Wallace G. Wilkinson

Wallace G. Wilkinson
57th Governor of Kentucky
In office
December 8, 1987 – December 10, 1991
Lieutenant Brereton Jones
Preceded by Martha L. Collins
Succeeded by Brereton Jones
Personal details
Born December 12, 1941(1941-12-12)
Casey County, Kentucky, USA
Died July 5, 2002(2002-07-05) (aged 60)
Lexington, Kentucky
Resting place Sarasota Memorial Park, Sarasota, Florida
Political party Democratic
Spouse(s) Martha Carol Stafford
Children Wallace Wilkinson, Jr.,

Andrew Wilkinson
Alma mater University of Kentucky

(dropped out)
Profession Businessman

Wallace Glenn Wilkinson (December 12, 1941 – July 5, 2002) was an American businessman and politician from the Commonwealth of Kentucky. From 1987 to 1991, he served as the state's fifty-seventh governor. Wilkinson dropped out of college at the University of Kentucky in 1962 to attend to a book retail business he started. The business rapidly became a national success, and Wilkinson re-invested his profits in real estate, farming, transportation, banking, coal, and construction ventures, becoming extremely wealthy. In 1987, he joined a crowded field in the Democratic gubernatorial primary. After running behind two former governors and the sitting lieutenant governor for most of the race, Wilkinson began to climb in the polls after hiring then-unknown campaign consultant James Carville. Wilkinson campaigned on a promise of no new taxes and advocated a state lottery as an alternative means of raising money for the state. Wilkinson surprised most political observers by winning the primary and going on to defeat his Republican challenger in the general election.

Wilkinson was able to secure passage of a constitutional amendment allowing a state lottery. He also helped craft a significant education reform bill in response to a ruling by the Kentucky Supreme Court that declared the state's entire public school system unconstitutional. Wilkinson's term was plagued by political scandal and an uneasy relationship with the state legislature. He advocated an amendment to the state constitution that would allow him to seek a second consecutive term as governor, but the amendment was defeated in the General Assembly. His wife Martha attempted to succeed him, but withdrew from the campaign amid weak support for her candidacy. Following his term as governor, Wilkinson encountered difficult financial times. In 2001, he was sued by a group of creditors, and during the proceedings, it was revealed that he was operating a Ponzi scheme to keep his businesses afloat. Both he and his wife Martha filed for bankruptcy later that year. In 2002, Wilkinson was hospitalized with arterial blockages. His condition was complicated by a recurrence of Non-Hodgkin lymphoma. He suffered a stroke on July 4, 2002, and his family withdrew his life support the following day in accordance with his previously-expressed wishes.

Contents

Early life

Wallace Wilkinson was born in rural Casey County, Kentucky on December 12, 1941.[1] He was one of four children born to Hershel and Cleo (Lay) Wilkinson.[2] When Wilkinson was young, the family moved to the county seat of Liberty, Kentucky.[3] There, Wilkinson helped his father run a grocery store.[3] He also delivered newspapers, sold popcorn from a street stand, and co-owned a shoe shine parlor with a boyhood friend.[4] He graduated from Liberty High School in 1959.[2]

Wilkinson matriculated to Campbellsville College and later transferred to the University of Kentucky.[2] While there, he began dating fellow student Martha Carol Stafford, whom he had known in high school.[2] They were married in 1960 and had two children: Wallace Glenn Wilkinson, Jr. (b. 1970) and Andrew Stafford Wilkinson (b. 1972).[5] While still in college, Wilkinson opened the Kentucky Paperback Gallery in Lexington, Kentucky.[1] He left school in 1962 to attend to his business, which evolved into Wallace's College Book Company.[1][2] The business expanded, opening retail stores in twenty-eight states and becoming one of the country's largest book firms.[3][5]

Wilkinson also pursued other business ventures in the fields of real estate development, farming, transportation, banking, coal interests, and construction.[1] One of his most high-profile projects was a proposed World Coal Center in Lexington.[6] Wilkinson hoped that all the major coal companies in the state would relocate their offices to the 50-story center, making it a hub for the international coal market.[6] Shortly after Wilkinson demolished the historic Phoenix Hotel to make way for the building, the coal market experienced a pronounced lull, and the empty lot where the proposed coal center would have stood was derided as "Wally's Folly".[6] Ultimately, Wilkinson struck a financing deal that included help from the Lexington-Fayette Urban County Government to construct a 21-story apartment complex on the site.[6]

