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Time: 07-02-2011 21:46 User: mstollhaus

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FEATURES & TRAVEL | E1

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LOUISVILLE, KENTUCKY

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In 2009, a city clerk was dead, her ex-husband shot. Questions linger on the official account of

Owen County

what really happened in

MSD audit criticized law firm


Outside attorney disputes findings
By James Bruggers
jbruggers@courier-journal.com The Courier-Journal

An internal audit done three years ago by the Metropolitan Sewer District was sharply critical of the business practices of its outside attorneys law firm at the time, but the audits findings and recommendations were apparently never shown to the MSD board. Neither the MSD board chairman, Arnold Celentano, who was on the board in 2008, nor the longtime outside counsel who was named in the audit, Larry Zielke, could recall seeing the audit dated April 2008 until MSD officials made it available to The CourierJournal last week under the Kentucky open records law. The audit, done by for-

mer MSD internal auditor Connie Davis, said the law firm of Pedley, Zielke, Gordinier & Pence LLC, Zielke which did major work for MSD, lacked adequate corporate records, did not keep time sheets for billing and payroll, and in some cases charged the rate of a partner for work done by an associate. See MSD, A8, col. 1

AUDIT AND RESPONSE


To read MSDs internal audit of the Pedley, Zielke, Gordinier & Pence law firm and attorney Larry Zielkes responses, see the online version of this story at www.courier-journal.com

Deaths fail to halt kids being left in vehicles


Hit panic button if child alone
By Bill Luster, The Courier-Journal

By Patrick Sullivan and Jessie Halladay


The Courier-Journal

Children left in cars

Sharon Loaring and her husband, Russell, longtime friends of the late Owenton city clerk Charlotte Burke and co-executors of her estate, arent convinced the events of Burkes death are as cut and dried as authorities believe.
By R. G. Dunlop
rdunlop@courier-journal.com The Courier-Journal

OWENTON, Ky. It didnt take Kentucky State Police Detective Steven Goodale long to decide what had happened at 417 Cubbage Ave. on the morning of Jan. 24, 2009: Charlotte Burke, the Owenton city clerk, had dropped by to visit her ex-husband, Danny Cobb, about 9 a.m. that Saturday. They chatted Available only in the family in your print room on the lowedition today. er level of his brick house. Without warning, Burke pulled out a .32-caliber revolver and shot Cobb in the side, then turned the gun on herself, firing a bullet into her chest. An attempted murder, followed by a suicide thats what the injured Cobb later told Goodale, according to court records. And the detective saw no reason to disagree.

EXCLUSIVE

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SUNDAY

It looks pretty clear to me, but I still have to go through the investigation, he told Cobb the next day, according to an audio recording of his interview with Cobb at the University of Kentucky Medical Center, where Cobb was being treated. I may have some more questions when youre better. Then well put it behind us and be done with it. But not everyone agreed that the events at Cobbs house that morning were as cut and dried as Goodale seemed to believe. The foremost skeptics were Sharon and Russell Loaring, longtime friends of Burkes, who immersed themselves in the details of the case after becoming the co-executors of her estate. They became convinced the investigation was shoddy, and in response to a damage claim Cobb filed against the estate in Owen County Circuit Court, they asserted he was responsible for Burkes death. Cobb denies in court records that he killed Burke. He did not return a half dozen telephone messages left See SHOOTINGS, A6, col. 1

Louisville

An examination of media reports about 494 child vehicular The heat index was 91 de- hyperthermia deaths for the grees when Louisville Metro period of 1998 to 2010 shows Police pulled into a strip the following circumstances:
club parking lot on the night of May 31 and found a 1-yearold boy soaked in sweat, sitting alone in the backseat of a car, while his parents were inside. Ten days earlier, help had come too late for Kenton Brown, 2, who died after being left alone in his mothers car for several hours during the day. The coroner ruled his death was consistent with environmental hyperthermia, most commonly known as heat stroke. And on June 4, two boys, ages 9 and 12, were found sitting unattended in a hot car outside a Portland neighborhood Kroger. Despite a wave of media attention to all three cases and others like them, experts and law-enforcement officials say some parents still arent getting the message children should never be left alone

OWEN COUNTY

Child forgotten Child playing by caregiver in an (253 children) unattended vehicle (150)

71

227

Owenton
N

75

51%

30% 17%

OWEN COUNTY
127

64

Frankfort
By Joanne Meshew, The C-J

Child intentionally Circumstances left in vehicle by adult (86) unknown (5)

1%

By Joanne Meshew, The C-J

We may never know the truth.


