Court Opinion

ID: 4581773
Source: CourtListenerOpinion
Date Created: 2020-10-29 15:05:58.436009+00
Date Added: 2024-06-11T13:45:33.905885
License: Public Domain

RENDERED: OCTOBER 29, 2020
                                                               TO BE PUBLISHED

                    Supreme Court of Kentucky
                                      2018-SC-0657-DG

FRANK LASSITER                                                        APPELLANT

                       ON REVIEW FROM COURT OF APPEALS
V.                           NO. 2017-CA-1310
                     WOODFORD CIRCUIT COURT NO. 16-CI-00293

WILLIAM M. LANDRUM, III, SECRETARY                                     APPELLEE
OF THE FINANCE AND ADMINISTRATION
CABINET

                   OPINION OF THE COURT BY JUSTICE LAMBERT

                              AFFIRMING AND REMANDING

      Frank Lassiter appeals a decision by of the Court of Appeals requiring him to

comply with a subpoena duces tecum issued to him by William Landrum, the

Secretary of the Finance and Administration Cabinet (Secretary).

      In order to address this appeal this Court will consider, as a matter of first

impression, the breadth of the investigative powers granted to the Secretary by virtue

of KRS1 45.131 and KRS 42.142. More specifically, whether those statutes enable

the Secretary to issue subpoenas as part of an investigation into a suspected

violation of Kentucky’s Model Procurement Code2 (KMPC), and, if so, whether the

Secretary may issue subpoenas to non-government employees as part of an

      1   Kentucky Revised Statute.
      2   KRS Chapter 45A.
investigation into a suspected violation of the KMPC. After review, we affirm and

remand for proceedings consistent with this opinion.

                                           I.   FACTS

        Although this case solely concerns statutory interpretation, we believe a brief

recitation of the facts will be helpful to provide context.

        Lassiter is a former Kentucky state government employee; from 2008 until

20113 he served as Executive Director of the Office of Administrative Technology

Services (OATS), which is housed within the Cabinet for Health and Family Services.

Lassiter’s duties as the Executive Director of OATS included oversight and

management of healthcare-related information technology systems, and planning for

future procurements of information technology goods and services for the state.

During Lassiter’s tenure in state government, Congress enacted the Patient

Protection and Affordable Care Act.4 Following its passage, Kentucky chose to

develop its own benefits exchange: “Kynect.” The request for proposal (RFP) to build

Kynect was under development in OATS from 2010 until the RFP’s issuance in July

2012.

        Deloitte Consulting (Deloitte) was the only company to respond to the Kynect

RFP. Deloitte’s proposal included procurement of analytics software from SAS

Institute, Inc. (SAS), which constituted $850,000 of the contract price. On July 19,

2012, a week after Deloitte responded to the Kynect RFP, SAS hired Lassiter as a

        3   After 2011 he began working in the private sector.
        4   P.L. 111-148, 124 Stat. 119 (March 23, 2010).

                                                 2
consultant.5 An SAS spokesman acknowledged that Lassiter helped SAS’s efforts to

win its part of the Kynect job “by advising SAS how it could help deliver anti-fraud

measures to the state, as well as by helping to craft its proposal to Deloitte.”6 In

October 2012, the Commonwealth and Deloitte entered into a contract that the

parties refer to as the “Master Agreement.” The Master Agreement provided for

Deloitte to utilize various subcontractors to develop Kynect. Deloitte subcontracted

SAS to develop fraud analytics for Kynect.

      In January 2013, the Master Agreement was modified to pay SAS $4.8 million

to provide a fraud, waste, and abuse prevention system, which was five times the

original estimated cost for SAS’s work. In February 2013, the Commonwealth issued

payment to Deloitte, who then paid SAS. Two weeks later, SAS issued its first

payment to Lassiter for his assistance in procuring the contract.

      The Secretary asserts that, under Lassiter’s guidance, SAS’s role quickly

expanded beyond Kynect to provide anti-fraud services to other government agencies.

