Ernie Fletcher

Throughout Fletcher's term, the Kentucky Senate was controlled by Republicans, while Democrats held a majority in the state House of Representatives. Consequently, Fletcher had difficulty getting legislation enacted in the General Assembly. Early in the 2004 legislative session, he presented a plan for tax reform that he claimed was "revenue neutral" and would "modernize" the state tax code.[22] The plan was drafted with input from seven Democratic legislators in the House, none of them in leadership roles, leading to claims that Fletcher was trying to circumvent House leadership.[23] As the session wore on, Republicans insisted on tying the tax reform package to the proposed state budget, while Democrats wanted to vote on the measures separately.[22] Despite last minute attempts at a compromise as the session drew to a close, the Assembly passed neither the tax reform package nor a state budget.[22] The contentious session ended with only a few accomplishments, including passage of a fetal homicide law, an anti-price gouging measure, and a law barring the state public service commission from regulating broadband Internet providers beyond what restrictions were put in place by the Federal Communications Commission.[24]

The 2004 session marked the second consecutive session in which the General Assembly had failed to pass a biennial budget; the first occurred in 2002 under Governor Patton.[22] When the fiscal year ended without a budget in place, responsibility for state expenditures fell to Fletcher.[25] As it had been in 2002, spending was governed by an executive spending plan created by the governor.[25] Democratic Attorney General Greg Stumbo filed suit asking for a determination on the extent of Fletcher's ability to spend without legislative approval.[25] A similar suit, filed after the 2002 session ended in deadlock, was rendered moot when the legislature passed a budget in a special session prior to the conclusion of the lawsuit.[25] A judicial review by a Franklin County circuit court judge approved Fletcher's spending plan but forbade spending on new capital projects and programs.[25] In late December 2004, a judge ruled that Fletcher's plan could continue to govern spending until the end of the fiscal year on June 30, 2005, but "thereafter" executive spending was to be limited to "funds demonstrated to be for limited and specific essential services."[26]

On May 19, 2005, the Kentucky Supreme Court issued a 4–3 decision stating that the General Assembly had acted unconstitutionally by not passing a budget and that Fletcher had acted outside his constitutional authority by spending money not specifically appropriated by the legislature. The majority opinion rejected the lower court's exception for "specific essential services", saying "If the legislative department fails to appropriate funds deemed sufficient to operate the executive department at a desired level of services, the executive department must serve the citizenry as best it can with what it is given. If the citizenry deems those services insufficient, it will exercise its own constitutional power – the ballot."[27] Chief Justice Joseph Lambert dissented, claiming the executive spending plan was necessary. Two other justices, in a separate opinion, disagreed with the majority that federal and state constitutional mandates should still be funded in the absence of a budget. In their dissent, they argued that the threat of a government shutdown would act as an impetus for the General Assembly to engage in timely budget-making. The decision took no retroactive steps to change the actions it ruled unconstitutional, but it served as a precedent for any future cases of budgetary gridlock.[27]

In June 2004, Fletcher's aircraft caused a security scare that triggered a brief evacuation of the U.S. Capitol and Supreme Court building.[28] Shortly after takeoff en route to memorial services for former president Ronald Reagan, the transponder on Fletcher's plane malfunctioned, leading officials at Reagan National Airport to report an unauthorized aircraft entering restricted airspace.[28] Two F-15 fighters were dispatched to investigate, and Fletcher's plane was escorted to its destination by two Blackhawk helicopters.[28] The plane, a 33-year-old Beechcraft King Air, was the oldest of its model still in operation.[28] An investigation by the Federal Aviation Administration (FAA) found that the crew of Fletcher's plane maintained radio contact with air traffic officials and received clearance to enter the restricted air space.[29] The investigation determined that miscommunication by air traffic controllers sparked the panic, and in the aftermath of the incident, the FAA adopted policies to prevent future errors of a similar nature.[29]

Jay Leno's jokes about Fletcher's effort to create a brand for Kentucky prompted an appearance by Fletcher on The Tonight Show

