey will answer even the most basic questions about this series of events.

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In closing, I will repeat what I said at the top, as these are the two takeaways:

• This could be an ongoing case of pay-for-play, of quid pro quo … or, it could all be entirely innocent. Neil Ramsey could be determined to serve KRS well and never do anything that even hints of impropriety or that generates any extra money for him or his firm; and the sale of the house could have been priced correctly and the Governor did it through an LLC for tax purposes. That is all certainly possible.
• But, with the continual refusal to even identify who owns the LLC that owns the house … and the continual refusal of the Governor to release his tax returns … and the trainwreck of back-room contracts that is the KRS system of no-bid contracts – this whole thing LOOKS really bad. Really, really bad. Or, to use one of the Governor’s favorite words, it looks … pathetic.

When I’ve taken ethics training at work, we are reminded that we are to avoid even the appearance of acting unethically. And one way to do that is to overdo on the transparency front.

Governor, if you want to stop seeing stories about this, then stop acting like you are a private citizen whose affairs are your own, and start acting like an elected official who cares as much about ethics as you say that you do.

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A hat-tip to Jake at Page One, who has written about some of this here and here.
Also to Tom Loftus, who continues to do the work of good journalism for our state.