Saturday, August 16, 2008

The Unbridled Business Climate

The Unbridled Business Climate

Who is the man that would risk his neck
for his brother man?

-Isaac Hayes

Government regulations assure that businesses play by the rules.

I’m wondering what rules some Kentucky businesses are playing by.

The state’s “Unbridled Spirit” slogan is starting to look like “anything goes.”

A few weeks ago, Mark Hebert at WHAS TV, broke a story about nursing home “watchdog” Moses Young. Until recently, Young had been the number two nursing home regulator for the state of Kentucky. He lives in a condominium owned by a nursing home owner that he regulated!

Young has been living, allegedly rent free; in a $175,000 condo owned by Ralph Stacey Jr. Stacey owns the Garrard Convalescent Center in Covington.

Of the millions of landlords in the world, Young found one who needed his blessing to stay in business.

It’s like a DEA agent renting from a drug dealer.

Young claims he paid Stacey $1300 a month in cash. He showed Hebert “receipts” for the cash payments. If Young is telling the truth, Stacey has a problem. The IRS will want to know if Stacey has been reporting the cash on his income taxes.

Young called Stacey 427 times on a cell phone supplied by the taxpayers of Kentucky.
I’d love to know what they were talking about.

After the nursing home story saga, an even bigger story broke.

On August 9, The Louisville Courier Journal and Corbin Times Tribune separately reported about an affidavit submitted to federal court by an FBI agent. It alleged that a rich and powerful contractor gave cash payments to a state transportation employee to get inside information about bids. .

If the allegations are true, what kind of signals are the regulators sending to the people they regulate? How could businessmen think they could get away with something so egregious?

Growing up in an environment where illegal activity took place, I got to watch the process of corruption.

It usually started at small levels. Business people would buy lunch for a public official or get them tickets to a sporting event. It then escalated to dinner and a free trip to Florida.

Buying condos and handing cash to state employees are completely over the line. Businessmen don’t do something that bold unless they don’t think it’s possible to get caught.

There is a good reason why businesspeople normally don’t bribe public officials. They are afraid of going to jail

If you are handing out bundles of cash, the fear of jail is not on your radar.

People must believe that Kentucky is “open for business” in a variety of different ways.

Take the case of the nursing home owner. There is no question that he owned the condo Young lived in. There is no question that Young made 427 calls to Stacey on a state cell phone.

The question is whether Young paid rent on the condo and if Stacey was tipped off before his nursing home was inspected. Those are questions that the Kentucky Attorney General and FBI need to find answers to.

The fact that the nursing home owner and Young, never thought their arrangement was questionable makes me wonder why kind of world they are living in.

427 calls seem outlandish. I can’t imagine that Young did anything all day, other than talk to Stacey.

Young got the condo in 2005. He was terminated in 2008. People that worked with Young should have seen something or said something. No one in that department was going to risk their neck for fellow man.

When the transportation allegation broke, one charge made little sense. It alleged that the contractor was personally giving the government employee cash packages.

The book, The Godfather, (and also the movie Godfather II) goes into great detail about how a Mafia king has “buffers” between themselves and people they were trying to bribe. The Godfather did not personally hand out cash; it was done at his behest.

If the allegation is true and the multi millionaire was giving out cash directly, you have to wonder how long the practice had been going on and how comfortable he was with it.

Businesses want a line between no regulation and too much regulation. Too much regulation strangles industry. No regulation means government like a banana republic. In a no regulation environment, your connections mean everything. Initiative and talent mean nothing.

I wonder about the degree of regulation if the people who protecting us are allegedly being furnished with nice condominiums and cash.

If the stories turn out to be true, Kentucky is operating in an unbridled business climate.

Don McNay is the author of the Unbridled World of Ernie Fletcher & Son of a Son of a Gambler. You can write to him at or read his award winning column at

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