September 21, 2013

'Poster boy' for the pension culture

Bobby Sherman’s resignation yesterday as staff director of the Legislative Research Commission should bring no tears over his pension. He walks off the stage with an annual pension in the neighborhood of $128,700 a year — more than $10,000 a month.

We have to apply the weasel phrase “in the neighborhood of” because, unlike public employee salaries, the pensions records of state workers (and legislators) are strictly guarded secrets. Therefore, we can only use the basic formula in calculating Sherman’s pension, which is “years of service X average salary X service credit rating (a % factor).”

If Sherman bought years of “air time” — which means exactly like it sounds, pulling years of service out of the air, up to five years — that would add about $20,000 each year to his pension draw; and if he served in the military, he could count those years, too.

All of this highlights once again, the serious need for transparency in all of Kentucky’s six state-administered public employee retirement systems. There is no federal law that says the pension records must be closed. Kentucky’s records are kept secret under a law enacted in 1972 under Gov. Wendell Ford, when governors totally dominated the legislative branch. Four states have opened their government employee pension records to the public: New Jersey, Ohio, Oregon and Pennsylvania.

The three factors explained

1. Years of Service
Sherman began work at LRC in 1978 and left the institution in 1995 — giving him 17 years of service. He then worked maybe two years in the Kentucky Department of Education, increasing his years of service to 19. He was then hired as LRC director in 1999, serving 14 years in that capacity —giving him a career total of 33 years for pension purposes.

2. Salary
Sherman’ salary when he resigned was $195,000 a year.  He apparently had not received any raises since 2008, when his salary was spiked from $132,000 to $195,000, by mainly then-Senate President David Williams, because Sherman threatened to retire through a narrow window of a temporary law that offered an incentive for public employees to retire early — under the incentive, early retirees were allowed to calculate their pension using a “Hi-3” instead of a “Hi-5” on the salary.

Negotiating a 47 percent salary hike was a brilliant move by Sherman, and a display of disrespect for the state treasury by Williams and the LRC leadership who went along with it — but then that’s an honored custom of legislators, disregarding the cost of pensions while bestowing super-rich pensions on themselves. To read more about this, click here.

By staying on an additional five years, with the higher salary, Sherman increased his pension an estimated $54,000 a year for the rest for the rest of his life

3. Serve credit rating
The percentage factor we used in calculating Sherman’s pension is 2 percent. That’s an approximation.

It is appropriate here to say that SB 2, the pension reform bill enacted in 2013, did not solve the pension crises, contrary to proponents' claims; state employees haven’t had a raise in years; and education funding is in decline — and a big reason for the latter two is, the pension cost is crowding out pay raises, and it’s also crowding out essential government services.

Bobby Sherman could be a “Poster Boy” for the Frankfort culture of milking the pension systems like a big chocolate milk cow.


September 8, 2013

New light on sexual harassment allegations

Two female employees in the office of House Speaker Greg Stumbo, Yolanda Costner and Cassaunder Cooper, filed complaints in February with the Legislative Research Commission and in August with the Legislative Ethics Commission, alleging sexual harassment by Rep. John Arnold, D-Sturgis. A third woman, Gloria Morgan, who works at the legislature on the nonpartisan staff, filed a similar complaint against Arnold.

The issue is about more than the sexual harassment allegations. It’s about the integrity of the institution. And it could become a major political issue in next year’s elections, where control of the House chamber lies in the balance.

Even though legislative staff and some of Arnold’s colleagues reprimanded him, and told him to stop bothering the women, he continued the irrational behavior, according to news accounts.

Why would he defy repeated instructions to stop? There could be a valid explanation, different than what has been reported — and that is, Arnold’s mental health.
In addition to quadruple-bypass heart surgery about two years ago, he was diagnosed with Parkinson’s disease more than a year ago, and, indications are now he may have Dementia, too. The latter two illnesses can be related. According to Mayo Clinic online, “Many people with Parkinson’s disease eventually develop dementia symptoms (Parkinson’s disease dementia).”
According to, a health-answers resource, “It’s common for dementia patients to suddenly become sexual without awareness that their actions are inappropriate—for instance, removing clothing, exposing oneself in public, or touching and saying tasteless things (emphasis added) to strangers and caregivers.”

