2009 Public Officials of the Year

Interview

Q&A: Crit Luallen

Crit Luallen (full profile) worked for six governors of Kentucky before being elected state auditor in 2004. In that capacity, she's not only exposed corruption in both state and local government but also made sure that wrongdoers are prosecuted. Governing Correspondent Jonathan Walters talked with Luallen about her approach to the auditor's job, her remarkable rise in state government and the challenge all governments face going forward. Here is an abridged and edited version of the interview:

So what got you into public service?

In 1974, I went to work on the campaign of Wendell Ford, who at the time was the sitting governor of Kentucky and running for the U.S. Senate. I started out working in the mail room, the absolute bottom rung of the ladder. But Ford was the kind of man who was a mentor to everyone who worked for him, and he would stop by and talk to us about his hopes and dreams as a public official, and then ask us about our plans for the future. He made us think about public service as an option and as an opportunity to make a difference.

So from the mail room of a political campaign you have moved up into some of the highest appointed and elected positions in the state. What's that been like in a state not exactly known for encouraging women to be active in politics?

I was personally prepared to enter the fray as a woman in what had been a male-dominated world because of the way I was raised. I was raised with five older brothers on a farm outside of Frankfort. It never occurred to me that there was anything those boys could do that I couldn't do. That helped me when I jumped into the political arena because I never had any doubts about whether I could perform in a comparable way as a man might in any office.

Besides Wendell Ford, were there other Kentucky politicians who inspired you?

Well, I've ultimately worked with six different Kentucky governors, but another one who made a real difference to me was Martha Lane Collins, the first and only female governor ever to serve in Kentucky. She ran against the tide of a good-old-boy establishment that thought a woman could never be elected in this state. And she taught me a lot about what it means to be a strong woman in the political arena, and to have to constantly be a step ahead, to think smarter and work harder to succeed. That was an important time early in my career and very helpful to be close to her and watch her in action.

So from there, you held cabinet positions in parks and economic development and then finance and administration before moving to the top cabinet spot under Governor Paul Patton. What were you learning about leadership and being a leader as you moved up through these positions?

There are a couple of basic tenets of leadership that I think are key. One is that you have to have deeply held personal values that you adhere to in every decision you make. And if you do that time and again, you ultimately build a reputation of credibility; you become a leader who is known for fairness and competence. Those are basic core principles that have guided me along the way. The other thing that's always been critical to my leadership success is that I put great value on recruiting the best people I can find to be around me.

That, of course, is a huge issue in state and local government these days — finding good people willing to serve in really difficult jobs. How do you do that?

I try to use the same pitch that has been successful when it comes to my own decision to work in government: There may be places where you can make more money, have more perks and live a different lifestyle, but this is where you can make a real difference in people's lives and communities.

So that's what has kept you in public service as long as you have?

I've had opportunities to leave public service. In fact, I was offered a job as president of the combined chamber of commerce and economic development agency in Louisville, where the salary was going to be more than twice what I was making in state service. I thought long and hard about that, but in the end I realized I could never feel as satisfied as I do in state service when we do something right or something well that really makes a difference.

For example?

That job opportunity in Louisville came shortly after a very successful legislative session during which I had helped Governor Patton pass a comprehensive and historic educational reform package. As I thought about leaving state service, I remembered standing on the capitol steps as he signed that legislation, and I can remember thinking I could never feel as satisfied as I feel now, no matter how much money I might make.

Other important accomplishments while you were secretary of the cabinet?

I headed up an effort called EMPOWER Kentucky, which was our effort to streamline state government and implement efficiencies in order to free up money to invest in things like our higher education reform initiative. We identified $600 million in recurring savings through a number of business process reengineering efforts.

Lots of states have tried to do that with varying degrees of success. What made your effort so successful?

We viewed it as a bottom-up approach. We recruited teams of state employees and did mapping of the bigger and higher dollar processes in government and tried to get the employees involved at the ground level to identify where they thought there were unnecessary steps involved, and we had some very rewarding experiences.

I remember a woman down in the bowels of the procurement branch of the finance cabinet, and we began to do a business process mapping exercise to figure out how many steps it took to buy a chair. This woman stood up and said, “I could have told you 10 years ago how many steps it took to buy and chair and how many we could cut out but nobody ever asked me!” So we took a process that involved 120 steps and boiled it down to 10.

We also redesigned things like the permitting of coal mining operations. We discovered that we were producing and distributing piles of documents literally 10 to12 feet high, and shifting those around and copying them and then copying them some more. We took that and made it all electronic and found out that many of the steps weren't any longer necessary; they'd just been added over time and nobody could even remember why.

Well, we're certainly seeing a resurgence in discussion about efficient government these days, aren't we?

Yes, that's a point that's very relevant today as states find themselves with the biggest budget problems they've had in generations. I know that Kentucky just went through another round of budget cuts totaling $1 billion. But what happens is that the cuts are across-the-board, and that's not an effective way to improve efficiency. You're hitting the much needed and critical services in some agencies, and then cutting the same percentage in agencies that may actually be harboring a greater amount of waste. The problem is that in this budget climate, we don't have the luxury of doing the sort of sophisticated management studies that would allow us to cut smarter.

But in a fundamental way, that's what the auditor's office should be doing now through performance audits, right?

Our main role is still financial audits, but we do have eight full-time staff doing performance auditing work out of about 135 total staff. We do form special teams, though, when we need to address particular hot issues. We can bring in financial auditors and put them on special performance audit teams.

Do you have a good example of where that's worked particularly well?