In July 2004, Fletcher announced a plan to unify the state's branding to improve its public perception.[30] Shortly after the announcement, late-night comedians Craig Kilborn and Jay Leno made some tongue-in-cheek suggestions for the new slogan on The Late Late Show and The Tonight Show, respectively.[30] In response, Fletcher wrote a letter to both comedians taking exception to the jokes and was invited to appear on both programs.[30] Citing Leno's larger audience and earlier time slot, Fletcher agreed to appear on The Tonight Show, where he presented Leno with a Louisville Slugger baseball bat and traded jocular barbs about the relative advantages of Kentucky and Los Angeles where The Tonight Show is taped.[31] Eventually, four slogans were chosen to be voted on online as well as at interstate travel centers.[32] In December 2004, "Kentucky: Unbridled Spirit" was chosen as the winning slogan and was printed on road signs, state documents, and souvenirs.[32] A 2007 study determined that 88.9% of Kentuckians could correctly identify the slogan and its logo.[33] Further, 64% of those surveyed across a ten-state region recognized the slogan and logo, higher than any other brand tested in the study.[33]

In the second half of 2004, Fletcher proposed changes to the health benefits of state workers and retirees. Fletcher's plan provided discounts for members who engaged in healthier behavior, which he called a transition from a sickness initiative to a wellness initiative.[34] Acknowledging that out-of-pocket expenses would rise, Fletcher proposed a 1% salary increase to offset the additional costs.[34] State employees, particularly public school teachers, broadly opposed Fletcher's plan, and the Kentucky Educators Association called for an indefinite strike, to begin October 27, 2004.[34] To address the opposition, Fletcher called a special session of the legislature to begin October 5, 2004.[34] Although the state was still operating under an executive spending plan, Fletcher did not include the budget or his tax reform proposal in the session's agenda, a move praised by both parties, allowing them to focus only on concerns over the health plan.[34] In a fifteen-day session, the General Assembly passed a plan that allocated $190 million more to health insurance for state workers and restored many of the most popular benefits in the previous insurance plan.[35] Immediately after the session adjourned, the Kentucky Educators Association voted to cancel their proposed strike.[35]

On November 8, 2004, Fletcher signed a death warrant for Thomas Clyde Bowling, who was convicted of a double murder in 1990 and sentenced to death by lethal injection.[36] A group of doctors requested an investigation by the Kentucky Board of Medical Licensure to determine whether Fletcher's medical license should be revoked for that action.[36] Kentucky requires doctors to follow the guidelines of the American Medical Association, which forbid doctors from participating in an execution.[36] On January 13, 2005, the Board of Medical Licensure found that Fletcher was acting in his capacity as governor, not as a doctor, when he signed the warrant and ruled that his license was not subject to forfeiture by that action.[37]

During the General Assembly's 2005 session, Fletcher again proposed his tax reform plan, and late in the session, both houses passed it.[38] The plan raised sin taxes on cigarettes and alcohol, as well as upping taxes on satellite television service and motel rooms.[39] Businesses were also subjected to a gross receipts tax.[39] In exchange, corporate taxes were lowered, as were income taxes for individuals who earned less than $75,000 annually; 300,000 low-wage earners were dropped from the income tax rolls altogether.[39] The Assembly also passed a budget for the remainder of the biennium, abolished the state's public campaign finance laws, and passed new school nutrition guidelines.[38]

Fletcher with U.S. Secretary of Education Margaret Spellings in 2005

In May 2005, Attorney General Stumbo began an investigation of allegations that the Fletcher administration circumvented the state merit system for hiring, promoting, demoting and firing state employees by basing decisions on employees' political loyalties.[40] The investigation was prompted by a 276-page complaint filed by Douglas W. Doerting, the assistant personnel director for the Kentucky Transportation Cabinet.[40] Fletcher, who was on a trade mission in Japan when news of the investigation broke, conceded via telephone news conference that his office may have made "mistakes" with regard to hiring that stemmed from not having a formal process for handling employment recommendations.[41] Upon his return from Japan, Fletcher denied that the "mistakes" by his administration were illegal and called the investigation by Stumbo "the beginning of the 2007 governor's race", an allusion to Stumbo's potential candidacy in 2007.[41] Stumbo denied any plans to run for governor in 2007, although he eventually became gubernatorial candidate Bruce Lunsford's running mate in the election, losing in the Democratic primary.[41]