In May 2013, SAS received a $575,000 contract to develop and maintain a fraud

prevention system for the Kentucky Department of Revenue; in June 2014 SAS

received another $575,000 contract to develop a fraud prevention system for the

Kentucky Office of Employment Training; in December 2014 SAS received a $1.125

million contract to develop a corporate tax model for the Kentucky Department of

      5  Whether Lassiter’s subsequent work for SAS complied with KRS 11A.040 is not at
issue in this case.
      6  https://kycir.org/2016/03/03/company-with-linkto-beshear-administration-got-11-
million-in-no-bid-work/ (last visited July 2020). The link to this website was provided in the
record as part of the sworn affidavit of the Finance and Administration Cabinet’s Inspector
General Ken Bohac.

                                              3
Revenue; and, in October 2015 SAS received a $600,000 contract for additional

services to the Kentucky Office of Employment and Training. Finally, in response to

then Governor-elect Matt Bevin’s pledge to dismantle Kynect, the outgoing

administration entered into a final contract with SAS for $3.079 million to provide

more than a year of fraud prevention services to the state. Lassiter was blind copied

on an email from SAS containing a full draft of the contract.

      It is undisputed that none of the foregoing contracts were procured via properly

noticed RFPs, nor were they subjected to competitive bidding.7 The Secretary

therefore characterizes the contracts as “no-bid” contracts in violation of the KMPC

and the policies and procedures of the Finance and Administration Cabinet. Lassiter,

in contrast, asserts that the contracts were simply modifications to the existing

Master Agreement, which were provided for in the Master Agreement.8 Regardless of

whether the contracts complied with the KMPC, which we are not called upon to

determine in this appeal, their award prompted the Secretary’s current investigation.

After beginning his investigation, the Secretary sought Lassiter’s cooperation, as he

believed Lassiter was a witness with valuable information. When Lassiter refused to

      7   See KRS 45A.080.
      8  In support of this contention Lassiter cites Section 40.050 of the Master Agreement,
which provides: “Pursuant to KRS 45A.210(1) and 200 KAR 5:311, no modification or change
of any provision in the Contract shall be made, or construed to have been made, unless such
modification is mutually agreed to in writing by the Contractor and the Commonwealth, and
incorporated as a written amendment to the Contract and processed through the Office of
Procurement Services and approved by the Finance and Administration Cabinet prior to the
effective date of such modification or change pursuant to KRS 45A.210(1) and 200 KAR
5:311. Memorandum of understanding, written clarification and/or correspondence shall
not be construed as amendments to the Contract. If the Contractor finds at any time that
existing conditions make modification of the Contract necessary, it shall promptly report
such matters to the Commonwealth Buyer for consideration and decision.”

                                              4
voluntarily cooperate with the investigation, the Secretary issued the subpoena

currently at issue. The subpoena sought, among other things, evidence regarding

Lassiter’s relationship with SAS and the award of the contracts to SAS by the

Commonwealth. Lassiter refused to comply with the subpoena. Lassiter did not

argue that the subpoena was unduly burdensome or that he did not have responsive

information to it. Rather, his sole argument was that the Secretary did not have the

requisite authority to issue it to him, as his authority to issue subpoenas under KRS

Chapter 45 did not extend to investigations into potential KMPC violations and, in

any event, did not allow him to subpoena non-government employees.

         The Woodford Circuit Court denied the Secretary’s subsequent motion to

compel Lassiter’s compliance. The circuit court based its ruling upon its finding that

the Secretary’s subpoena power did not apply to investigations into possible

violations of the KMPC. The Court of Appeals reversed.9 It held that the Secretary’s

subpoena power did extend to a potential KMPC violation investigation, and it further

held that the Secretary could subpoena non-government employees as part of said

investigation.10

         Additional facts are discussed below as necessary.

