Wallace Wilkinson

In April 1985, Wilkinson formed a campaign committee in advance of the 1987 gubernatorial election.[21] Relatively unknown statewide, Wilkinson was the first candidate to enter the race.[21] The Democratic primary field eventually grew to include two previous Kentucky governors, John Y. Brown Jr. and Julian Carroll; sitting Lieutenant Governor Steve Beshear, who would later win two terms as governor in 2007 and 2011; and Grady Stumbo, cabinet secretary for Governor Martha Layne Collins.[4] Early in the race, Brown was the clear-cut favorite, while Wilkinson was picked to finish fifth.[22][23] Wilkinson financed his own campaign and campaign manager Danny Briscoe suggested that he hire a campaign consultant to reach out to the state's large concentration of undecided voters.[4] After a few interviews, Wilkinson hired a then-unknown political consultant named James Carville; Carville later went on to chair Bill Clinton's successful presidential campaign in 1992.[3][4]

Happy Chandler's endorsement boosted Wilkinson's candidacy.

Beshear, considered the second strongest candidate in the primary race, spent much of the campaign attacking Brown, and Brown spent time and resources responding to Beshear's attacks.[24] Meanwhile, Wilkinson attacked all of his opponents in the race as political insiders while touting his own rise from poverty to financial success.[22] He called the incentive package that sitting governor Martha Layne Collins had offered to lure a Toyota manufacturing plant to the state "a massive mistake and terrible deal" that had made Kentucky "an international laughingstock".[23] He also claimed that both Brown and Beshear would raise taxes and proposed a state lottery, which he claimed would generate $70 million annually for the state's coffers, as an alternative to higher taxes.[22][24] The proposal proved particularly popular in Northern Kentucky, where residents routinely traveled to neighboring Ohio to play that state's lottery.[22] Wilkinson also advocated for wholesale education reform, stating that Kentucky's children "don't have a learning problem; they've got a schooling problem."[25] Two-time former governor A. B. "Happy" Chandler gave Wilkinson's campaign further credibility with his endorsement.[3]

In late April, Brown still held a 20 percentage point lead in public opinion polling.[23] However, as Beshear began to slip in the polls, Wilkinson moved up.[23] By Memorial Day weekend, he was polling second among the candidates.[22] Brown largely ignored Wilkinson until a week before the election, when he began running ads questioning the amount of money Wilkinson claimed would be generated by a state lottery.[23] Wilkinson won the primary, garnering 36 percent of the vote to 26 percent for Brown, 18 percent for Beshear, 12 percent for Stumbo, and 6 percent for Carroll.[23] In total, Wilkinson spent a record $4 million during the primary campaign.[22] Kentucky historian Thomas D. Clark opined that Wilkinson's lavish spending during the campaign prompted the legislature to adopt campaign finance reform measures.[3]

Democrats enjoyed a 3-to-1 voter registration advantage in Kentucky, and while he had been the underdog in the primary campaign, Wilkinson became the heavy favorite against the Republican nominee, State Representative John Harper of Shepherdsville.[22] Larry Forgy, who had been groomed for the Republican nomination, unexpectedly dropped out of the race before the primary, leaving the party at a significant disadvantage with a largely unknown and underfunded candidate.[26] While Harper began his general election campaign immediately, Wilkinson made few public appearances – except for fundraisers – until the second week in September.[27] He also refused to endorse the $125 million education reform measure that sitting governor Martha Layne Collins had guided through the legislature in 1985, which cost him the endorsement of the Kentucky Education Association.[28] The association endorsed Harper, marking the first time in its history it had endorsed a Republican gubernatorial candidate, but endorsed Brereton Jones, the Democratic candidate for lieutenant governor.[29]

Harper attacked Wilkinson's lottery proposal as "Alice in Wonderland" economics.[22] In addition, Harper's campaign raised a number of ethical issues with regard to Wilkinson's business dealings.[30] Gary Stafford, Wilkinson's brother-in-law who was serving as president of Wallace's Book Store, pleaded guilty to illegal wiretapping and rolling back the odometers on company vehicles.[30] The company was also forced to pay $44,641 in back taxes.[30] Further, Republican state chairman Bob Gable questioned whether Wilkinson had helped Italian businessmen circumvent laws that made it difficult to export Italian currency by disguising real estate ventures as legitimate business transactions with Jernigan Export Timber.[31] Gable also hired a private investigator who determined that there was "substantial reason" to suspect that foul play was involved in the death of Wilkinson's business partner, Jerome Jernigan.[30] Despite Gable's allegations and the investigator's findings, Lexington police officials said they saw no reason to reopen the investigation.[32] Harper was at a substantial fundraising disadvantage, raising only $225,000 for the entire campaign compared to Wilkinson's $8 million.[33] This left him unable to purchase enough media time to solidify any of the ethical questions about Wilkinson in the voters' minds.[26] Wilkinson's campaign also delved into Harper's personal life, admitting that it tipped off the media about Harper's son, who had been shot to death in an attempted burglary.[34]