DR. WILLIAM SMOCK, a clinical professor of emergency medicine at the University of Louisville who was hired by Burkes estate to review the case

in cars, especially in the summer. People need to understand that tragedy can occur in minutes, said Sgt. Robert See CHILDREN, A7, col. 1

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Time: 07-02-2011 19:11 User: mstollhaus

PubDate: 07-03-2011 Zone: KY

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A8 |

SUNDAY, JULY 3, 2011 | THE COURIER-JOURNAL

FROM PAGE ONE & WORLD |

courier-journal.com

KY-

Drug violence inspires Mexican art


Creators react to wave of killings
By Olga R. Rodriguez
Associated Press

MEXICO CITY Dozens of plastic foam heads rain onto the stage. Four drug traffickers in fringed jackets and sparkly pink cowboy hats bat them into the audience with toy AK-47s. All the while, the cast croons, Let them slit our throats, let them pack us up let them not ask any questions, let them not investigate. This is cabaret, Mexico style. Las Reinas Chulas, or the Beautiful Queens, parody drug violence in a show that fills nightclubs around Mexico. Violence now pervades the arts, like other aspects of Mexican society. From paintings to movies to opera, the killings and kidnappings that dominate headlines are now the topic du jour for artists. Many say they also hope their work helps to spark change in a society that seems to be growing numb to the bloodshed. Art always tries to talk about where we are heading, said Ana Francis Mor, a performer with Las Reinas Chulas. Its a thermometer for society. Even as the art flourishes, audience reaction and public support have been mixed, mirroring Mexicos ambivalence about how to

Raymundo Ruiz/Associated Press

Artist Gilda Lorena Martinez stands next to one of her paintings last month in Ciudad Juarez, Mexico. Its my way of saying, Look how fractured we are as a society, she said of her work.
cope with the violence that government figures show has so far taken at least 35,000 lives. Every day we hear about the corruption, the killings, the impunity, and it feels like all of that is closer and closer to us, yet no one does anything, no one says anything, said Semiramis Huerta, a cabaret actress in The United Narcos of Mexico, which closes with corrupt police and drug traffickers dancing in a chorus line. Narco themes have been showing up in visual arts for at least a decade, especially in states such as Sinaloa, home to a powerful cartel. But in the last two years, more exhibits have gone national and even international, and the amount of such art has climbed. A movie, starkly titled Hell, about a town overtaken by a drug lord who is also the mayor, swept the Arieles, the Mexican Oscars, this year. A Mexican art installation that reached the 2009 Venice Art Biennial in Italy includes a person mopping the bare floor with a mixture of water and blood. Painter Ricardo Delgado Herbert showed his portraits of monster-like hit men at an exhibit in Miami Beach in March. Now the 36-year-old artist from the city of Tampico is working on a series of paintings depicting drug traffickers and soldiers as both saviors and executioners in the Stations of the Cross. Its his way of expressing how Mexicans are trapped in the crossfire between two forces that are neither completely good nor completely bad, Delgado Herbert said. He began painting the characters after a 2004 shootout between soldiers and gunmen in Matamoros, across from Brownsville, Texas. He said thats when he realized those characters I heard about growing up were among us and were confronting us. My work has been my constant complaint, he said. I paint what I dont like. A similar sense of disillusionment drives painter Gilda Lorena Martinez, whose series, City of Sand and Blood, hung in the halls

of the Mexican Congress in April. Martinez has lived for 20 years in Ciudad Juarez, Mexicos most violent city, and she started putting her feelings on canvas in 2008. In her series, ghostly figures with anguished faces are captured in beige and gray, accented with blood-red brush strokes. I was simply painting what I was feeling, as an outlet, she said, adding that for five months she became seriously ill from the stress of the insecurity surrounding her. Its my way of saying, Look how fractured we are as a society. While some artists say working with violent themes has helped them process how the lives of Mexicans have changed, others have a more political message. They say theyre chronicling the complexity of the countrys security situation and how its tied to the insatiable demand for drugs in the U.S. and other first-world countries. Las Reinas Chulas have resisted softening their work, and the change in their audiences mood has been palpable as real-life violence has grown, Mor said. The crowds used to laugh at the groups antics, which include political satire and outlandish costumes. Now, many of the narco jokes elicit an awkward silence. In the last two years, the jokes began to take on a different meaning, Mor said. Some people do seem shocked, but in the end we all laugh, because whats happening hurts us too much.