                                       II.   ANALYSIS

         This appeal involves two distinct, yet interwoven issues. First, do the

investigatory powers granted to the Secretary by KRS 45.131 and KRS 45.142 allow

         9   Landrum v. Lassiter, 2017-CA-001310-MR, 2018 WL 6132283 (Ky. App. Nov. 16,
2018).
         10 Id.

                                               5
the Secretary to issue subpoenas as part of an investigation into a suspected

violation of the KMPC. And, under the aforementioned statutes, is the Secretary

permitted to issue subpoenas to non-state employees as part of an investigation into

a potential violation of the KMPC.

      As this case concerns statutory interpretation, we begin by reiterating our long-

standing principle that

              [i]n construing statutes, our goal, of course, is to give effect
              to the intent of the General Assembly. We derive that intent,
              if at all possible, from the language the General Assembly
              chose, either as defined by the General Assembly or as
              generally understood in the context of the matter under
              consideration. We presume that the General Assembly
              intended for the statute to be construed as a whole, for all of
              its parts to have meaning, and for it to harmonize with
              related statutes. We also presume that the General
              Assembly did not intend an absurd statute or an
              unconstitutional one.11

With these principles in mind, we will address each issue in turn.

A.    The Secretary’s subpoena power extends to investigations into
      possible violations of the KMPC.

      The Secretary of the Finance and Administration Cabinet is “the chief financial

officer of the state and the adviser of the Governor and the General Assembly in

financial matters, and shall at all times protect the financial interests of the state.”12

Further, under the KMPC, the Secretary is the chief purchasing officer of the state

      11 Rice v. Commonwealth, 492 S.W.3d 563, 564 (Ky. 2016) (quoting Shawnee Telecom
Res., Inc. v. Brown, 354 S.W.3d 542, 551 (Ky.2011)) (internal citations omitted).
      12   KRS 42.012.

                                             6
“who shall be responsible for all procurement of the Commonwealth,” except as

otherwise provided by statute.13

      The first statute at issue in this case, KRS 45.131, directs that

               The Finance and Administration Cabinet, the Chief Justice,
               and the Legislative Research Commission for their respective
               branches of government shall investigate any alleged
               mismanagement of any of the affairs of the state by any
               officer, employee, or governing body responsible within
               their respective branches of government for the carrying
               out of any state function or the management of state
               funds and shall recommend the removal of any unnecessary
               officer or employee and of any officer or employee who they
               find has grossly mismanaged any state affairs within their
               respective branches of government.14

The second statute, KRS 45.142, which contains the Secretary’s power to issue

subpoenas, reads:

               For the purpose of enforcing the provisions of this chapter
               and those sections of KRS Chapters 41, 45, and 48 relating
               to the state budget and financial administration, the
               secretary of the Finance and Administration Cabinet, the
               Chief Justice, and the Legislative Research Commission, for
               their respective branches of government, or any officer or
               employee designated by them, shall have free access during
               business hours to all books, reports, papers, and accounts
               in the office or under the care or control of any budget unit
               of their respective branches of government, and may
               administer oaths, certify to official acts, issue subpoenas,
               compel the attendance of witnesses and the production of
               testimony touching any subject properly under
               investigation by them, and may compel the production of
               books, papers, and accounts. If any person fails to comply
               with the order of, or to obey a subpoena issued by them or
               their designated agents, or refuses to testify as a witness to
               any matters regarding which he may be lawfully
               interrogated, the judge having jurisdiction of the person to
               whom the order or subpoena was issued may, on their

      13   KRS 45A.030(3).
      14   (emphasis added).

                                              7
               application compel obedience by proceedings for contempt as
               in the case of disobedience of a subpoena or order issued
               from such court or a refusal to testify therein, and may
               adjudge such person guilty of contempt of court and punish
               him as provided by law in other contempt cases.15

      The primary basis for Lassiter’s argument that the Secretary’s subpoena power

does not extend to investigations into potential KMPC violations is that KRS 45.142

does not include a reference to KRS Chapter 45A, i.e. the KMPC. Specifically, that

the first line of KRS 45.142 reads: “[f]or the purpose of enforcing the provisions of

this chapter and those sections of KRS Chapters 41, 45, and 48…,” but does not

mention KRS Chapter 45A. We disagree.