A grand jury was empaneled in June 2005 to investigate the charges against Fletcher's administration. By August, the jury had returned indictments against nine administration officials, including state Republican Party chairman Darrell Brock Jr. and acting Transportation Secretary Bill Nighbert.[42] All of the indictments were for misdemeanors such as conspiracy except those against Administrative Services Commissioner Dan Druen, who was charged with 22 felonies (20 counts of physical evidence tampering and 2 counts of witness tampering) in addition to 13 misdemeanors.[42] On August 29, Fletcher granted pardons to the nine indicted administration officials and issued a blanket pardon for "any and all persons who have committed, or may be accused of committing, any offense" with regard to the investigation.[43] Fletcher exempted himself from the blanket pardon.[43] The next day, Fletcher was called to testify before the grand jury, but refused to answer any questions, invoking his Fifth Amendment right against self-incrimination.[44]

In mid-September, after Fletcher issued the pardons, a Courier-Journal poll found Fletcher's approval rating at 38 percent, tying the lowest rating reached by his predecessor, Paul E. Patton, during the sex scandal that tarnished his administration.[45] On September 14, 2005, Fletcher fired nine employees, including four of the nine he pardoned two weeks earlier.[46] The firings were praised by Fletcher critic Charles Wells of the Kentucky Association of State Employees, who said: "When all else fails, the governor did the right thing."[46] However, Democratic state senator and former governor Julian Carroll criticized Fletcher for not firing the indicted officials when he issued the pardons.[46] Fletcher also called for the firing of state Republican Party chair Darrell Brock, Jr. due to Brock's role in the merit scandal.[46] The state Republican executive committee met on September 17, but did not act on Fletcher's call to fire Brock.[47]

The grand jury continued its investigation, issuing five more indictments after Fletcher issued his blanket pardon.[48] Two were returned against members of Fletcher's staff, and two were against unpaid advisors to Fletcher.[48] The fifth was issued against Acting Secretary Nighbert for retaliation against a whistleblower.[48] Only the additional charge against Nighbert was alleged to have occurred after Fletcher issued the pardon.[48] On October 24, 2005, Fletcher filed a motion asking Franklin Circuit Court Judge William Graham to order the grand jury to stop issuing indictments for offenses that occurred prior to the blanket pardon; only the names of indicted officials could be included in the jury's final report.[48] On November 16, Graham ruled that the grand jury could continue issuing indictments, but in a separate ruling, dismissed the indictments against Fletcher's staff and volunteer advisors on grounds that they were covered by the pardon.[48] Graham did not rule on the latest indictment against Nighbert.[48] The Kentucky Court of Appeals affirmed Graham's ruling on December 16.[49] Immediately after the Court of Appeals' ruling, Fletcher announced his intent to appeal the ruling to the Kentucky Supreme Court.[49]

On February 12, 2006, shortly after the beginning of the General Assembly's legislative session, Fletcher was hospitalized with abdominal pain.[50] Doctors at St. Joseph East hospital in Lexington found a gallstone in his common bile duct and also diagnosed him with an inflamed pancreas and gallbladder disease.[50] After surgery to remove the gallbladder, Fletcher developed a blood infection that slowed his recovery, but was discharged from the hospital on March 1.[50] Days later, he returned to St. Joseph's with a blood clot which had to be dissolved, resulting in another five-day stay in the hospital.[51] Fletcher staffers insisted that his absence did not have a negative impact on his ability to get legislation passed during the session.[52] A right-to-work law and a repeal of the state's prevailing wage law – both advocated by Fletcher – failed early in the session, but both had been considered unlikely to pass before the session started.[52] Among the bills that did pass the session were a mandatory seat belt law, a law requiring children under 16 years old to wear a helmet when operating an all-terrain vehicle, and legislation allowing the Ten Commandments to be posted on Capitol grounds in a historical context.[53]

The Assembly passed a biennial budget, but did not allow enough time in the session to reconvene and potentially override any of Fletcher's vetoes.[54] In an attempt to avoid "excessive debt", Fletcher used his line-item veto to trim $370 million in projects from the budget passed by the Assembly.[54] Although falling far short of his initial prediction of vetoing $938 million, Fletcher used the line-item veto more than any other governor in state history.[54] One project not vetoed by Fletcher was $11 million for the University of the Cumberlands to build a pharmacy school.[54] LGBT rights groups had asked Fletcher to veto the funds because the university, a private Baptist school, had expelled a student for being openly gay.[55]

