The CRM affair

Election meddling and obstruction of justice in the Lexington swamp

On a Thursday evening in mid-September 2018, the Lexington-Fayette Urban County Council took the unusual step of tabling a long simmering project to relocate City Hall. The decision was unusual because a new City Hall seemed a fait accompli. Along with the newly renovated Old Courthouse, it was to be a final capstone of urban achievement for outgoing Mayor Jim Gray. A panel had already scored and approved the $155 million contract with CRM Companies to renovate the vacant Lexington Herald Leader building into the world class City Hall that Lexington deserved.

Here is Herald Leader journalist Beth Musgrave describing the 7-5 vote to cut off city negotiations with CRM Companies:

Vice Mayor Steve Kay, who had previously supported the CRM Companies’ proposal, shocked the council prior to the vote by saying it was clear that there was not a consensus on the council and said he would not support moving ahead with negotiations.

Musgrave recorded CM Fred Brown’s frustration about the tabled vote: “I’m disappointed in the vice mayor because he has been lobbying for this for the past two months.” CM Kevin Stinnett was particularly upset, citing lost time and cost inflation.

The meeting capped a shocking week. Two days earlier, in council work sessions, at-large CM Richard Moloney had accused CRM Companies, which is run by Lexington Center Board Chairman Craig Turner, of bribing CMs Steve Kay and Kevin Stinnett, along with Mayor Jim Gray, in order to receive the City Hall contract.

At the meeting, Kay was defiant:

I believe the repeated raising of questions that have been answered before and the repeated baseless innuendo that we have heard from Council member Moloney are entirely inappropriate. If he doesn’t like the way things smell, and he has some specifics he’d like to raise, we’d like to hear them.

As it turns out, council member Moloney was not spewing entirely inappropriate and baseless innuendo. The FBI, like Moloney, also didn’t like the way things smelled about the awarding of the City Hall project. They in fact had some specific issues they wanted to raise with a few people associated with the whole business.

A year later, in June of this year, federal officials would indict Timothy Wayne Wellman, a senior officer at CRM and close business associate of Craig Turner, on nine counts related to the breaking of campaign finance laws. With the case of United States of America v. Timothy Wayne Wellman set to commence this week in Frankfort’s U.S. District court, we should begin to learn a little more about just how fishy federal investigators deemed the CRM vote-buying scheme to be.

As a primer to that court coverage—our local Ukrainegate!—here are some key figures and storylines to look out for as our very own Bluegrass political meddling trial gets set to begin.

Who is Timothy Wayne Wellman?

Think of Timothy Wellman as our local Paul Manafort, the indictable go-between for dark and corrupt powers.

The U.S. District case against Wellman alleges that the CRM executive enlisted a dozen “straw contributors” to donate to the political campaigns of two sitting council members, with the hopes that said contributions would sway City Council’s decision to choose his employer CRM’s $150 million proposal for a new city hall.

In order to circumvent campaign finance laws capping individual donations at $2,000, the federal indictment alleges, Wellman reimbursed contributors for donations that he had directed them to make to two local campaigns. He did this by writing checks attributed to a variety of fictional jobs—lawn work, tax help, cleaning services—that were never performed. The indictment cites at least 8 straw contributors who have come forward to corroborate the real reason for their payments. In total, investigators identified 12 straw contributors who made a total of $12,000 in illegal contributions.

As with most crimes of this sort, Wellman is mainly getting charged for the cover-up. The indictment charges him with one count of obstruction and seven counts of pressuring witnesses (the straw contributors) to commit perjury.

Who are Steve Kay and Kevin Stinnett?

Steve Kay and Kevin Stinnett are the two council members who received Wellman’s straw contributor donations. We might think of them as our local William Barrs, high level officials whose access to power and decision-making are seemingly compromised by outside, un-patriotic, forces.

Kay and Stinnett are often described as ideological opposites, but both are Democrats and both have a years-long history of voting in virtual lockstep on issues related to downtown development, often on projects that have directly benefited CRM.