      While Lassiter is clearly correct that KRS 45.142 does not directly reference

KRS Chapter 45A, it does state that its purpose is to enforce KRS Chapter 45. And

KRS 45.131, which of course is part of KRS Chapter 45, requires the Finance and

Administration Cabinet to “investigate any alleged mismanagement of any of the

affairs of the state by any officer, employee, or governing body.”16 In addition, KRS

45.142, which is also a component of Chapter 45, arms the Secretary with several

investigative tools, including the power of subpoena, to gather evidence “touching

any subject properly under investigation by [him].” It does not say, as Lassiter would

have us hold, “touching any subject properly under investigation by the Secretary

except investigations into possible violations of KRS Chapter 45A.” Rather, it is more

probable that the General Assembly did not include KRS Chapter 45A in the

language of KRS 45.142 because its directive to investigate any alleged

      15   (emphasis added).
      16   (emphasis added).

                                            8
mismanagement of any subject properly under the Secretary’s investigation was

broad enough to encompass the KMPC, assuming of course that the KMPC is a

subject properly under his investigation.

      Therefore, it seems that the real question before us is whether a possible

violation of the KMPC is a “subject properly under investigation” by the Secretary.

Even a cursory inspection of the KMPC demonstrates that the answer to that

question is a resounding “yes.”

      The KMPC applies “to every expenditure of public funds by this Commonwealth

and every payment by contingency fee under any contract or like business

agreement.”17 In addition to the Secretary’s duties as chief financial officer of the

state who is charged at all times with protecting the financial interests of the state,18

the KMPC delegates to the Secretary the duty of being the chief purchasing officer of

the state with the responsibility for all procurements of the Commonwealth.19

Further, the KMPC directs that

               [t]he secretary of the Finance and Administration Cabinet
               shall have power and authority over, and may, except as
               otherwise expressly provided in this code, adopt regulations
               pursuant to KRS Chapter 13A and consistent with this code
               governing the purchasing, management, and control of any
               and all supplies, services, and construction, and other items
               required to be purchased by the Commonwealth. The
               secretary shall consider and decide matters of policy with
               regard to state procurement. The secretary shall have the
               power of review with respect to the implementation of
               regulations and policy determinations.20

      17   KRS 45A.020(1).
      18   KRS 42.012.
      19   KRS 45A.030(3).
      20   KRS 45A.035(1).

                                             9
The KMPC thus makes the Finance and Administration Cabinet directly responsible

for the promulgation of regulations for procurements by the Commonwealth.21

Consequently, “[n]o purchase or contract shall be binding on the state or any agency

thereof unless approved by the Finance and Administration Cabinet or made under

general administrative regulations promulgated by the cabinet.”22 Suffice to say, our

General Assembly saw fit to give the Finance and Administration Cabinet and its

Secretary a great deal of authority over procurements made by the Commonwealth

under the KMPC.23

      21 See also KRS 45A.045(2) (“The Finance and Administration Cabinet shall
recommend regulations, rules, and procedures and shall have supervision over all purchases
by the various spending agencies, except as otherwise provided by law, and, subject to the
approval of the secretary of the Finance and Administration Cabinet, shall promulgate
administrative regulations to govern purchasing by or for all these agencies.”).
      22 Id.
      23  See also, e.g., KRS 45A.230 (“Prior to the institution of any action in a court
concerning any contract, claim, or controversy, the secretary of the Finance and
Administration Cabinet is authorized, subject to any limitations or conditions imposed by
regulations, to settle, compromise, pay, or otherwise adjust the claim by or against, or
controversy with, a contractor relating to a contract entered into by the Finance and
Administration Cabinet on behalf of the Commonwealth or any state agency, including a
claim or controversy based on breach of contract, mistake, misrepresentation, or other cause
for contract modification or rescission, but excluding any claim or controversy involving
penalties or forfeitures prescribed by statute or regulation where an official other than the
secretary of the Finance and Administration Cabinet is specifically authorized to settle or
determine such controversy.”); KRS 45A.235 (This section shall apply to a claim or
controversy arising under contracts between the Commonwealth and its contractors. If such
a claim or controversy is not resolved by mutual agreement, the secretary of the Finance and
Administration Cabinet, or his designee, shall promptly issue a decision in writing….The
decision shall be final and conclusive unless fraudulent, or unless the contractor sues
pursuant to KRS 45A.245.”); and KRS 45A.285 ((1) The secretary of the Finance and
Administration Cabinet, or his designee, shall have authority to determine protests and other
controversies of actual or prospective bidders or offerors in connection with the solicitation or
selection for award of a contract. (2) Any actual or prospective bidder, offeror, or contractor
who is aggrieved in connection with the solicitation or selection for award of a contract may
file a protest with the secretary of the Finance and Administration Cabinet. (3) The secretary
of the Finance and Administration Cabinet shall promptly issue a decision in writing. (4) The
                                               10
      It follows, then, that the Secretary’s mandate to at all times protect the

