By Charles Wolfe
The Associated Press
FRANKFORT - Attorney General Ben Chandler has pulled out the biggest club in his bag for use against Bruce Lunsford, his most aggressive rival in the Democratic race for governor.
The club is Vencor, the Louisville-based nursing home and hospital company Lunsford founded and once ran. The issue is what happened to Vencor, and that depends on whose version of events one is hearing.
The Chandler version is that Vencor went bankrupt and Lunsford cashed out before the fall while other investors lost their shirts. Chandler also claims the company was fined $104 million by the federal government for Medicare fraud.
The Lunsford version is that Vencor had financial problems because the government cut reimbursement rates for Medicare and Medicaid. But Vencor was reorganized, not bankrupted. It is in fact "a great success story" because three companies, totaling 50,000 employees, emerged from it. According to Lunsford, Vencor was not fined; it paid to settle the government's fraud charges, never admitting guilt.
A desperate fight for control of the semantics is under way between the two candidates. They have spent the last two weeks swapping accusations of lying, hypocrisy and distortion, and they seem destined to do so until the May 20 primary election.
Control is crucial for Lunsford. His "great success story" has also been his most vulnerable spot since he entered the governor's race and positioned himself to run as an outsider.
It rankles him that the Chandler campaign, in statements and in an attack commercial that recently went on the air uses the adjective "bankrupt" in describing Vencor.
To Lunsford, bankrupt means liquidated, out of business, as happened last year to the book-company empire of former Gov. Wallace Wilkinson.
Vencor was reorganized, which occurs under Chapter 11 of the U.S. bankruptcy code.
"It's not an unusual thing for big companies who grow, to have, as a part of their structure, debt," Lunsford said in an interview. "They do it to keep everybody at bay until they have time to (formulate) a workout."
Lunsford questioned whether Chandler really wants to criticize entrepreneurs who take risk. "He should be encouraging people to take risk and build companies," Lunsford said.
The Chandler camp contends Lunsford has been hypocritical in asserting that Chandler, if elected, would be beholden to the "special interests," among them road contractors for giving money to his campaign.
Lunsford is financing his own campaign from his personal fortune. But he, too, has been a financial contributor to political candidates and causes, having given more than $100,000 since 1997. That may undercut his characterization of Chandler as the exemplar of an "unholy alliance between the career politicians and special interest groups."
At least it gave Chandler an opening for the biggest zinger of the evening when the two shared a stage at a candidate forum on Kentucky Educational Television.
Chandler noted Lunsford's own campaign contributions.
Said Chandler: "It seems to me you are in fact a special interest yourself."
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