In the general election, Wilkinson defeated Harper by a vote of 504,674 to 273,141.[7] By capturing 65% of the vote, he broke Julian Carroll's record of 62.8%.[33] Low voter turnout prohibited him from setting the record for most votes received by a candidate in a Kentucky gubernatorial election, and he received several thousand fewer votes than Brereton Jones, the victorious Democratic candidate for lieutenant governor.[33] He carried 115 of Kentucky's 120 counties – besting Carroll's old record of 99 – but lost in Fayette, his county of residence.[33] A poll conducted by a Louisville television station after the election showed that 76% of voters wished they had another candidate to vote for.[26]

Even before he officially took office, some of Wilkinson's public comments set up an adversarial relationship with the General Assembly. Just two days after his election, he told reporters that he would exert the "full power" of his office toward getting his agenda approved by the legislature and that he "conceive of a situation" where he would use his political action committee (PAC), Kentuckians for a Better Future, to help defeat legislators who opposed him.[35] Under governors Brown and Collins, the legislature had become increasingly independent of the governor, and Lexington Herald-Leader reporters opined that House Speaker Don Blandford and Senate President Pro Tem John "Eck" Rose would be reluctant to cede power back to the chief executive.[35] During the 1988 legislative session, Rose introduced a bill setting a limit of $4,000 on the amount PACs could contribute to an individual's campaigns during a single election and a limit of $2,000 on the amount any individual could contribute to a single PAC in a given election.[36] A month later, Wilkinson recanted, saying he "misspoke" and only intended to use his PAC to promote passage of the lottery amendment.[37] Despite the governor's promise, the legislature passed Rose's bill.[36]

Tensions also developed between Wilkinson and Lieutenant Governor-Elect Jones soon after the election.[38] During the campaign, Jones was quoted as saying that he had talked with Wilkinson about being more open with the press and said that, if elected, he would not be a "yes man" for Wilkinson.[38] At a press conference shortly after the election, Wilkinson said he did not know what role Jones would play in his administration and that much of it would depend on what Jones had meant when he said he did not agree with all of Wilkinson's positions.[38] In late November 1987, Wilkinson announced that Jones would spearhead the promotion of the administration's agricultural agenda.[39] The Lexington Herald-Leader reported that this would not be Jones' primary role in the administration but that no other specifics had been provided.[39]

Although amendments removing Kentucky's constitutional prohibition on a state lottery had been introduced in every legislative session since the mid-1970s, Wilkinson's election provided the issue with fresh momentum, and the General Assembly passed the amendment by the required majorities in the 1988 session.[40][41] Another amendment passed during Wilkinson's term required landowner approval before strip mining could occur on a piece of property.[41] This amendment essentially overturned a 1956 court ruling and negated the practice of issuing broad form deeds which allowed property owners to sell their mineral rights while retaining ownership of structures and other improvements above-ground.[41] A third amendment for which Wilkinson advocated would have allowed elected state officials to succeed themselves in office.[7] During his gubernatorial campaign, he insisted that he would not seek to have such an amendment apply to himself, but shortly after his election, he reversed course and insisted on an amendment that did not exclude present incumbents.[42] The amendment became one of Wilkinson's top priorities in the 1988 legislative session, and he threatened to work against legislators who opposed it.[42] Legislators proposed that a succession amendment include provisions to lengthen the terms of state legislators to maintain a balance of power between the executive and legislative branches; Wilkinson insisted that the General Assembly pass a "clean" succession amendment, free from any other provisions that might diminish the amendment's chances of being approved by the state's voters.[42] The Kentucky House of Representatives passed such an amendment, but the state Senate continued to press for legislative concessions, proposing annual legislative sessions and mandatory runoffs in gubernatorial primaries when one candidate did not receive a majority of the votes cast.[42] When Wilkinson rejected both proposals, Senate leaders refused to bring the amendment to the floor for a vote.[42] Wilkinson's reversal on his campaign promise not to seek succession for present incumbents damaged his reputation.[3]

Wilkinson's advocacy for the amendment further damaged his relationship with Lieutenant Governor Jones because Jones had already announced his intention to run for governor in 1991.[43] After the session, Jones told a crowd in Owensboro that if Wilkinson called a special session to insist that legislators pass his educational agenda, that the General Assembly would probably "throw it back in his face".[43] In response, Wilkinson said that Jones should "be involved in improving the process, not be so negative about everything" and "pay attention to his own business".[43] A Lexington Herald-Leader story noted that a promised news conference to elaborate on Jones' role in the administration had not yet happened and that "[m]ost observers expect it never will".[43] The two men's relationship continued to be strained throughout their terms; Jones later described it as "terrible".[44]