financial interests of the state, and his wide-reaching authority over procurements

made by the state, would bring a possible violation of the KMPC well-within his

authority to investigate.

      Lassiter further argues that the Secretary’s asserted interpretation of the

statutes confers upon him a subpoena power that is too broad. But our case law has

previously supported broad investigatory powers, more commonly referred to as

“powers of original inquiry,” for administrative bodies charged with upholding the

laws of the Commonwealth.

      For example, in Commonwealth ex rel. Hancock v. Pineur, this Court addressed

the power of the Attorney General to issue an “investigative demand” under KRS

367.240 to an officer of four corporations that sold mobile homes in Kentucky.24 In

particular, “whether there is either a statutory or constitutional requirement that a

demand authorized by KRS 367.240 recite on its face the reason or grounds for its

issuance[.]”25

      This Court began by noting that under KRS 367.240 the Attorney General

could “execute and cause an investigative demand to be served in either one of two

instances.”26 First, if he “has reason to believe that a person has engaged in, is

engaging in, or is about to engage in any act or practice declared to be unlawful by

decision by the secretary of the Finance and Administration Cabinet shall be final and
conclusive.”).
      24   533 S.W.2d 527 (Ky. 1976).
      25 Id. at 528.
      26  Id.

                                             11
KRS 367.110 to 367.300 (Kentucky’s Consumer Protection Act statutes)” or “when he

believes it to be in the public interest that an investigation should be made to

ascertain whether a person in fact has engaged in, is engaging in or is about to

engage in, any act or practice declared to be unlawful by KRS 367.110 to

367.300[.]”27

      To address the power of the Attorney General to issue investigative demands,

this Court relied heavily upon the seminal case of United States v. Morton Salt Co.,28

which it identified as a “living bible” on “matters concerning the implementation of

the investigative powers of administrative agencies.”29 It then went on to quote

extensively from Morton Salt.30 The most pertinent of which for our purposes is the

following:

                 [t]he only power that is involved here is the power to get
                 information from those who best can give it and who are
                 most interested in not doing so. Because judicial power is
                 reluctant if not unable to summon evidence until it is shown
                 to be relevant to issues in litigation, it does not follow that
                 an administrative agency charged with seeing that the
                 laws are enforced may not have and exercise powers of
                 original inquiry. It has a power of inquisition, if one
                 chooses to call it that, which is not derived from the judicial
                 function. It is more analogous to the Grand [Jury], which
                 does not depend on a case or controversy for power to get
                 evidence but can investigate merely on suspicion that the
                 law is being violated, or even just because it wants
                 assurance that it is not. When investigative and
                 accusatory duties are delegated by statute to an
                 administrative body, it, too, may take steps to inform

      27   Id.
      28   338 U.S. 632 (1950).
      29   Pineur, 533 S.W.2d at 529.
      30 Id.

                                               12
                 itself as to whether there is probable violation of the
                 law.31

