Former Kansas Bioscience Authority CEO Tom Thornton knew he was under criminal investigation and asked the agency for personal legal representation at least two weeks before he electronically shredded documents on his laptop computer, according to a letter obtained by The Eagle.
In a letter dated April 7, Thornton asked the KBA board to pay for his personal legal fees and indicated that he had retained James Eisenbrandt, a Prairie Village lawyer who specializes in white-collar criminal defense. Eisenbrandt is best known in Wichita for representing former Westar Energy CEO David Witting on federal charges of looting the utility.
The KBA, a state-funded agency, agreed to pay Thornton?s legal bills and has so far spent $53,671 on his defense, including about $1,800 to fly two lawyers to meet with Thornton in Ohio, where he is now employed in the Innovations division at the Cleveland Clinic.
The KBA has spent an additional $10,197 on legal representation for former KBA chief financial officer, Janice Katterhenry, who worked closely with Thornton.
Gov. Sam Brownback?s administration weighed in Saturday on Thornton?s legal fees and questioned why taxpayers should have to foot the bill for Thornton?s personal legal expenses.
?As good stewards of Kansas taxpayer monies, the KBA board should suspend all payments to Thornton?s attorneys and then pursue all legal means possible to seek a maximum recovery of taxpayer dollars from him," said an e-mail statement from Sherriene Jones-Sontag, the governor?s spokeswoman.
?I just think most Kansas taxpayers are going to find these expenses repulsive,? said Sen. Susan Wagle, R-Wichita, who has led legislative efforts to investigate the KBA since last year. ?It?s a colossal waste of taxpayer funds. The salary he earned, at $1.8 million (over 4 1/2 years) should have covered his legal expenses.?
Wagle also said the expenses paid so far could be just the beginning. ?There haven?t even been any charges filed yet,? she said.
Audit of the KBA
Billing records indicate that much of the expense revolved around Thornton?s and Katterhenry?s participation in a lengthy audit that was conducted by the national firm BKD LLC. The $960,000 audit, 900 pages of reports and supporting documentation, was released by the KBA on Monday.
The report identified few problems with the KBA?s handling of its primary duty, investing state dollars in bioscience companies.
But it faulted Thornton for destroying documents, misusing public funds for personal expenses, and creating an uncomfortable work environment by having an office romantic relationship with a woman he hired and later married.
Thornton has not returned messages seeking comment left on his office voicemail, e-mail and with a secretary at the Cleveland Clinic during the past week.
David Vranicar, who took over from Thornton as the acting chief executive of the authority, said the agency?s bylaws require it to pay for legal fees for current and former officers who are under investigation.
The former officers can be required to repay the authority for their legal expenses if the KBA board determines they acted in bad faith, against the interests of the authority, or had reason to believe their activities were illegal, the bylaws say.
Thornton?s letter and the resulting legal bills were obtained by The Eagle through a request filed under the Kansas Open Records Act.
Thornton?s letter
In the letter, Thornton wrote: ?I reasonably believe that in my capacity as an officer of the KBA, I am the target of a criminal investigation being undertaken by the district attorney of Johnson County. I have no reasonable cause to believe that any of my conduct as an officer of KBA has been unlawful. This will request that the KBA indemnify me in connection with such investigation and any resulting criminal proceedings which may be brought against me.?
On April 5, two days before Thornton sent his letter to then-KBA board president John Carlin, media reports had revealed that the district attorney was looking into allegations of wrongdoing at the authority. On April 6, the KBA confirmed that prosecutors had served subpoenas seeking to interview some of its employees.
When Thornton?s letter was filed on April 7, he said he had already hired a lawyer to represent him personally.
?I have retained James Eisenbrandt of the law firm of Berkowitz Oliver Williams Shaw and Eisenbrandt, LLP, to represent me in conjunction with the investigation and any resulting criminal proceedings,? the letter said.