Leaders of the Southern Baptists and United Methodists led opposition to the amendment during Wilkinson's administration, activating the Coalition Against a State Lottery.[40] Despite the opposition, Kentucky voters approved the lottery amendment by a vote of 694,577 to 446,937 in the November 1988 elections.[45] Days after the election, Wilkinson signed a proclamation calling a special legislative session to begin November 28 to pass legislation to implement the lottery.[46] The call instructed the legislature to consider a bill based on the recommendations of Wilkinson's lottery commission.[46] The recommendations included the establishment of a lottery board whose president and members would be appointed by the governor and could only be removed by the governor, and earmarked the first year's proceeds to be split evenly between early childhood education programs, programs for the elderly, and a one-time bonus to veterans of the Vietnam War.[46] Legislators insisted on more legislative control of the lottery and did not favor explicit earmarks for the proceeds, preferring to allocate them in the 1990 legislative session.[46] They also objected to the lottery board's exemption from open records and open meetings laws.[46]

Immediately after the session convened, Democratic leadership in both houses of the General Assembly announced they would not support earmarking lottery funds, but would let them accumulate in escrow until the 1990 legislative session.[45] On December 14, legislators adjourned the session after passing a bill that created an eight-member lottery board, headed by a president appointed by the governor and confirmed by the other seven members.[47] The other seven members of the board would serve staggered terms, would be appointed by the governor, and be confirmed by the Senate.[47] The legislation also escrowed proceeds until the 1990 General Assembly and specified that the first expenditures from those proceeds would fund a one-time bonus to veterans of the Vietnam War.[45] The vote on the legislation was 32–5 in the Senate and 92–6 in the House.[47] Several Republican amendments, including one by Senator David L. Williams to implement a local option for counties to decide whether or not to sell lottery tickets, were defeated on party-line votes.[47] While the legislation did not implement all of Wilkinson's proposals for the lottery, he nonetheless praised it as a "very good" bill.[47]

A lawsuit to reform Kentucky's educational system began under Wilkinson's predecessor, Martha Layne Collins

On May 31, 1988, Franklin County circuit court judge Ray Corns issued a ruling in the case of Council for Better Education v. Collins, et al. stating that Kentucky's system of school financing was unconstitutional.[48] The suit was brought against Wilkinson's predecessor, Martha Layne Collins, and several members of the state government by a group of poor school districts as a means to equalize funding for all the state's school districts. An advocate for education, Wilkinson dropped the governor's office's defense in the suit and joined the plaintiffs when Corns' decision was appealed to the Kentucky Supreme Court.[49] On appeal, the Supreme Court declared Kentucky's entire public school system unconstitutional and mandated that the legislature reform it.[7]

Although state legislators maintained that reforming the public school system was too large an issue to tackle during the 60-day legislative session of 1990 and requested that Wilkinson call a special legislative session in June 1990 to consider the issue, the governor insisted that the issue be resolved during the regular session and said that he would not allow consideration of tax increases to fund improvements in the system if he had to call a special session.[50] Wilkinson presented a budget proposal to the General Assembly that contained measures increasing taxes on cigarettes and corporations and eliminating sales tax exemptions on legal, engineering, and advertising services.[51] Legislators favored raising the sales tax to six percent instead.[7] For much of the legislative session, Wilkinson remained steadfastly opposed to an increased sales tax, repeatedly calling it a "dead issue" and threatening to veto it.[52] Then on March 9, 1990, Wilkinson announced that he would drop his opposition to the tax in exchange for the Assembly's approval of a $600 million bond issue to finance road improvements he had promised during the campaign.[7][52] The Lexington Herald-Leader called the move "a stunning reversal" and noted that Wilkinson would not comment on why he changed his mind.[52] With the impasse between the legislature and Wilkinson resolved, House Speaker Don Blandford announced that the remainder of the session would focus only on approving the state budget and passing the court-mandated education reforms; any bills still in committees would not be brought to a vote, he said.[53] On April 11, 1990, the Assembly passed the Kentucky Education Reform Act (KERA) to comply with the Supreme Court's decision.[54] Besides increasing funding for schools, it mandated high performance measures and held schools accountable for meeting them.[25] Educators hailed the legislation as being among the nation's best education reform plans.[7]