Accordingly, this Court upheld the Attorney General’s issuance of the investigative

demand, noting that while KRS 367.240 required that one of its two conditions be

present, “nowhere does it say or imply that the condition must be recited on the face

of the demand.”32

      In a more recent case, Dolomite Energy, LLC v. Commonwealth Office of

Financial Institutions, the Court of Appeals addressed the validity of a subpoena

issued by the Commonwealth’s Office of Financial Institutions, Division of Securities

(Commonwealth), to Dolomite Energy, LLC (Dolomite) because it suspected Dolomite

had violated KRS Chapter 292, Kentucky’s Uniform Securities Act.33 Dolomite’s

primary claim was that the Commonwealth’s investigative subpoena exceeded the

Commonwealth’s authority.34 Dolomite argued that, although it was located in

Kentucky, it did not solicit or do business with Kentucky residents, and therefore the

Commonwealth had no power to issue subpoenas to it.35

      The Court of Appeals began by noting that the General Assembly’s purpose for

passing KRS Chapter 292 went beyond merely protecting Kentucky investors, and it

was therefore applicable regardless of whether a customer of Dolomite was a

      31 Id. (emphasis added).
      32   Id. at 528.
      33   269 S.W.3d 883 (Ky. App. 2008).
      34 Id. at 885.
      35  Id.

                                             13
Kentucky resident when they did business with Dolomite.36 The court then noted

that

                  the Commonwealth bears the responsibility of supervising
                  the sale, purchase, or the offer to sell or purchase securities
                  in the Commonwealth. As a part of its supervisory
                  responsibility, the Commonwealth also has broad
                  authority to investigate potential violations of the
                  Kentucky Securities Act. Under KRS 292.460(2), the
                  Commonwealth has the power to “administer oath [sic] and
                  affirmations, subpoena witnesses, compel their attendance,
                  take evidence, and require the production of any books,
                  papers, correspondence, memoranda, agreements, or other
                  documents or records which the executive director deems
                  relevant or material to the inquiry.”37

It then echoed both Pineur and Morton Salt by stating that

                  [e]ven if one were to regard the request for information in
                  this case as caused by nothing more than official curiosity,
                  nevertheless law-enforcing agencies have a legitimate
                  right to satisfy themselves that corporate behavior is
                  consistent with the law and the public interest...[It] is
                  sufficient if the inquiry is within the authority of the
                  agency, the demand is not too indefinite and the
                  information sought is reasonably relevant.38

The Court of Appeals consequently held that the Commonwealth had the power to

issue the subpoena because its request was within its authority, the demand was not

too indefinite, and the information sought was reasonably relevant to its inquiry.39

And, because “the broad powers granted to the Commonwealth not only protect

Kentucky investors but also serve to preserve the reputation of legitimate Kentucky

       36 Id.
       37 Id. at 886 (internal citations omitted).
       38 Id. (emphasis added).
       39 Id. at 886-87.

                                                  14
companies and maintain national and international confidence in the Kentucky

market.”40

      In this case, as discussed supra, the Secretary has been tasked with protecting

the financial interests of the state, a duty of such importance that is difficult to

overstate. This responsibility also includes being responsible for all procurements

under the KMPC, the purposes of which, among other things, are:

               (d) To provide for increased public confidence in the
               procedures followed in public procurement;

               (e) To insure the fair and equitable treatment of all persons
               who deal with the procurement system of the
               Commonwealth;

               (f) To provide increased economy in state procurement
               activities by fostering effective competition; and

               (g) To provide safeguards for the maintenance of a
               procurement system of quality and integrity.41

All of which are certainly no less important than the purposes of Kentucky’s

Securities Act as identified in Dolomite.

