On the Beat in the Bluegrass

By Brett Barrouquere
The Associated Press

A north-central Kentucky judge-executive, his deputy and the county treasurer have been indicted on charges of theft and that they misspent public money.

The indictments and a report issued by an Owen County grand jury on Wednesday describe fiscal mismanagement in the county of about 11,000 residents, located about 75 miles northeast of Louisville.

The indictments charge Judge-Executive William O’Banion with taking more than $6,000 from the county, writing off an ambulance bill of more than $600 that he owed the county and writing off other ambulance bills owed by others.

Deputy Judge-Executive Renaee Gaines is accused of taking $16,959 more than her $35,000 salary. Treasurer Gayla Lewis is accused of letting it happen.

O’Banion referred calls to his attorney, Steven Howe of Dry Ridge. Howe said O’Banion is due in court Oct. 7 for arraignment.

“We just intend to defend him against the indictment,” Howe said.

Gaines and Lewis did not immediately return a call to their office.

O’Banion is charged with felony theft, felony theft of services and two counts of first-degree official misconduct. Gaines faces charges of felony theft, complicity to felony theft and to felony theft of services and one county of official misconduct. Lewis is charged with complicity to felony theft and two counts of official misconduct.

The indictments came after a state audit earlier this year uncovered problems in the county’s financial records. The report says O’Banion and Lewis attended a meeting to review the audit, but the county attorney and magistrates weren’t told about the review.

State Auditor Crit Luallen said her office will cooperate with law enforcement as the case moves forward.

“It’s a sad day whenever public officials are accused of breaking the public’s trust,” Luallen said.

The grand jury also issued a report saying four county magistrates are receiving illegal payments of $300 a month from the Owen County general fund.

Under state law, magistrates are allowed to receive the payments for serving on committees, however, Owen Fiscal Court does not have any committees.

The fiscal court attempted earlier this month to make the payments legal by appointing members to the county park board and the Northern Kentucky Area Development District. But, those are not fiscal court committees the report states.

“In addition, the Grand Jury recommends in accordance with applicable law, that the Owen County Attorney and/or other County officials take immediate steps … to recover the lump sum expense allowance monies that have been illegally paid to the Magistrates,” the report states.

The fiscal court also passed a motion in 2007 to classify the magistrates’ positions as full-time so they could participate in the state’s county employee retirement system and get state health insurance.

State law requires employees to work an average of 100 hours a month to qualify for those benefits. However, the fiscal court only meets once a month for about two hours.

The magistrates contend that they work answering residents’ questions, but do not document the work.