Even after KERA was passed, disagreements between Wilkinson and the legislature continued. The $600 million bond issue for road construction that had been the price for Wilkinson's support of the sales tax was modified to include language that allowed the legislature to determine where the roads were constructed.[55] Wilkinson threatened to veto the measure, claiming he did not need the General Assembly's approval to issue the bonds, but ultimately, he chose to allow it to become law without his signature.[55] Wilkinson vetoed 21 bills passed by the legislature, but 13 of those vetoes were overridden; it was the most gubernatorial vetoes overridden in a single session in modern times.[56] Most of the overridden vetoes were on bills strengthening the legislative branch relative to the executive branch.[56] The General Assembly also voted to send two proposed constitutional amendments that strengthened the legislative branch relative to the executive to voters for ratification.[57] One allowed the legislature to call itself into session – a power constitutionally reserved for the governor – if two-thirds of its members signed a petition to do so.[57] The other allowed a committee of legislators to suspend regulations enacted by the executive branch between legislative sessions until the full legislature re-convened.[57] Through his political action committee, Wilkinson opposed both measures, and both were rejected by the state's voters in the November 1990 elections.[57][58]

The political debates and posturing leading up to the passing of KERA also permanently breached the relationship between Wilkinson and Lieutenant Governor Jones. During a teachers' rally in Frankfort, Jones was sympathetic to their demands for more money for education than Wilkinson was supporting.[44] Jones wanted to speak to the crowd that had gathered outside the Capitol.[44] While in the governor's office, Wilkinson told Jones that if he spoke to the crowd, he should never "step foot [sic] in this office again."[44] Jones defied Wilkinson by speaking to the teachers and, according to Penny Miller, editor of Jones' public papers, never again entered Wilkinson's office.[44]

Wilkinson also helped to advance economic development in the state. During his tenure, Delta Air Lines nearly doubled the number of people it employed at the Cincinnati/Northern Kentucky International Airport; Wilkinson secured Delta's expansion by agreeing to limit the company's sales tax liability on jet fuel to $4 million annually.[59] Additionally, Scott Paper Company opened a plant near Owensboro and North American Stainless, a Spanish-owned steel company, located a plant near Carrollton.[25] During his term in office, Wilkinson served on the Education Commission of the States, the Southern Growth Policies Board, and the Council of the State Governments and the Southern States Energy Board.[6] He was elected chair of the Southern Governors' Association in 1990 and served on the Education Commission of the States' Policy and Priorities Committee.[6][60]

The Wilkinson administration was dogged by ethical questions that eventually resulted in prosecution of some members. Before being elected governor, Wilkinson asked the Kentucky attorney general to rule on his ownership of the Holiday Inn Capital Plaza Hotel in Frankfort. The ruling stated that he should sell the hotel, and in November 1987, Kentucky Central Life Insurance, a state-regulated company, purchased the property for $12 million, which included $8.2 million of debt.[61] Kentucky Central became insolvent in 1994 and was ordered into liquidation. The following year, Kentucky Insurance Commissioner George Nichols III assumed the liquidation and brought suit against Wilkinson stating that the property was only worth $6 million.[62] Franklin County Circuit Judge Earl O'Bannon dismissed the lawsuit on the grounds that Wilkinson had not knowingly participated in Kentucky Central's breach of financial responsibility, even though it had, in his words, an "odor of politics."[62]

Further, an FBI (Operation Boptrot) investigation of the Kentucky General Assembly led to Wilkinson's nephew, Bruce N. Wilkinson, who served as his appointment secretary. Bruce Wilkinson was convicted of extortion, fined $20,000, and sentenced to three years in prison.[3] Wallace Wilkinson was investigated by a grand jury but never indicted.[25] He vehemently denied any wrongdoing.[25]

In 1990, Wilkinson's wife, Martha, announced that she would seek the Democratic gubernatorial nomination in 1991.[63] The move was widely seen as a surrogate candidacy so that her husband could continue his administration for a second consecutive term.[63] Her challengers included Lieutenant Governor Jones, Lexington mayor Scotty Baesler, and Dr. Floyd G. Poore, the former Kentucky highway director. With polls consistently showing little support for her candidacy, Mrs. Wilkinson dropped out of the race in May 1991.[63] Earlier in the year, Wallace Wilkinson was diagnosed with limited-stage Non-Hodgkin lymphoma.[3] This diagnosis was also a factor in Ms. Wilkinson's withdrawal from the race.[63] Wallace underwent surgery at the Mayo Clinic in Rochester, Minnesota, then received radiation therapy at the University of Kentucky.[25] These treatments eliminated all signs of the disease by 1993, and doctors gave Wilkinson an excellent chance of recovery.[3][25]

As Wilkinson's term ended, he appointed himself to a six-year term on the University of Kentucky's board of regents.[3] The move was unprecedented, and was particularly controversial because of Wilkinson's open feuds with Charles T. Wethington Jr., the university president.[63] An incensed legislature passed a law shortly thereafter that dissolved the existing boards of trustees at all Kentucky public colleges and universities and mandated that they be reconstituted by allowing the governor to select each member from a list of three candidates recommended by an independent review board.[3][64] Jones, who succeeded Wilkinson as governor, used the provisions of the law to remove Wilkinson and several of his appointees from the university boards.[3]

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