      To fulfil these duties, the General Assembly conferred powers of original inquiry

to the Secretary that are substantially similar to that of the Office and Financial

Institutions in Dolomite. Namely, under KRS 45.142—which is entitled “Enforcement

of laws; investigation procedure”—to “administer oaths, certify to official acts, issue

subpoenas, compel the attendance of witnesses and the production of testimony

touching any subject properly under investigation by them, and…compel the

      40   Id. at 887.
      41   KRS 45A.010.

                                             15
production of books, papers, and accounts.”          Accordingly, because the Finance

and Administration Cabinet is an administrative agency responsible for ensuring the

KMPC is followed, and has been armed with the tools necessary to fulfill that duty, it

has every right to use those tools to “take steps to inform itself as to whether there is

probable violation of the law.”42 This is, of course, so long as “the inquiry is within

the authority of the agency, the demand is not too indefinite and the information

sought is reasonably relevant.”4344

      After review of the subpoena issued in this case, it appears to have satisfied the

foregoing standard. However, we leave that determination to the sound discretion of

the trial court on remand. We would further note that, as with all subpoenas issued

in any context, the judiciary provides a solid backstop for any potential overreaches

by the Secretary or any other agent of the government in issuing them:

               The court, upon motion made promptly and in any event at
               or before the time specified in the subpoena for compliance
               therewith, may (a) quash or modify the subpoena if it is
               unreasonable and oppressive or (b) condition denial of the
               motion upon the advancement by the person in whose behalf
               the subpoena is issued of the reasonable cost of producing
               the books, papers, documents, or tangible things.45

      42   Pineur, 533 S.W.2d at 529.
      43   Dolomite, 269 S.W.3d at 886.
      44  In addition, implicit in this test is the requirement that investigations should be
undertaken in good faith. See, e.g., United States v. Powell, 379 U.S. 48, 57-58 (1964)
(holding that investigations by the Commissioner of the Internal Revenue Service into
potential tax fraud must be conducted pursuant to a legitimate purpose, that the inquiry
may be relevant to that purpose, that the information is not already within the administrative
body’s possession, and that the appropriate administrative steps have been followed). The
Powell court noted that an abuse of subpoena power would occur “if the summons had been
issued for an improper purpose, such as to harass the [recipient] or to put pressure on him
to settle a collateral dispute, or for any other purpose reflecting on the good faith of the
particular investigation. Id. at 58.
      45   Kentucky Rule of Civil Procedure 45.02.

                                              16
      Based on the foregoing, we hold that the subpoena powers of the Secretary of

the Finance and Administration cabinet extend to suspected violations of the KMPC.

B.    The Secretary has the power to subpoena non-government
      employees as part of an investigation into a possible violation of the
      KMPC.

      Lassiter next asserts that, even if the Secretary’s authority to issue subpoenas

extends to investigations of KMPC violations, the Secretary may only issue subpoenas

to current state government employees. Therefore, because Lassiter is no longer a

state government employee, the Secretary has no authority to issue a subpoena to

him. Again, we disagree.

      Before addressing the merits of Lassiter’s argument, it will be helpful to make

some preliminary comments about the components of KRS 45.142. As we have

already noted, KRS 45.142 reads in pertinent part:

            For the purpose of enforcing the provisions of this chapter
            and those sections of KRS Chapters 41, 45, and 48 relating
            to the state budget and financial administration, the
            secretary of the Finance and Administration Cabinet…for
            [his] respective [branch] of government…shall have free
            access during business hours to all books, reports, papers,
            and accounts in the office or under the care or control of any
            budget unit of [his] respective [branch] of government, and
            may administer oaths, certify to official acts, issue
            subpoenas, compel the attendance of witnesses and the
            production of testimony touching any subject properly under
            investigation by [him], and may compel the production of
            books, papers, and accounts.

We agree with the Court of Appeals’ conclusion that this statute gives the Secretary

two distinct powers of investigation. The first is the “free access” power. It gives the

Secretary free access to “all books, reports, papers, and accounts” of any budget unit

in the Executive Branch. The second, are powers of original inquiry: to “issue
                                           17
subpoenas, compel the attendance of witnesses and the production of testimony”

and, most notably, “compel the production of books, papers, and accounts.”