In 1979, Wilkinson became involved with Terry McBrayer's campaign against John Y. Brown, Jr. in the Democratic gubernatorial primary.[5] He served as finance chairman for Harvey Sloane's unsuccessful gubernatorial bid in 1983.[3] The following year, he managed former governor Brown's brief senatorial campaign.[3] Although all three campaigns were unsuccessful, Wilkinson found that he enjoyed the challenges of competing in the political arena.[5] He lobbied the General Assembly to pass a multi-bank holding company bill allowing banking companies to own more than one Kentucky bank.[4] The bill passed in 1984.[4]

On April 10, 1984, Wilkinson was allegedly kidnapped by a man named Jerome Jernigan.[7] Jernigan claimed Wilkinson had cheated him in a business deal.[4] Wilkinson said he had been paying Jernigan money that Jernigan claimed Wilkinson owed him.[7] When Wilkinson refused to make further payments on April 10, he claimed Jernigan abducted him at gunpoint and forced him to drive to the Crowne Plaza Hotel in Frankfort.[7] The two spent the night at the hotel; the next day, they flew to Glasgow, Kentucky, where Wilkinson paid Jernigan $500,000 and was released unharmed.[7] Wilkinson alerted the FBI, and Jernigan was arrested the same day in Lexington.[7] His attorney maintained that the two-day ordeal was a legitimate business deal, not an extortion attempt.[7] Jernigan filed a counter-suit against Wilkinson in Fayette County circuit court for profits he claimed he was owed stemming from a previous business venture he and Wilkinson had made together.[7] Jernigan was found dead in a hotel one month before he was to stand trial for his alleged extortion.[7] Despite the fact that investigators found no signs of foul play, Wilkinson was dogged by questions about the event in later political campaigns.[7][8]

Governor of Kentucky

Wilkinson entered the 1987 Democratic primary for governor of Kentucky as an unknown running against a field that included two previous Kentucky governors, John Y. Brown, Jr. and Julian Carroll, sitting Lieutenant Governor Steve Beshear, and Grady Stumbo, cabinet secretary for Governor Martha Layne Collins.[5] Brown was the heavy favorite in the race, and Beshear, considered the second strongest candidate, spent much of the campaign attacking Brown.[9] Brown spent time and resources responding to Beshear's attacks; meanwhile, Wilkinson charged that both men wanted to raise taxes.[9] Wilkinson proposed a state lottery as an alternative to higher taxes.[3] He also advocated for wholesale education reform, stating that Kentucky's children "don't have a learning problem; they've got a schooling problem."[10] Two-time former governor A. B. "Happy" Chandler gave Wilkinson's campaign further credibility with his endorsement.[4]

Wilkinson financed his own campaign and campaign manager Danny Briscoe suggested that he hire a campaign consultant to reach out to the state's large population of undecided voters.[5] After a few interviews, Wilkinson hired a then-unknown political consultant named James Carville; Carville later went on to chair Bill Clinton's successful presidential campaign in 1992.[4][5] Wilkinson won the primary and went on to swamp Republican John Harper in the general election by a vote of 504,674 to 273,141.[3] Wilkinson carried 115 of Kentucky's 120 counties.[3] Kentucky historian Thomas D. Clark opined that Wilkinson's lavish spending during the campaign prompted the legislature to adopt campaign finance reform measures.[4]

Kentucky voters approved two amendments to the state constitution during Wilkinson's term. The first, allowing a state lottery for the first time in almost one hundred years, had been a centerpiece of Wilkinson's campaign.[11] His election was seen as a voter mandate for a lottery, and the amendment passed easily.[11] The second amendment passed during Wilkinson's term required landowner approval before strip mining could occur on a piece of property.[11] This amendment essentially overturned a 1956 court ruling and negated the practice of issuing broad form deeds.[11]

A third amendment for which Wilkinson advocated would allow elected state officials to succeed themselves in office.[3] The amendment would have applied to sitting officials, including Wilkinson.[3] The amendment died in the Kentucky Senate after passing the Kentucky House of Representatives.[3] Wilkinson's advocacy for the amendment damaged his reputation because, during the campaign, he had promised never to seek public office following his term as governor.[4] Most of the rest of Wilkinson's proposed agenda passed, excepting a measure to reward state schools which improved their academic performance.[3]

