Crews diputes claims in Kay's commercial in special election ... how accurate is the ad?

06/17/2013 05:00 PM

James Kay, the Democratic nominee in the 56th House District special election, took to the television airwaves of the 56th District over the weekend with an ad attacking the background of Republican candidate Lyen Crews.

Crews has touted his experience as chief financial officer for hospitals on his campaign website and during events with voters by saying the General Assembly needs an accountant.

But Kay’s ad seeks to undermine that. Crews most recently served as chief financial officer for Midway College. And the ad claims he was part of the leadership team that cost the college money in a failed attempt to start a pharmacy school. Before that Crews was CFO for Woodford Memorial Hospital in the mid-1990s. The hospital later filed for bankruptcy protection and eventually closed years after Crews left.

It’s the latest ad in the increasingly expensive and contentious June 25 special election in the central Kentucky district that covers Woodford County, western Lexington and eastern Franklin County.

The ad comes after a GOP super PAC — the Republican State Leadership Committee — launched an ad criticizing Kay, and independent candidate John Mark-Hack as being too liberal and “professionals at politics.”

Crews, who was campaigning over the weekend in Versailles, said Kay’s commercial is disingenuous by linking him to the financial problems of the hospital, which he said was on sound financial footing when he left in 1997.

“I am very proud to say, and the records show, if anyone bothers to go to the records – - which my opponent obviously has not – - if you go look at the records the records show the year that i left the was a profitable year for Woodford Hospital. After I was gone it started it’s decline it lost several hundred thousand dollars and went on down from there,” Crews said.

THE BOTTOM LINE: _The ad is technically factual but greatly overstates the roles Crews may have played in the hospital’s financial saga and college pharmacy school issue. Crews didn’t go to authorities on questionable spending by the former Woodford Memorial Hospital CEO but did take it to the hospital’s board. And records show that the hospital was in better financial shape when he was there than after he left. And he was part of the leadership team in Midway College when the school failed to open a pharmacy school. But accreditation was the biggest hurdle — not the finances. _

Woodford Memorial saga

The 990 tax returns of Woodford Memorial from 1998 include financial information the last year Crews worked at the hospital — 1997 — and the year after he left.

In 1997 the hospital ended the fiscal year with an operating loss of about $365,000 and more than $10 million in assets. The year after Crews left, the operating loss doubled and its assets dropped by $1 million.

Nancy Littrell, the former CEO of Woodford Hospital, was indicted on seven felony theft counts against her related to travel expenses. She was dismissed from the hospital in 1999.

News articles from 2000 quote Crews as saying Littrell’s travel increased from an average of $17,000 to $34,000 in 1995 and almost $66,000 in 1996 while Crews was the chief financial officer.

Crews told Pure Politics that he brought the spending to the hospital board’s attention, and began looking for a new job when the board failed to heed his concerns.

Littrell later went to trial for theft, and according to a September 2002 report in the Lexington Herald-Leader, Crews was called to stand to discuss Littrell’s travel expenses.

Crews testified that his analysis of Littrell’s travel showed that she owed the hospital nearly $17,000. The Herald-Leader article said:

“Under cross-examination, Crews said he never swore out a criminal complaint against Littrell to police, never recommended that the hospital board swear out a criminal complaint, and never offered to explain his spreadsheet of expense reimbursements to the board.”

Failed attempt for Midway College pharmacy school

As for what the ad says about the Midway College issue, Crews was CFO of the college when it embarked on an effort starting in January 2010 to create a non-profit pharmacy school in Paintsville.

Crews said in an interview Saturday that the college did lose $2 million in the effort but that the financing was in place and wasn’t the problem. The Accreditation Council for Pharmacy Education denied the school accreditation in three attempts in December 2010, May 2011 and December 2011.

By that point, the school already had commitments from 20 PhD students and had lined up pharmacy sites across the state where students would be able to get practical experience. But the accrediting council had curriculum concerns, Crews said. A Herald-Leader article from May 2012 reported that the Midway College Board of Trustees conceded that the effort wouldn’t go forward but that the accrediting agency didn’t give a reason for its concerns.

“It was like we had a Lamborghini sitting in the driveway all tuned up and a professional driver in the seat. He just couldn’t pull out of the driveway because he didn’t have a license,” Crews said.

Ryan Alessi contributed to this article

About Nick Storm

Nick Storm joined cn|2 in December 2011 as a reporter for Pure Politics. He is now the Anchor and Managing Editor of Pure Politics. Throughout his career, Nick has covered several big political stories up close, including interviewing President Barack Obama on the campaign trail back in 2008. Nick says he loves being at the forefront of Kentucky politics and working with the brightest journalists in the commonwealth. Follow Nick on Twitter @NickStorm_cn2. Nick can be reached at 502-792-1107 or nicholas.storm@twcnews.com.

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