We did a significant performance audit on our county jails, which have become an increasing drain on local governments across the state. In the course of that audit, we found that the cost per diem of an inmate in a Kentucky county jail ranges from $18 a day to $84 a day, so we could see right away that there was room for improvement. What we realized was that they were all being run without any standards for financial management or without any basic criteria on how spending was being tracked. There were no best practices being employed on how to save money. So we did an exhaustive analysis of every single jail in the state and put our conclusions in terms of how the more poorly run jails could learn from the better-run jails. The idea is that if we got everyone to arrive at some reasonable average cost that the savings potential would be huge.

How has your past experience in government in appointed positions helped you as an elected auditor?

When I took this office, I had more financial management experience than anyone who had ever run for this job, which speaks to the fundamental role of this office, which is auditing state and county government. But I had also worked at all these other jobs in overseeing different aspects of government, so I'm able to bring the additional perspective to bear on the part of our office where we can initiate and use our own discretion to do performance audits.

So, your performance audits have helped lead to important progress in some key policy areas. I understand that your financial audits, on the other hand, have gotten some fairly high-level political actors in some trouble.

We have been very aggressive during my tenure at going after corruption. I believe strongly that Kentucky is a state that has had a series of historic challenges that have held us back. Among those is our lack of educational attainment, and that is over-arching. It's why we suffer some of the worst health-care statistics in the nation around things like cancer rates and lung and heart disease. Meanwhile, 15 percent of our citizens are without health insurance and have lower per-capita incomes here than most states in the nation. But if you step back and look at the big picture, something that has always held us back is public corruption, especially in certain rural areas of Kentucky

Your political roots in Kentucky run deep. Isn't it hard for you politically to take on these high-level corruption cases?

I came to this office with the conviction that I would use every resource at our disposal to go after that corruption, wherever it existed without any regard to the political fallout. To that end, I also forged a partnership with the office of the attorney general, the FBI, the state police and the U.S. attorney's office. We have monthly meetings with them because it's not enough to just do an audit and hand it off to someone and have it disappear down a black hole. You need this partnership with law enforcement to ensure that an audit will lead to a case that will really move through the process. We have referred a record number of these types of cases where we believe there is wrongdoing, and of the 120 cases we've referred we've now seen 18 public officials prosecuted. Now that's not a number we're proud of. As a Kentuckian, I'm concerned that we still have these pockets of abuse.

Why do you view political corruption as a root cause of some of the state's larger problems?

Because it holds us back. It's hard to encourage good people to step up and run for office when they believe that this pattern has been established over time and it can't be broken. The only way you break it is to expose that pattern, expose these problems and take them through a full investigation and prosecution.

So in a state that has something of a storied history of political corruption, how have you kept your moral compass straight as you moved into positions of more and more power?

When I was young and I worked my way up through the process, I earned my stripes along the way. But at every step I was very careful to treat people fairly, to be totally honest and straightforward with people, and to develop a level of competence for the jobs I held that earned people's respect.

And how did that help you with your run for auditor?

When I got into that campaign, I found that all those years of having worked hard and of being responsive to people served me well as a candidate. I had never let a phone call go unreturned. I had never failed to get back to people. I had been fair to everyone who had ever come to me or worked with me. From all those jobs I'd held, I had built a network of people who were willing to help me run for office. I was able to assemble a committee of people who were willing to raise money and help me and support me because I had in some way touched them during my years of service. As finance secretary, I might have helped them get funding for their local convention center. As arts commissioner, I might have helped them with their theater grant. So I had a reservoir of credibility because I had worked hard over the years to be responsive to people.

It sounds like you believe elected officials should put in some time in the trenches before running for office.

I think people too often try to jump into politics from the sidelines, and they haven't developed that credibility that they need to be successful, and they expect it to be granted to them automatically just because they feel they deserve it. I worked very hard to succeed at every level so that I could get to the next stage, and that really served me well when I decided to run for office in 2003.

So you've spent virtually your entire professional life working in government. What's the toughest decision you've ever had to make as a public official?

You might remember that Governor Paul Patton went through a sex scandal that tainted the last two years of his administration. At the time I was managing a very talented, committed cabinet, and we had just achieved the goal that the governor and I had both worked on: that for the first time in Kentucky's history we would have a cabinet that was half female. These were terrific people and dedicated public servants. We were about three or four months away from the legislative session, and we were in the throes of preparing the budget and our legislative agenda when the scandal broke. I was terribly disappointed and felt that I had been misled. Everyone's reputation around the governor was suddenly caught up in his personal problems. On the one hand, I wanted to separate myself from that; on the other hand, I felt I had an obligation to continue to lead this effort forward. So I stayed three months after the scandal broke to help try to stabilize the cabinet, and help get our budget and our legislative package ready for the session. And then I resigned, because I just felt that my effectiveness was diminished by the total overwhelming focus on the scandal.

What's been the toughest thing about being an elected official versus an appointed official?

What I am concerned about in making the transition from appointed leader to elected leader is how much money you have to raise in today's political environment to be successful. When I ran in the wake of the Patton scandal, I was fighting for my political life. I had to separate myself from the governor, run for an office on my own record of achievement, and I had to raise $800,000, and I still only won by 2 percentage points.

My point is that this is an additional challenge today in public leadership. It's not as simple anymore as doing a good job and telling people about it. You have to be very adept at modern political campaigning, and the biggest challenge to that is you have to have the money to be effective in getting your message out. Sometimes the people who are the best public servants, who are the best public policy people, don't have that good combination of other skills that you need to get elected. And conversely, those who have those fund-raising skills may not be the best public servants. So I'm very troubled by the fact that we've become so reliant on money in politics.