On May 31, 1988, Franklin County circuit court judge Ray Corns issued a ruling in the case of Council for Better Education v. Collins, et al. stating that Kentucky's system of school financing was unconstitutional.[12] The suit was brought against Wilkinson's predecessor, Martha Layne Collins, and several members of the state government by a group of poor school districts as a means to equalize funding for all the state's school districts. An advocate for education, Wilkinson dropped the governor's office's defense in the suit and joined the plaintiffs when Corns' decision was appealed to the Kentucky Supreme Court.[13] On appeal, the Supreme Court declared Kentucky's entire public school system unconstitutional and mandated that the legislature reform it.[3] In response, Wilkinson backtracked on his campaign promise not to raise taxes and proposed extending the state's five percent sales tax to apply to certain services, with the money going to improve public education and fund a variety of other projects.[3] Instead, legislators favored raising the sales tax to six percent, which Wilkinson agreed to in exchange for the Assembly's approval of a bond issue to finance road improvements he had promised during the campaign.[3] On April 11, 1990, the Assembly also passed the Kentucky Education Reform Act (KERA) to comply with the Supreme Court's decision.[14] Besides increasing funding for schools, it mandated high performance measures and held schools accountable for meeting them.[10] Educators hailed the legislation as being among the nation's best education reform plans.[3]

The political debates and posturing leading up to the passing of KERA led to a rift between Wilkinson and Lieutenant Governor Brereton Jones. Up to this point, the relationship between the two was not positive, and Jones has described it as "terrible".[15] During a teachers' rally in Frankfort, Jones was sympathetic to their demands for more money for education than Wilkinson was supporting. Jones wanted to speak to the crowd that had gathered outside the Capitol. While in the governor's office, Wilkinson told Jones that if he spoke to the crowd, he should never "step foot in this office again."[15] That day, Jones spoke to the teachers and never set foot in Wilkinson's office again.

Wilkinson also advanced economic development in the state. During his tenure, Delta Air Lines expanded its operations in northern Kentucky, Scott Paper Company opened a plant near Owensboro, and North American Stainless, a Spanish-owned steel company, located a plant near Carrollton.[10] During his term in office, Wilkinson served on the Education Commission of the States, the Southern Growth Policies Board, and the Council of the State Governments and the Southern States Energy Board.[1] He also chaired the Southern Governors Association and the Education Commission of the States' Policy and Priorities Committee.[1]

The Wilkinson administration was dogged by ethical questions that eventually resulted in prosecution of some members. Before being elected governor, Wilkinson asked the Kentucky attorney general to rule on his ownership of the Holiday Inn Capital Plaza Hotel in Frankfort. The ruling stated that he should sell the hotel, and in November 1987, Kentucky Central Life Insurance, a state-regulated company, purchased the property for $12 million, which included $8.2 million of debt.[16] Kentucky Central became insolvent in 1994 and was ordered into liquidation. The following year, Kentucky Insurance Commissioner George Nichols III assumed the liquidation and brought suit against Wilkinson stating that the property was only worth $6 million.[17] Franklin County Circuit Judge Earl O'Bannon dismissed the lawsuit on the grounds that Wilkinson had not knowingly participated in Kentucky Central's breach of financial responsibility, even though it had, in his words, an "odor of politics." [17] Further, an investigation of the Kentucky General Assembly by the FBI (Operation Boptrot) led to Wilkinson's nephew, Bruce N. Wilkinson, who served as his appointment secretary. Bruce Wilkinson was convicted of extortion, fined $20,000, and sentenced to three years in prison.[4] Wallace Wilkinson was investigated by a grand jury but never indicted.[10] He vehemently denied any wrongdoing.[10]

In 1990, Wilkinson's wife, Martha, announced that she would seek the Democratic gubernatorial nomination in 1991.[18] The move was widely seen as an attempt to continue her husband's administration in the absence of his proposed succession amendment.[18] Her challengers included Lieutenant Governor Jones, Lexington mayor Scotty Baesler, and Dr. Floyd G. Poore. With polls consistently showing little support for her candidacy, Wilkinson dropped out of the race in May 1991.[18] Earlier in the year, Wallace Wilkinson was diagnosed with limited-stage Non-Hodgkin lymphoma.[4] This diagnosis was also a factor in Ms. Wilkinson's withdrawal from the race.[18] Wallace underwent surgery at the Mayo Clinic in Rochester, Minnesota, then received radiation therapy at the University of Kentucky.[10] These treatments eliminated all signs of the disease by 1993, and doctors gave Wilkinson an excellent chance of recovery.[4][10]

