New documents show that the Kansas Bioscience Authority has spent about $122,000 in public funds, nearly twice as much as previously reported, on legal fees for two former executives facing a criminal investigation.
KBA attorney Tariq Abdullah said several pages had been inadvertently excluded from an electronic copy of legal billing records sent to The Eagle on Friday in response to a request filed under the Kansas Open Records Act.
On Saturday, The Eagle reported that the authority has paid $53,671 for former chief executive officer Tom Thornton’s attorneys and expenses, and $10,197 for lawyers for Janice Katterhenry, the former chief financial and operating officer.
The new records supplied Monday by the Kansas Bioscience Authority show that Husch Blackwell, the Kansas City, Mo., firm representing Katterhenry, has been paid a total of $68,887.
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The records show that three of the firm’s partners worked on Katterhenry’s case. The firm billed $415 an hour for partners Patrick McInerney and Angela Harse, and $390 an hour for partner Kimberly Jones.
Research and paralegal assistants were billed at rates of $109 to $170 an hour, the records show.
Billing records indicate that the expenses revolved around Thornton’s and Katterhenry’s participation in an audit of the agency’s operations, paid for by the KBA and guided by the governor’s office. The $960,000 audit was released last week by the KBA.
Sen. Susan Wagle, R-Wichita, said she thinks the legal fees are excessive.
“Why would you need to spend $68,000 on an attorney to talk to an auditor?” said Wagle, chairwoman of the Senate Commerce Committee, which has been investigating the KBA since last year.
The KBA also is under a criminal investigation by the Johnson County District Attorney’s office.
KBA spokeswoman Sherlyn Manson said the agency has consulted with outside legal counsel and been told that under KBA bylaws, it must pay for Thornton’s and Katterhenry’s legal bills as they are submitted.
There are provisions for recovering the money if the former executives are found to have acted in bad faith or against the interests of the authority.
“It’s a legal matter,” Manson said. “The attorneys are paying close attention to the situation and will advise us accordingly.”
The audit, 900 pages of reports and supporting documentation, identified few problems with the KBA’s handling of its primary duty, investing state funds in bioscience companies and research.
However, it faulted Thornton for destroying documents, misusing public funds for personal expenses, and creating an uncomfortable work environment by having an office romance with a woman he hired and later married.
The audit was far less critical of Katterhenry and it was unclear why her legal bills would have exceeded Thornton’s.
Most of what the law firm did for Katterhenry was blacked out on the billings provided to The Eagle. The Kansas Supreme Court has ruled that while public agencies’ legal billings are a matter of public record, they can redact information that infringes on attorney-client confidentiality.
The audit did question some of Katterhenry’s decisions on handling expenses and contacts she made in an effort to help her son, a recent college graduate, land a job in the bioscience field.
However, the audit found that she had generally followed KBA expense procedures in place at the time and had occasionally sought approvals of expenses from then-board president John Carlin.
Katterhenry’s son was hired by a company that had received some funding from the KBA and needed to hire someone to meet its goals to get additional money . The audit indicated that Katterhenry had disclosed a potential conflict of interest with the company that hired her son and did not participate in the consideration of that company’s funding.