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Condemnation-Gate Has New Smoking Gun in Lexington Kentucky

by Mario, Guerilla Reporter

January 31, 2005

Yet another smoking gun has been found in Mayor Teresa Isaac’s ongoing battle against the well run and privately owned water utility known as Kentucky American Water (KAWC). If citizens weren’t in an uproar over four female members of the LEFTington Urban County Council starting a radical anti-property rights group known as FLOW (For Local Ownership of Water) over tea and crumpets, now they have a $160,000.00 fraud scandal to fire them up. Since Watergate, such a perfect name, is taken, we will have to settle for “Condemnation-gate”.

George Raftelis was hired to valuate Kentucky American Water, allegedly to give the Council and the Mayor an appraisal of KAWC’s value before proceeding with the communistic condemnation proceedings. His work is allegedly the basis used to justify going forward with the very divisive and expensive, 1.3 Million Dollars so far, takeover. Mr. Raftelis is a fraud. By his own admission under oath, he does not have the proper qualifications or certifications to do the work he was hired and paid handsomely to do. He has admitted that statements he made in the process of being hired by LFUCG were wrong and that none of his firm’s appraisals done prior to July of 2004 met any type of recognized appraisal standards. The $160,000.00 LFUCG Report by Raftelis was done March 3, 2003. This begs the question of who checked Mr. Raftelis’ qualifications prior to spending my money for his faulty work.  Have they ever heard of resumes and background checks down at LFUCG?

Furthermore, Raftelis made absolutely no effort to contact LFUCG, or its counsel, to advise them of the errors in the 2003 Report. He has admitted under oath that his methods have “evolved” since that time, and he knows the condemnation proceedings are still ongoing in LEFTington. “Given the serious nature of the takeover in Lexington, it would just make sense that Mr. Raftelis at least would have alerted Mayor Isaac that his view of valuation had ‘evolved’” said Joe Conner, counsel for American Water and recognized legal expert in the field of eminent domain.

A core argument Raftelis put forth in LEFTington was with respect to the 150 Million Dollar “affordability” of KAWC. On page 17 of his report, he stated, “selling the utility at a level substantially greater than the rate base places the financial burden of the sales premium on the customers.” He has admitted now that this statement is inconsistent with appraisal standards. He said he would not make that statement to a client today. This statement is the very basis the old Council and soon to be “old Mayor” used to justify the takeover.

As crooks do, Raftelis is back stepping, saying it was a “misnomer” that his 2003 report to LFUCG was a formal valuation, now calling it a preliminary appraisal. Raftelis was also paid an additional $30,000.00 in LEFTington to appraise the assets of KAWC under something called the RCNLD method, but admits that RFC, his company, is not an engineering company or an asset valuation company. Hmmm, something smells like manure here; do you smell it too?

Joe Conner says that given Raftelis has no appraisal training or certifications and has even changed his methods since he did the flawed LFUCG report, “it is fairly obvious that Mr. Raftelis’ credentials to advise a government on something as important as condemnation are suspect.” Meaning no disrespect to Mr. Conner, DUH!

It has long been speculated by many LEFTingtonians that Raftelis was hired by LFUCG, at the behest of Mayor Teresa Isaac, because his report would give the numbers the Mayor and the pro-condemnation Council members would need to proceed with condemnation. Whether or not that is the case, he sure did give them the report they needed to push the communistic theft of a private company, costing taxpayers in excess of 1.3 Million Dollars so far, not to mention the time and energy we have lost that could have been utilized in other areas, and the division this issue has caused in the community.

Let’s look at some other RFC work. In Peoria, IL, Mr. Raftelis valued Illinois American Water at 95 Million Dollars while Illinois American says the value is 300 Million Dollars. Imagine that. We will be watching with bated breath as a three-person commission in Illinois sets the value of Illinois American on March 7^th 2005. Anyone want to take any wagers on how many millions Raftelis missed this one by? Count me out; I don’t bet and I’m as lousy a poker player as Raftelis is an honest businessman.

According to Mr. Raftelis, he did a valuation of the Jamaica water system and stated its value to be $100 Million Dollars. He told Council Member Dr. David Stevens it sold for “about the same amount”. Under oath in Peoria, IL, Mr. Raftelis said his Jamaica valuation was $62.5 Million Dollars and the Jamaica system was later sold in bankruptcy for 148 Million Dollars. Now, excuse me, but first of all, 62.5 Million Dollars is nowhere near 100 Million Dollars and is even further away from 148 Million Dollars. Furthermore, if Jamaica Water sold in bankruptcy, it most likely was sold far below its true value. The simple math of the difference between 100 Million and 62.5 Million yields 37.5 Million. Is 37.5 Million Dollars pocket change to Mr. Raftelis? I guess that’s understandable since he gets 160 Thousand Dollars for paperwork he files which he isn’t even qualified to write. Put me in line for the next report they need down at the money pit we call LFUCG! I will do it for half.

There are other questions that beg to be asked here. Is Mr. Raftelis a “hired gun” for the Mayor and her FLOW cronies on the Council who want to takeover KAWC in order to dole out its assets to their supporters? Did they know in advance that Raftelis would give whatever number they required? Did they know he did not have the qualifications he represented himself and his firm to have? Is George Raftelis a “serial water company hit man”? That manure smell is getting worse by the minute.

Warren Rogers, President of the Coalition Against A Government Takeover, www.notakeover.com, stated: "It appears Raftelis was hired to tell a majority of Council members what they wanted to hear rather than what they needed to know. Now, the truth is coming out. From the beginning, the people of Lexington were misled about the cost of this takeover. Those Council members who orchestrated this takeover need to account for the tax dollars spent and their failure to seek unbiased advice about the ultimate cost to taxpayers." A hearty AMEN goes out to Warren Rogers, the “W” of LEFTington!

It is time for the LFUCG Council and the Mayor to admit the errors of their ways and end this communistic condemnation of KAWC. It is time for an independent investigation into Condemnation-gate with testimonies taken under oath from all those officials involved. It is time to send George Raftelis a nice letter demanding the return of the money he accepted under false and misleading circumstances. If his response is not in the form of a good check, then we need to go after him legally and then prosecute him for fraud. How about Joe Conner getting the job? It is time to change the way business is conducted in downtown LEFTington, also known as the “Money Pit of Central Kentucky”.

“When the righteous are in authority the people rejoice; but when the wicked beareth rule, the people mourn.” --Proverbs 29:2

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