When Thornton resigned from the authority on April 13, seven days after filing his letter, he retained possession of his work computer.
Files deleted
When he returned it on April 25, ?Forensic analysis of Thornton?s KBA-owned computer indicated that information had been removed from the computer, essentially all of the user-created content had been deleted, and that the free space had been wiped making the recovery of deleted items impossible,? the BKD report said. Programs to delete and electronically shred documents had been run on April 21, 22 and 23, the audit said.
Thornton admitted in an August interview with the auditors that he had wiped the computer.
?Mr. Thornton indicated that he did so because he was concerned that representatives of the State of Kansas would be involved in the review of the computer?s content and would possibly be politically motivated to inappropriately construe or use its contents,? the audit said. ?Mr. Thornton indicated that he had used the KBA-owned computer for his personal use and that it contained personal financial and tax information, family photos and other information of a personal nature, some of which would be embarrassing if made public.?
Auditors found some file extensions and data consistent with pornography, the audit said.
The audit said Eisenbrandt told interviewers that he was unaware that the computer files had been wiped until they brought it to his attention.
$475 an hour
The law firm?s billings show that the KBA is paying Eisenbrandt $475 an hour to represent Thornton.
The authority is paying $300 an hour for another partner in the firm, Christina DiGirolamo, $245 an hour for associate attorney Shahzad Naseem and $170 an hour for paralegal Leigh Oliver.
The KBA is also reimbursing the law firm?s expenses.
The biggest expense so far was $1,845 ? including two $845 plane tickets ? for Eisenbrandt and DiGirolamo to travel to Cleveland to meet with Thornton.
Sen. Chris Steineger, R-Kansas City, said he thinks the legal bills are excessive and questioned why Thornton was allowed to pick such expensive representation for himself.
?If we (the state) have to pay his legal bills and our own legal bills to chase him, we could end up spending $1,000 an hour or some crazy amount,? he said. ?It?s like a poison pill, or a disincentive to try to even pursue legal action against Tom Thornton.?
Audit cost under fire
Friday, before the legal bills were released, three legislative leaders from both sides of the aisle criticized the cost of the audit and said the time has come to move on.
"The problems seem to be with the head guy who?s now gone," said House Speaker Mike O?Neal, R-Hutchinson.
Senate Minority Leader Anthony Hensley, D-Topeka, said the audit showed there wasn?t really any conflict of interest and that investments were solid.
"It was a $960,000 witch-hunt, essentially, to uncover, what, was it 4,800 bucks total?" he said. The $4,800 refers to money that Thornton reimbursed the state about two weeks ago after auditors found he had used state money to buy artwork for his home and a plane ticket to Cleveland for a job interview.
House Minority Leader Paul Davis, D-Lawrence, said the audit was requested and its scope largely directed by Gov. Sam Brownback?s administration.
Davis said scrubbing the computer, sex in the office and using public money for non-business travel and art was clearly wrong. But he suggested some lawmakers seem to be hunting for more without significant evidence.
"This sort of reminds me of back to the Iraq War," he said. "We were looking for the weapons of mass destruction. And where are the weapons of mass destruction? We found some things that are disturbing and we found some good guidance for the organization going forward. But I think what this comes back to ... is the governor?s desire to have full control over the Kansas Bioscience Authority."
After learning of Thornton?s legal arrangements late Friday, Davis said he believes that Thornton is ?certainly entitled to representation in respect to his actions as an employee of the KBA.?
And he said he expects the authority will seek to recover the money if Thornton is convicted of a crime.
However, he added, ?the attorney fees seem to be a little excessive in my opinion; $475 an hour is far above what the typical Kansas attorney is charging. That concerns me a little bit.?
Contributing: Brent D. Wistrom of The Eagle
Reach Dion Lefler at 316-268-6527 or dlefler@wichitaeagle.com.
Source: http://www.kansas.com/2012/01/28/2193805/state-pays-thousands-on-ex-ceos.html
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