MSD | Board chairman doesnt recall seeing internal audit before last week
Continued from A1
The auditor also found that MSD did not have a contract with Zielkes new firm, which took over the MSD business after the Pedley firm dissolved in December 2007. The audit also concluded that MSD had given too much trust and authority to Zielke in determining legal strategy, saying that created a conflict of interest that could benefit him. It could not be determined what happened to the audit once it was done. Davis said she could not discuss the audit. At the time, she worked in the Finance Department, headed by Marion Gee, who has since retired and could not be reached. MSD Executive Director Bud Schardein said he would not discuss the audit, and Paula Purifoy, the agencys legal services director, did not return phone messages or emails asking for an interview. William H. Fortune, a University of Kentucky law professor who has taught ethics classes, said the audit raised questions a board would typically want answered before hiring or rehiring an outside counsel, which the MSD board did after the audit was written. The board had to have that information, he said of the audit. It makes you wonder what was going on at MSD. Three former board members who served in 2008 former Chairmen Audwin Helton and Beverly Wheatley and former Vice Chairman Martin Hoehler did not return telephone calls or emails on Friday. Two other members who were on the board in 2008 Ben Richmond and Charles Weiter declined to be interviewed, referring questions to Celentano. I came on the board in 2007, and I dont remember that coming up, Celentano said of Davis audit. But I will look into that and give it some consideration. He said Davis findings will likely factor into a pending management audit requested by Louisville Mayor Greg Fischer on June 7, following disclosures about MSD management earlier in The Courier-Journal. The newspaper reported on Heltons, Wheatleys and Hoehlers businesses that provided services to MSD and those board members subsequent resignations, and MSD payments of almost $300,000 in bonuses and merit raises to its top employees during the recession, including to the executive director and chief engineer after they pledged to take a 10 percent pay cut. For his part, Zielke said he didnt see the internal audit until Wednesday the day after it was provided to the paper. He rebutted its findings and recommendations point by point in an email, noting in part that the audit was done on his former law firm. Zielke organized his current firm, Zielke Law Firm, in late 2007, according to Kentucky secretary of state business records. All the matters you inquired about go back to the Pedley firm, and I was not managing partner nor in charge of billing, Zielke said. That firms managing partner, Lawrence Pedley, died in 2007, precipitating the firms breakup. However, one of Zielkes former partners, James Ballinger, said it was common practice at Pedley, Zielke, Gordinier & Pence for attorneys to review their clients bills before they were sent out for payment. Ballinger, who sued Zielke over financial matters during the Pedley Zielke breakup, declined to comment further. Zielke denounced the quality of Davis report, which asserted that one of his current law partners, who also worked at Pedley Zielke, once misrepresented information to MSD on a women business enterprise application. The audit recommended she be barred from working for the agency. That attorney, Nancy Schook, denied any wrongdoing in an email to the newspaper, and she continues to work for MSD as part of Zielkes current contract with the agency.

MSD board Chairman Arnold Celentano said the internal audit likely will factor into a management audit.
months after completing the internal audit. A past MSD newsletter shows she was among 36 MSD employees honored in May 2008 for exceptional work performance that year. That honor came a month after she completed the audit. It isnt clear whether MSD executives followed any of Davis recommendations because MSD officials would not discuss the review. But some of Davis recommendations are now practice at the agency. For instance, the agency now has a contract with Zielkes firm, and recent billing from that firm specifies who is doing the work. Zielke said he was not in a position to know whether the agency had acted on the recommendations. Zielkes billing practices were the subject of Courier-Journal coverage in 1986, when the newspaper described how he billed MSD and another public agency, the Parking Authority of River City, as many as 19 hours in a single day. MSD officials defended Zielke at the time, but the newspaper reported that Zielke stepped away from his PARC duties about two weeks after the newspapers report. More recently, Zielkes contract and relationship with MSD have become an issue. Jerry Ferguson, former MSD human resources director, cited Zielkes no-bid contract as wasteful and excessive in a threatened whistleblower lawsuit last year, following Fergusons dismissal by Schardein for unspecified reasons. The MSD board in December approved a $140,000 settlement with Ferguson that stipulated that he keep silent on past MSD matters. The newspaper reported May 30 that Zielke and his current or previous firm have been paid at least $5.9 million by the agency since Jan. 1, 2006, including $950,000 for handling bond sales.

Audit called worthless


Zielke described Davis report as erroneous and a worthless nothing, asserting the MSD internal auditor didnt know much about the legal business. He noted that it was not signed by Davis, and sections set aside for a management response were never filled out, suggesting that it was never accepted and acted upon by MSD executives. Another MSD attorney, Stephanie Harris, who handled the open records request, identified Davis as the author. Schardein also had no comment. I will have no comment on the internal audit until the full internal management review, requested by Mayor Fischer, is completed, he wrote in an email. When that review is complete, I will abide by its findings and recommendations. Chris Poynter, a spokesman for Fischer, said the mayor would withhold comment because his own audit will be under way soon. Davis said she could not discuss the audit without permission from the MSD board of directors, or she would be in violation of the professional standards of the Institute of Internal Auditors. Davis now works as the internal auditor for Kentucky Retirement Systems, which oversees billions in retirement assets for state and local workers. She said she retired from MSD in July 2008, three

2 firms paid for bond work


Additional documents released last week by MSD under the open records law show MSD actually paid Zielke $1.09 million for bond counsel work since 2006 and that the agency also paid the firm Wyatt, Tarrant & Combs the same amount during the same period for legal services on the same bond measures. The two firms work together as co-bond counsels, with Zielke handling the MSD board and Metro Council issues, and the Wyatt firm handling the documents and tax issues, said Stephen Berger, a member of the Wyatt public finance services team. He said his firms tasks include working with MSD staff and certifying that the bond issue is valid and tax-exempt. Theres a division of labor,

Contract renewal on hold


Zielkes annual contract with MSD was up for renewal in June, but thats on hold, pending the results of the proposed new audit. He has worked for MSD for at least 25 years. We will wait for the management audit before finalizing a new contract, Celentano said.

