Jack Segell, ex-Kentucky commerce chief, dies at 80

University ethics reforms studied

Courier-Journal
October 17, 2003

Jack Segell, ex-Kentucky commerce chief, dies at 80

"I think he's somebody who was a success and made a lot of money very early and spent the rest of his life trying to give back," said Denis Fleming, who cited Segell as his mentor. Fleming is chief legal counsel to Gov. Paul Patton.

Segell was co-founder and president of the retail chain GES Stores in Cincinnati, which later expanded into Louisville and Birmingham, Ala. After GES was sold to National Industries, Segell moved to Louisville and worked as a group vice president for National Industries from 1975 to 1978.

National Industries was later acquired by Fuqua Industries. The company offered Segell an executive position in Atlanta, but he refused to leave his adopted state of Kentucky.

Since his appointment as commerce secretary by Gov. John Y. Brown Jr. in 1980, Segell had been an adviser to five governors, a variety of industry leaders, university presidents and many business leaders whom he mentored, Fleming said.

"Jack always had a real ethical center to him. He always knew what was right and what was wrong, and I think he was really respected for that," Fleming said.

Louisville Metro Mayor Jerry Abramson counted himself among those who valued Segell's advice. "Jack Segell defined the word citizen. He was one of the most involved community-minded people I've ever known," Abramson said yesterday.

Segell still ran his consulting business, the Jack H. Segell Corp. He was a member of the board of Jewish Hospital and was vice chairman of Jefferson Riverport International industrial park. He served on the board of the Louisville Water Co. and was chairman of the board of Jefferson Community College.

A native of St. Joseph, Mo., and business graduate of the University of Missouri, Segell had also been president of Mayfair Manufacturing Co. and National Recreation Products Inc. He was also a former executive of Chicago-based TSC Industries Inc.

Herman Meyer & Son Funeral Home is handling arrangements.

Courier-Journal
October 17, 2003

University ethics reforms studied
State commission may push rules for presidents, others

The Kentucky ethics commission is considering a package of reforms that would subject university presidents to the state's ethics code for the first time and prohibit university trustees from doing business with the schools they serve.

The proposals, which the Executive Branch Ethics Commission is scheduled to take up tomorrow and which would require General Assembly approval, come in the wake of ethical questions surrounding former University of Louisville President John Shumaker.

"It does not serve as the impetus for what we're recommending," Joseph B. Helm, commission chairman, said of Shumaker's behavior. "It serves as such a graphic illustration of the need for it that we are more active on this front now because we believe it has a chance of passing."

Shumaker has acknowledged accepting a $10,000 cash gift from South Korean automaker Hyundai Motor Corp. in 1995 or 1996, about the time he started at UofL. In 1999 Shumaker invested $200,000 in a company owned by J. Chester Porter, then chairman of the UofL trustees, according to Porter's testimony in Shumaker's divorce case. And Shumaker placed $36,000 in personal charges on the UofL Foundation credit card, a UofL audit found, although he paid back all but $2,000 while still in office.

Shumaker, UofL's president from July 1995 to June 2002, resigned as president of the University of Tennessee in August after questions were raised about his use of UT's plane and credit card. An audit by the Tennessee comptroller found Shumaker may have violated state law by impeding the investigation into his travel and spending.

Jill LeMaster, executive director of the Executive Branch Ethics Commission, called the university-related package of reforms, which are still being drafted, "one of the top priorities" for Helm and the commission.

She said the commission may seek to place university officials under the current code or may seek legislation creating a new section applicable to universities.

Helm said he has talked to House Speaker Jody Richards, D-Bowling Green, about sponsoring the package of reforms.

Richards, who has pre-filed four ethics-related bills on employment in state agencies, said yesterday that he considers the commission's ideas "excellent." He said he supports bringing university presidents under the ethics code but declined to discuss other issues the commission might consider tomorrow.

"I think they're on the right track, and I'm going to try to help them," Richards said, adding if he doesn't sponsor the proposals he would work closely with the House member who does.

