After Lunsford ad, Fischer revives Vencor charges

Shortly after Democratic Senate candidate Bruce Lunsford released a television advertisement touting his business credentials this morning, his primary opponent’s campaign fired off a press release harkening back to charges of impropriety at some of Lunsford's businesses.

In Lunsford's newest ad - entitled "Real World" - he remarks that he "helped grow a small business from three employees to 62,000,” referring to the current size of the workforce at Lunsford’s four companies: Vencor, Ventas, Kindred, and Atria. In response to this claim, Greg Fischer’s campaign issued an afternoon release highlighting news coverage of past controversy at Vencor and Ventas – health service providers founded by Lunsford.

"The Lunsford campaign slogan of change rings hollow when he can't even talk straight to voters in his television advertising. Just like Bruce Lunsford's shareholders who lost everything in his companies, voters of Kentucky just can't trust Bruce Lunsford," said Fischer's campaign manager A.J. Carrillo in the release.

Purporting to be a "fact check" of Lunsford's advertisement, the Fischer campaign resurrected the Vencor controversy via clippings from three 2003 news stories.

According to documents from the Department of Justice, in 2001 Vencor was ordered by the Federal Government to pay $104.5 million “to resolve civil claims that Vencor knowingly submitted false claims to Medicare, Medicaid, and TRICARE, the military's health care program.” The settlement was part of Vencor’s reorganization after the company filed for bankruptcy in 1999.

In their release, the Fischer campaign cites a May 13, 2003 article from the Louisville Courier-Journal to argue the settlement was for “defrauding Medicare, Medicaid, and TRICARE” and claim Lunsford initially referred to the settlement as part of a “billing dispute.”

The Fischer release quotes from an April 20, 2003 column by University of Kentucky Law Professor Christopher W. Frost in the Lexington Herald-Leader to allege bankruptcy proceedings were manipulated by Lunsford.

"Frost wrote the deal to split Vencor and Ventas was, ‘engineered to permit Lunsford and others to toss Vencor into bankruptcy court, wiping out hundreds of millions of dollars in claims, while preserving their ownership interests in the profitable real estate,’” read the release. “Frost said the result was that, ’the shareholders of Vencor lost nearly everything and Lunsford remained one of the richest men in Kentucky.’"

The Fischer camp also cited a Herald-Leader article from April 27, 2003 and the same May 13, 2003 Courier-Journal to argue that "a 1999 GAO report suggested that Lunsford, not changes in Medicare reimbursements, caused many of the company's financial problems."

Carillo said the references to Lunsford's history were meant to "set the record straight" and put Lunsford's claims in the advertisement "in the context of [Lunsford's] shady business history."