A source in Western Kentucky who knows Arnold well told Kentucky Roll Call that Arnold’s “personality has changed; he says things out loud, louder than he normally would, while waving his arms; he’s not discreet; and he forgets things.”

Further, the side effects of certain medications for the treatment of Parkinson’s disease can cause, in some patients, a state of “euphoria” — akin to an alcohol buzz. 
Arnold’s illnesses were evident in his campaign for re-election in 2012, a race that he won by just five votes out of 15,779 votes cast. He was too ill from his heart surgery to campaign much; his wife, Sandy, did most of the campaigning. His opponent’s campaign in the fall election was told by a couple of sources in Arnold’s home county of Union that he had Parkinson’s and Dementia. The GOP nominee, Tim Kline, of Daviess County, did not use the health issues in the campaign.  

Leaders meet

When the House and Senate leaders met Wednesday, September 4, in the Capitol Annex, to discuss the Arnold matter, more was revealed than meets the eye. The high level of intensity in the room, and the carefully calculated words, gave off an impression that the legislative leaders were navigating a minefield, sending to the rest of us the message that it’s a mess they’re in. And, if they fail to contain it, what we’ve seen so far could be the early snowflakes of an avalanche. 

The leaders in the House and Senate have a cultivated sense of politics and can usually separate the trivial from the important; in this case, their sixth sense kicked in. They recognize that the media is not in a feeding frenzy yet, but that it could come to that.

They met for two hours in a room filled with reporters; and then they met four hours in executive session behind closed doors.

Republican Senate President Robert Stivers presided. He led the call for the meeting because the LRC staff director, Robert Sherman, and the Democratic Speaker’s office, had not inform the Senate leadership, including Democrats, apparently, that there has been an ongoing sexual harassment investigation since February. Stivers first heard of it from news accounts about three weeks ago, near the end of the special session on re-districting.

In the first meeting, the open one, Stivers sought an explanation, and the House Democrats maneuvered, in effect, to suppress it by trying to keep the meeting open and not go into a closed session, as strange as that may seem. One would assume that open meetings result in more information made public; but in this case, the open meeting had a chilling effect on providing information.

Sherman testified in the open meeting, but he repeatedly prefaced his replies with a precautionary legal point, warning that he could not say much because of the confidentiality language in the agency’s personnel policies and because of possible litigation. Consequently, over the course of two hours in the open meeting, very little of substance was revealed. What we witnessed in Sherman’s testimony was a dance by the Fifth Amendment’s first cousin.

Both sides no doubt expected Sherman to talk more freely in private. So there was a motion by GOP Rep. Jeff Hoover to go into executive session behind closed doors to discuss the issue as a personnel matter. The motion carried, 10 to 5. All five of the House Democrats voted no, saying a closed meeting violated the Open Meetings law, and they walked out.

Stivers said before going into the closed session that it would be recorded, and that the recording would remain under seal unless released by a court order, or by LRC.

Clash of attorneys

Costner and Cooper have hired an attorney, Thomas Clay, of Louisville, who said to the media after the open meeting that this case will be resolved, either through a settlement or litigation. When a reporter asked him whether there have been settlement discussions to date, Clay would not comment.

The claimants and their attorney have suggested that more complaints and lawsuits may be filed, possibly involving other legislators.
Arnold has hired an attorney. If the sexual harassment charges go to court, his health issues are sure to be a big part in a presentation of the other side of the story. 


Once Arnold’s health issues become fully known, it could change the game in Frankfort, in terms of the current allegations. Right now, it’s about legislators sexually harassing their female staff. That could shift somewhat to mental illness among legislators, which presents the question, “who’s responsible” for detecting emotional disorders among legislators early enough to prevent sexual harassment?

And it raises several other questions, too. Speaker Stumbo has named a five-member investigated team in the House to recommend whether to censure or expel Arnold. It’s predictable: the House won’t expel a member because he’s sick.

And if the judge’s ruling were favorable to the claimants, the liability would more likely fall on the legislature (i.e., taxpayers) rather than on Arnold. That’s how I see it.