SENATE PRESIDENT David Williams, R-Burkesville, was in court yesterday and did not return a call to his office.

Sheldon Steinbach, general counsel for the American Council on Education, said he didn't know how many states required university officials to abide by statewide ethics codes. But he said there is "appropriate heightened scrutiny of senior (university) officials and boards of trustees across the country," given recent corporate and government scandals.

"One would be hard-pressed to argue that reasonable, generic ethical standards should not be observed by senior college and university officials as well as their trustees," Steinbach said.

The Kentucky ethics law prohibits executive branch officials from using their positions for personal benefit and requires them to disclose conflicts of interest.

The law bars executive branch officials from accepting outside pay without the commission's consent, using confidential information learned in office for economic gain, profiting from the use or loan of public money, and doing business with state agencies. It also requires the officials to file an annual financial disclosure statement.

The law applies to top state officials, including the governor and other elected officials in the executive branch, all "major management personnel" in state agencies, and members of some boards, including the Parole Board and the Public Service Commission.

The ethics commission is the enforcement agency for the ethics code. It maintains the financial disclosure forms and investigates complaints.

Violating certain provisions of the code, such as receiving outside pay or using confidential information learned in office, is a felony punishable by one to five years in prison.

Since the ethics law was created in 1992, university employees have not been covered by it because they are considered to have their own governance through university trustees.

But Helm said the commission frequently has discussed requiring university presidents, trustees and other officials to follow the ethics law.

HELM SAID the commission has not proposed ethical requirements for university presidents in the past because it believed opposition from the presidents would scuttle the chance to enact tougher rules in the legislature. He said universities have demonstrated a "historical reluctance to lose internal control of almost anything."

"I am less inclined to think they will (oppose commission oversight) this time than they have in the past," he said.

The presidents of Morehead State University, Western Kentucky University and the Kentucky Community and Technical College System said yesterday that they would welcome being required to follow state ethics rules, and that they had been working with the Council on Postsecondary Education on a voluntary financial disclosure form.

"I think it's a good thing and would be willing to participate," Michael McCall, president of the community and technical college system, said when told of the commission's intentions.

James R. Ramsey, UofL president and former state budget director, has said he would abide by the ethics rules and file a financial disclosure form if the trustees asked him to. The trustees have not yet made such a request.

LeMaster said the commission is considering subjecting university trustees and the members of other state boards currently not covered by the ethics law to only certain aspects of the law.

THOSE ASPECTS are a prohibition on trustees doing business with the universities they serve, a requirement that trustees disclose conflicts of interest and abstain from voting in such cases, and limits on gifts from outside entities to $25 a year, she said.

"There's a feeling on a great part of the public that some of these boards and commissions feel like they can use their authority with impunity and that membership on those boards is nothing but a political prize and that they confer power on a fairly elite circle," Helm said. "I don't think we have too many inherent ethical problems in colleges and universities, but I do think ethics enforcement in state government needs to be consistent."

Junior Bridgeman, chairman of the UofL board of trustees, said yesterday that he would accept new ethics rules for trustees and that trustees' conflicts should be disclosed.

UofL policy requires trustees and top administrators to disclose conflicts of interest and refrain from voting in those cases.

But Bridgeman said some trustees might have to choose whether to divest their financial interests in some companies that do business with their universities or give up their trustee appointments. "I'd have to give some thought to whether that's fair or not," Bridgeman said of the business proposal. "Personally, if that's what they decide, the legislature, I don't have a problem with that."

Bridgeman said he gave public notice recently when a construction company he invests in bid on a project at UofL. He said the company didn't get the contract.

UNIVERSITY of Kentucky administrators are developing a code of conduct for employees, administrators and trustees, and will present it to trustees later this year, said Mary Margaret Colliver, a UK spokeswoman.

Asked about Shumaker's investment deal with Porter, Helm said, "On the face of it it's something that causes me deep concern. Upper management personnel in state government need to have arm's length relationships with their boards in order for the system to work correctly."