      Lassiter insists that because the free access power applies only to budget units

of the Executive Branch, the powers of original inquiry must also only apply to

budget units of the Executive Branch. But this reading of the statute would render it

redundant, and would therefore work an absurd result, which we must assume the

General Assembly did not intend.46 If the Secretary already has free access to

“books, reports, papers, and accounts” in the possession of budget units within the

Executive Branch, why would he need to “compel the production of books, papers,

and accounts” from those budget units via subpoena? Clearly, the powers of original

inquiry were granted to the Secretary so that he could, as due diligence requires,

gather information from any source he believes may have evidence pertinent to a

subject properly under his investigation. Particularly in the context of KMPC

contracts where the state is contracting with non-government entities, it defies

common sense to say that the Secretary can only gather information from state

employees and not from the non-government entities that might have been party to

allegedly illegal contracts and therefore would almost certainly have valuable

evidence in regard to that investigation.

      Lassiter further points to KRS 45.990(1), the “Penalties” provision of KRS

Chapter 45, which reads:

               [a]ny officer, agent, or employee of any budget unit who
               willfully fails or refuses to comply with any of the provisions
               of KRS 45.011 to 45.031, 45.121, 45.142, 45.151, 45.242,

      46   Rice, 492 S.W.3d at 564.

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                 45.244, 45.251, 45.253, 45.305, or 45.313, or who expends
                 any money in violation of any of the provisions of those
                 sections, shall be subject to prosecution in the Franklin
                 Circuit Court, and upon conviction shall be guilty of a
                 violation.

Based on this, he asserts that the subpoena power could only be directed at an

“officer, agent, or employee of any budget unit.” But our duty when interpreting KRS

Chapter 45 is to consider it as a whole and give meaning to each of its constituent

parts.47 Thus, when comparison of this statute is made to KRS 45.142, it is clear

that this enforcement provision does not identify the scope of the subpoena power.

      KRS 45.142 authorizes the Secretary to seek judicial enforcement against “any

person [who] fails to comply with the order of, or to obey a subpoena issued by

[him]…or refuses to testify as a witness to any matters regarding which he may be

lawfully interrogated.” The statute further provides that the Secretary’s recourse in

the event that someone refuses to comply is to have a

                 judge having jurisdiction of the person to whom the order or
                 subpoena was issued…compel obedience by proceedings for
                 contempt as in the case of disobedience of a subpoena or
                 order issued from such court or a refusal to testify therein,
                 and…adjudge such person guilty of contempt of court and
                 punish him as provided by law in other contempt cases.

In contrast, KRS 45.990 applies solely to officers, agents, or employees of a budget

unit that willfully fail or refuse to comply with a number of listed statutes. In that

event, the employee can only be found guilty of a violation,48 not held in contempt of

      47   Id.
      48  “Offenses are either felonies, misdemeanors, or violations: (3) Offenses punishable
by a fine only or by any other penalty not cited herein, whether in combination with a fine or
not, are violations.” KRS 431.060.

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court. Further, said employees must be prosecuted in Franklin Circuit Court, not in

any court of the Commonwealth “having jurisdiction of the person to whom the order

or subpoena was issued.” Accordingly, we cannot hold that KRS 45.990 has any

bearing on whom may be issued subpoenas under the Secretary’s investigative

authority.

      As a final note, we agree with the Secretary’s argument that Lassiter’s

interpretation would allow a state employee to “embezzle from the Treasury on

Monday, resign on Tuesday, and claim to be immune from questioning on

Wednesday” simply because he or she is no longer a state employee. This would not

only be absurd, but it would also severely handicap the Secretary’s abilities to fulfil

his duties as the protector and overseer of the Commonwealth’s financial well-being.

We therefore hold that the Secretary’s subpoena power extends to non-government

employees as long as the subpoena “[touches] any subject properly under” his

investigation and is otherwise proper.

                                 III.   CONCLUSION

    Based on the foregoing, we affirm and remand for proceedings consistent with

this opinion.

      All sitting. All concur.

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COUNSEL FOR APPELLANT:

J. Guthrie True
True Guarnieri Ayer, LLP

COUNSEL FOR APPELLEE:

Samuel R. Flynn
Labor Cabinet

Brian C. Thomas
Kentucky Retirement Systems

Hiren B. Desai
Finance and Administration Cabinet

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