As Wilkinson's term ended, he appointed himself to a six-year term on the University of Kentucky's board of regents.[4] The move was unprecedented, and was particularly controversial because of Wilkinson's open feuds with Charles T. Wethington, Jr., the university's president.[18] An incensed legislature passed a law shortly thereafter aimed at taking politics out of university board appointments.[4] Wilkinson's successor, Brereton Jones, used the provisions of the law to remove Wilkinson and several of his appointees from the university boards.[4]

Later life

After his service as governor, Wilkinson returned to his business pursuits. In the early 1990s, he began borrowing money to keep his bookstore business solvent and to support his lavish lifestyle.[4] His interest in running for another non-consecutive term as governor appeared to be dampened by the system of public financing that Kentucky had in place at that time for gubernatorial elections. In 1995, he published his memoir entitled You Can't Do That, Governor!; a major theme of the book was his disdain for conventional wisdom and political norms.[10] In 1999, he launched ecampus.com, an Internet book retailer.[4] Among the investors in the company were Wendy's founder Dave Thomas, Long John Silver's founder James Patterson, and Ohio State University president William English Kirwan.[19]

On February 5, 2001, a group of Wilkinson's creditors filed suit to have his companies seized.[10] During the ensuing bankruptcy proceedings, Wilkinson admitted that his liabilities exceeded his assets by $300 million.[10] During the proceedings, it was revealed that Wilkinson had been financially insolvent since 1992 and was operating a Ponzi scheme, paying his creditors with money borrowed from others rather than his own profits.[19] He had paid no federal income taxes since 1991.[19] At his deposition in June 2001, Wilkinson invoked his Fifth Amendment privilege against self-incrimination over 140 times.[20] Wallace's Bookstore was liquidated for just over $31 million, and ecampus.com was sold for $2.5 million.[20] Wilkinson's wife, Martha, also filed for bankruptcy; his sons were forced to sell their homes to repay loans made to them by their father.[20] During the bankruptcy proceedings, the Wilkinsons moved from Lexington to Naples, Florida.[10]

While in Lexington for a deposition on May 26, 2002, Wilkinson began to experience chest pains and was admitted to St. Joseph's Hospital.[10] Doctors diagnosed him with arterial blockages and scheduled him for arterial bypass surgery.[17] Before the surgery could be performed, however, doctors discovered another lymphatic mass.[17] Wilkinson began taking chemotherapy, and doctors removed the mass on June 4, 2002.[10] Wilkinson was placed on life support on June 26, 2002.[17] He suffered a stroke on July 4, 2002.[10] Wilkinson had previously instructed his family not to continue life support after all hope of recovery was gone; accordingly, they decided to withdraw life support, and Wilkinson died on July 5, 2002.[4] He is entombed within a locked mausoleum at Sarasota Memorial Park in Sarasota, Florida.[17]

See also

Ancestors

References

  1. ^ a b c d e f "Kentucky Governor Wallace G. Wilkinson". National Governors Association
  2. ^ a b c d e Adams, p. 237
  3. ^ a b c d e f g h i j k l m n o p Cross, p. 956
  4. ^ a b c d e f g h i j k l m n o p q Jordan, "Former Kentucky Gov. Wallace Wilkinson dies at 60"
  5. ^ a b c d e f g Adams, p. 238
  6. ^ a b c d Noland, p. 70
  7. ^ a b c d e f g h i "Jernigan Found Dead in Motel". Daily News
  8. ^ "Republican Official Continuing Wilkinson Kidnapping Question". Kentucky New Era
  9. ^ a b Dionne, "Upset in Democratic Primary"
  10. ^ a b c d e f g h i j k l m n "Wallace Wilkinson dead at 60". The Enquirer
  11. ^ a b c d Harrison, p. 420
  12. ^ Dove, p. 21
  13. ^ Dove, p. 22
  14. ^ Dove, p. 25
  15. ^ a b Miller, p. 7
  16. ^ Adams, pp. 242–243
  17. ^ a b c d e f Adams, p. 243
  18. ^ a b c d e Adams, p. 242
  19. ^ a b c Noland, p. 71
  20. ^ a b c Noland, p. 72

Bibliography

Further reading

Political offices
Preceded by
Martha L. Collins		 Governor of Kentucky
1987–1991		 Succeeded by
Brereton Jones
Party political offices
Preceded by
Martha L. Collins		 Democratic nominee for Governor of Kentucky
1987		 Succeeded by
Brereton Jones
Italics indicate Confederate governors
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Book:Governors of Kentucky