Las Vegas Sun

January 21, 2018

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Krolicki: What I did with college fund was kosher

Lt. Gov. Brian Krolicki continues his "best defense is a good offense" approach to a pending indictment with a statement and letters supporting his case. I have posted the statement below and the letters at right.



“The media has understandably begun to speculate as to the underlying events leading to the Attorney General's actions announced on Monday. While it is unfortunately not known what the Attorney General will specifically allege, much attention has focused on a Legislative Counsel Bureau Audit of the College Savings Plans that was released in May of 2007.

“As far as we can tell, the Attorney General is trying to punish me for creating one of the most successful college savings programs in the country, literally from scratch. Using no taxpayer money to start the program, we entered into contracts with law firms, advertising agencies, and money managers to create, promote and operate the program. All of the contracts were approved by the Attorney General's Office and the State Board of Examiners. All of the contractors were paid according to the approved contracts and solely with fees generated by the program.

“The Legislative Counsel Bureau (LCB) audit claims that the payments made pursuant to the contracts should have been run through the budget, but my attorneys and I respectfully disagree. Various state agencies have historically entered into contracts whereby payments are made on behalf of the state without going through the budget. In fact, the current State Treasurer is still paying law firms, underwriters and insurers in this manner.

“Despite a disagreement over the process, even the LCB audit found that:

1) We created one of the most successful college savings plans in the country;

2) All of the money was accounted for;

3) No money was missing; and

4) All the money was spent on the program.

“While reasonable people can disagree over policy and process issues, I can't understand how anyone can conclude that our management of the program was criminal. We strongly believe this audit is demonstrably wrong in many key areas, and attached to this advisory is a letter originally sent to Lieutenant John Drew, former head of the Nevada Division of Investigation, which directly addresses the flawed and biased findings on a wide variety of complex issues associated with the program. The attached letter describes the specific laws and contracts relating to the college savings program which clearly provide for how these funds were managed. Also attached is a letter from the law firm of Orrick, Herrington disputing the auditors findings as to the payments they received for the legal services they provided to the program .

Bottom-line - All funds related to this program were accounted for and balanced to the penny, and the Legislative Auditors basically didn't like how the program paid its bills."

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