One of Fletcher's priorities that was not resolved during the session was the correction of unintended tax increases on businesses that resulted from the tax reform plan passed in 2005. Fletcher called a special legislative session for mid-June so that the legislature could amend the plan and also authorize tax breaks designed to lure a proposed FutureGen power plant to Henderson. Republican Senate President David L. Williams asked Fletcher to include tax breaks for other businesses as well, but Fletcher insisted on a sparse legislative agenda. The session convened for five days and passed the tax breaks and amended tax reform plan unanimously in both houses. Fletcher applauded the legislature's efficiency.[56]

As the Kentucky Supreme Court prepared to hear Fletcher's appeal on whether the grand jury could continue to indict people covered by his blanket pardon, two of the court's seven justices recused themselves from the case, citing conflicts of interest.[57] Kentucky's constitution provides that, in the case of more than one recusal on the court, the governor is to appoint special justices to replace them.[57] Accordingly, Fletcher named two replacements, but one of those – Circuit Judge Jeffrey Burdette – declined to serve on grounds that he had contributed to Fletcher's 2003 gubernatorial campaign.[57] Fletcher then named another special justice to replace Burdette, consistent with a precedent set by former Democratic Governor Brereton Jones.[57] Stumbo challenged this third appointment, claiming that Burdette's refusal to serve created only one vacancy on the court, and that the case could be tried with six justices.[58] The Kentucky Supreme Court sustained Stumbo's complaint.[58] In a 4–2 ruling issued May 18, 2006, the Kentucky Supreme Court barred the grand jury from issuing further indictments against individuals covered by Fletcher's blanket pardon, reversing the Court of Appeals.[59] The ruling did not affect indictments for crimes allegedly committed after the pardon was issued.[59] The Supreme Court also held that the grand jury could issue a general report of its findings at the conclusion of its investigation, but left open the question of whether the names of unindicted individuals could appear in the report.[59] A later decision by the Court of Appeals found that unindicted individuals could not be named in the report.[60]

Just prior to the Supreme Court's ruling, the grand jury handed down indictments against Fletcher for three misdemeanors – conspiracy, official misconduct, and political discrimination.[61] Fletcher did not appear at his arraignment on June 9 because he was on vacation in Florida; his attorney entered "not guilty" pleas to all three charges on his behalf.[61] On August 11, 2006, Special Judge David E. Melcher ruled that because the personnel violations were allegedly committed while Fletcher was acting in his official capacity as governor, he was protected by executive immunity and could not be prosecuted until he left office.[62] Melcher asked that the two sides work together to reach a settlement in the case.[63] On August 24, Fletcher and Stumbo announced such an agreement.[63] Under the settlement, Fletcher acknowledged that evidence "strongly indicate[d] wrongdoing by his administration" but did not admit any wrongdoing personally.[63] Fletcher also acknowledged that Stumbo's prosecution of the case "[was a] necessary and proper [exercise] of his constitutional duty" and ensured that abuses of the merit system would be ended.[63] In addition to dropping the charges against Fletcher, Stumbo conceded that any violations by Fletcher's administration were "without malice".[63] Four members of the state Personnel Board who were appointed by Fletcher were required to step down.[63] Their replacements would be chosen by Fletcher from a list provided by Stumbo.[63]

The grand jury issued its report on the investigation in October 2006, and a judge ordered it released to the public on November 16. The report categorized the Fletcher administration's actions as "a widespread and coordinated plan to violate merit hiring laws." It charged that "This investigation was not about a few people here and there who made some mistakes as Governor Ernie Fletcher had claimed," and lamented that the blanket pardon issued by Fletcher, coupled with Fletcher taking the Fifth, made it "difficult to get to the bottom of the facts of this case....As a result, [the grand jury was] in part forced to rely on documentary evidence to piece together the facts of the case." Fletcher opined that the allegations in the report were inconsistent with his settlement with Stumbo, which acknowledged that Fletcher's administration acted "without malice."[64]