Elliot continued to preside over board meetings until armed Kentucky State Police officers showed up and threatened to arrest him. The latest came late Monday afternoon, when Shepherd ruled Bevin was wrong to remove Thomas Elliott from the Kentucky Retirement Systems board of trustees and threaten him with arrest, calling it a “flagrant abuse of executive power”. And it also temporarily allows Bevin to change state law by adding four new members to the board and forcing it to publicly disclose more of its policies and fees.
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The judge said that while Beshear raised “important and legitimate questions about the validity of the governor’s reorganization of the board”, the executive orders caused “no irreparable harm”.
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”.
At a meeting of the Public Pension Oversight Board Monday, Chilton explained that a search committee is close to choosing a firm after the governor’s office announced a request for proposals (RFP) for a “Pension Performance and Best Practices Analysis” in May with a bid deadline of June 30.
However, Shepherd agreed with Bevin that “the Kentucky Retirement Systems is in a state of crisis”.
Shepherd said he could probably issue a ruling by Tuesday.
Steve Pitt, general counsel for the Governor’s office, said Tuesday that Bevin’s orders revamping the board, removing Elliott and appointing Mark Lattis as Elliott’s successor were legally sound and that the order of Judge Phillip Shepherd will be appealed. Matt Bevin’s aggressive reorganization of state government and the lawsuits that have followed.
“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.
“Under Tommy Elliott’s chairmanship the KRS had an abysmal investment track record and operated under a shroud of secrecy”, Ditto said.
“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”, Beshear said.
Shepherd ordered that Elliott be restored as a member of the board, though not in his former role as chairman, while the case proceeds.
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Shepherd’s order is temporary until he issues a final ruling in the case, which could take several more months. Bevin has appealed that decision.