In the case of Vice Mayor Steve Kay, records from the Kentucky Registry of Election Finance show a number of donations made by CRM Companies employees on May 4, 2018. Thomas Nash, $1,000. Buddy Stone, $1,000. Timothy Wellman, $1,000. A total of six CRM employees contributed $1,000 each to Steve Kay’s campaign on that day, three weeks after CRM had submitted its $150 million City Hall proposal to a committee of city employees for scoring.

Unlike the national media’s very visible treatment of the Republican Barr, however, our local media have increasingly eliminated Democrats Kay and Stinnett from their coverage of the Wellman election fraud trial. Of the six articles that comprise Herald Leader coverage thus far, only one (an article otherwise devoted to CRM’s innocence of the charges) cites the council members Kay and Stinnett by name. The rest of their coverage refers to the men obliquely as council members who are not specifically named in the indictment.

The Wellman trial should provide some more detail regarding the level of knowledge both Kay and Stinnett had when they received their thousands of dollars in bundled straw donations.

Who is Craig Turner?

Think of Craig Turner as our local Russian oligarch, a political nihilist but skillful power broker adept at skimming vast profits from the decline of state power. As owner of CRM Companies, his highest profile contract is a re-build of Frankfort’s Capital Plaza. But as chairman of the Lexington Center board, Turner also sits at the center of this city’s development ecosystem, and he has benefited from many of the recent public infrastructure projects voted upon by council.

Three public projects, all located along Lexington’s upscaling Main Street, stand out for attention. In addition to the $150 million contract nearly awarded to CRM for a City Hall at the Eastern end of Main Street, as Chairman of the Lexington Center Turner also benefited from Council’s decisions to fund the $500 million Convention Center expansion on the western edge of Main.

Between these two projects,the $32 million courthouse renovation at Main and Upper led to CRM securing a $30,000 per month security contract from Courthouse manager Holly Wiedeman, who in addition to being a big Jim Gray and Steve Kay donor, also serves on the same Lexington Convention Center board that Turner chairs (as Vice Chair).

Who exactly chose CRM to build the new City Hall?

Local media, following the claims of CM Steve Kay, alleges no council wrongdoing in part because a secret three-person panel of city representatives secretly ranked the four submitted City Hall proposals and chose the winner without input from the Mayor or City Council. In voting for CRM to receive the contract, Kay alleges, he was simply following following the choice made by this panel.

But this assumes that the panel did not include people with ties to the Vice Mayor, the Mayor, or CM Stinnett—or to Turner or the Lexington Center board. And it also minimizes the apparently heavy lifting done by Kay in securing Council consensus to build a new city hall. During the trial, look for prosecutors to describe in greater detail the composition of this panel that scored CRM’s proposal the highest.

When did the federal investigation begin?

Both the Herald Leader and CM Kay have presented the fact that CRM was not ultimately awarded the City Hall contract as evidence that any political meddling by the company or its represenatives was not successful.

Incidentally, this is the same argument used by Donald Trump in the Ukrainegate scandal: there can be no quid pro quo over witholding military aid to Ukraine, Trump has argued, when the aid in fact was not held up. An army of Democrat operatives and an energized media have doggedly pursued holes in this argument, mainly by researching and presenting a timeline that shows Trump delivering military aid only once he found out he was going to be investigated.

But not here. In Lexington, our local media accepts this claim when they are made by Democrats Steve Kay and Kevin Stinnett. Those taking interest in our own local trial of oligarchs meddling in government affairs should look closely at the timeline of the FBI investigation. The indictment refers to this investigation beginning in September 2018. This happens to be the same month that CM Moloney publicly stated that the vote authorizing CRM to build a new city hall had been compromised. But September 2018 is also the month that Steve Kay “shocked the council” with his surprise vote (backed by Mayor Jim Gray) to withdraw support for the CRM proposal.

The lawsuit starting this week may help clarify that murky timeline on the flip-flop. Were the changes of heart by CM Kay and Mayor Gray civically-driven, arrived at after careful consideration? Or were they the result of FBI agents starting to investigate their City Hall deliberations?

The important date to remember here is September 13. If the investigation began before September 13, then we can assume that our local leaders changed their mind, Trump-like, only after learning of an investigation into their shady dealings with the wealthy local oligarch Craig Turner.

Stay tuned to NoC for more coverage and analysis of the CRM affiar as details from the court case emerge.