Berger said. Zielke said he works with financial advisers, shares in drafting some documents, works with the MSD board and Metro Council officials and shares in the certification. Its not double billing, he said. Its simply a sharing of the duties. MSD also has four in-house attorneys. Schardein has previously told the newspaper that Zielke has served the agency well. I wouldnt want to walk into a courtroom without him, Schardein said in 2007. Among the internal audits findings is one alleging that Zielke has a conflict of interest by advising the board on legal matters and then offering to have his firm do the resulting work. Zielke had been given too much authority, the auditor wrote, and MSDs in-house legal services director should be the one to determine the legal work to be done in house and what should go outside MSD. Fortune, the UK law professor, agreed there could be conflict, but said its difficult to say without knowing more about Zielkes relationships with board members and the extent to which he provided them with a choice of alternative legal services. If there are alternative firms, he should advise them of that, Fortune said. He has an obligation to be completely candid about everything. Zielke said there is no conflict. I do not present issues or cases, then request that my firm handle the matter, he said, adding that he also doesnt decide which work he does or which is assigned to staff attorneys. He said his legal assignments come from MSD legal services director Purifoy, Schardein or the board. The audit also concluded that Pedley Zielke had overbilled MSD $149,124 between July 2004 and May 2005 by charging the higher partner rate for work done by nonpartners, some just out of law school, and that Pedley Zielke attorney Schook misrepresented information on her women business enterprise application and that she did not have a separate business established when she applied for certification. The Schook matter threatened the integrity of MSDs program of making sure a certain percentage of its contracting business goes to certified minority- and womenowned businesses, the auditor concluded, recommending she be barred from working for MSD. Schook rejected the audits findings, which also provided more detail about allegations first made public in an Oct. 23, 2007, article in the newspaper. When the Pedley Zielke firm was breaking up, one of its partners, Ballinger, made a similar claim in an October 2007 lawsuit that was filed and settled the next day, the C-J reported at the time. The C-J reported Ballingers claims that Zielke helped Schook file a fraudulent application with

FINDINGS OF MSD INTERNAL AUDIT


No way to determine if rate charged for legal work was accurate. No contract with Zielke Law Firm after it took over for the Pedley, Zielke, Gordinier & Pence firm. A lack of corporate records from the Pedley Zielke firm. Lack of time sheets to verify billing. An incorrect document was provided for payment in one case. MSD has given too much trust and authority to Larry Zielke, creating a possible conflict of interest. MSD was charged a higher rate for work that should have been done at a lower rate. Lawyer with Pedley Zielke inaccurately completed a women business enterprise certification form. An overcharge of $149,124 occurred between July 2004 and May 2005.
MSD to become an independent female contractor as a way to help pay for the care of a child she and Zielke had together. Zielkes lawyer in that lawsuit confirmed that Schook and Zielke had a child together. All allegations were dismissed and removed from the record, Zielke said. The lawsuit, while settled, was still on file in Jefferson Circuit Court on Friday. Schook, a founding partner in the Zielke Law Firm, called the Davis audit findings about her factually flawed. I never misrepresented anything on my application, she wrote. In fact, the MSD staff was very helpful in assisting me in completing the application and when they told me that they felt I needed a longer history of independent income to qualify, I withdrew my application, mooting the issue. She said she doesnt need the certification now because she is a partner in the Zielke firm. Zielkes contract, as amended last year, now allows for any women or minorities associated with his firm to count toward his obligation to provide work for minority and women business owners. Zielke said that addendum made formal what had been a longtime practice. Schook said there arent many 100 percent woman owned law firms or sole proprietors qualified as trial litigators in Louisville. Zielke also said there were no overcharges, and he cited a lack of specific examples in the Davis audit as support for his position. Poynter, the mayors spokesman, said the first meeting of MSD officials, the mayor and state Auditor Crit Luallen, who will advise on selection of an outside auditor for the forthcoming management audit, is scheduled for Thursday. We will be discussing the scope of the review, Poynter said. The (Davis) document is certainly something that we will pass along to Luallen.
Reporter James Bruggers can be reached at (502) 582-4645.

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