Judge allows Bevin to reorganize KRS board, blocks removal of Elliott

08/22/2016 06:57 PM

UPDATED FRANKFORT — In a ruling released Monday evening a Franklin Circuit Court judge has allowed Gov. Bevin to reorganize the Kentucky Retirement Systems Board of Trustees, but he has blocked the governor’s removal of the board chair.

In a ruling on Monday, Judge Phil Shepherd granted a temporary injunction keeping Board Chair Tommy Elliott in place, despite an executive order from Bevin removing Elliott from the post.

Pending a final judgement, Shepherd ruled that Elliott could once again serve in the role “until the expiration of the term to which he was appointed, after proper motion and hearing thereon, enters an Order approving his removal, or an Order approving administrative removal procedures that accords him due process of law prior to his removal.”

The order sets aside Bevin’s executive order removing Elliott, but the judge did not approve a request for an injunction against Bevin to halt his reorganization of the Kentucky Retirement Systems. The denial means that the court will allow the reorganization of the KRS governing board, “except to the extent that this Executive Order replaces Mr. Elliott prior to the expiration of his statutory term of office.”

Shepherd orders Bevin, “and all his agents, employees, and persons acting in concert with him are specifically enjoined from interfering with the right of Mr. Elliott to participate as a member of the governing board of the Kentucky Retirement Systems, and his membership and participation on the Investment Committee, pending a final judgement in this action.”

In May, Elliott was threatened with arrest if he took his seat at the KRS board meeting.

Bevin’s office reacted to the ruling in a statement saying they were “pleased the court has recognized Gov. Matt Bevin’s authority to reorganize the KRS board.”

“The new transparency provisions and board members with substantial investment experience are critical to turning around the nation’s worst funded pension plan,” the statement said.

“While we disagree with the court’s decision to allow Mr. Elliott to serve on the board to which he was never appointed, we are confident the court of appeals will reaffirm that Mr. Elliot is not a member of the new KRS board,” the statement from the Governor’s Office continued.“Under Tommy Elliott’s chairmanship the KRS had an abysmal investment track record and operated under a shroud of secrecy.

“Gov. Bevin will continue fighting to protect the pensions of state workers and bring transparency to state government. Attorney General Andy Beshear should drop his politically-motivated lawsuits and stop his efforts to fight transparency and protect the status quo. Our state workers and retirees deserve better.”

Attorney General Andy Beshear also had something to applaud and desire in the ruling.

“While our request for a temporary injunction was not granted, Judge Shepherd in his ruling today recognized the important and legitimate questions my office has raised about the governor’s authority to re-organize the KRS board,” Beshear said in a statement. “Our goal is to quickly move this case to a final decision at the trial court level and ultimately to the Supreme Court of Kentucky.”


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