The Blog

Go to for Don McNay's column and other articles.

Sunday, September 25, 2005

Bureaucrats Gone Wild

Bureaucrats Gone Wild.


You see stories about how China’s economy is growing while America’s  is not.


I have never been to China but will bet they don’t have as many bureaucratic rules as we do.


Especially in the school systems.


I’m embarrassed that an example of bureaucrats gone wild occurred in my  native county,  Kenton County, Kentucky.


The Cincinnati Enquirer told  the story of a  brilliant pre school student.  The schools  gave her a test to skip kindergarten.   She passed it.


Since she didn’t need kindergarten, he parents sent her directly to the first grade.


The Kenton County public school system sent her parents a bill for $3000. 


The bureaucrats want her parents to pay for the grade that she skipped.


There are several things wrong with this story.


 The first is that she is going to a PUBLIC school.  When did PUBLIC schools start charging tuition?   If they are trying to make a profit, will they give me some of my tax money back?  


It is not just about the money.


The bigger issue is that bureaucrats could be screwing up this girl’s life.  Children need to be challenged, especially brilliant children.  


Dumping the student in a class beneath her abilities will bore her and could turn her off to school forever.


 We might waste a talent that could someday cure cancer or be President.


The fire she is showing in childhood could be doused by idiots following a stupid rule.


The paper pushers are not only enforcing  a terrible  rule, they don’t understand the rule they are trying to enforce.


State Representative Harry Moberly, who wrote the law the bureaucrats are citing, said the school board interpretation was wrong and told the Enquirer that the parents should hire a lawyer.


I hope they do.  


I know most of the good trial lawyers in Kentucky.    If the parents call me at 1-800 Mr. McNay, I will put them on to several lawyers who would take the case.


I might even chip in on the legal fee.   I won’t chip in for the tuition.   The PUBLIC school system should not have charged it and I hope the parents don’t pay it.


I don’t know the parents but they live in a nice neighborhood.  They can probably afford $3000. 


What would have happened if the bureaucrats pulled the stunt on a poor child that lived in a housing project?  What would have happened if the child did not have parents with enough savvy to contact their legislators and the media? 


A brilliant mind could be wasted.   The bureaucrats would have won.


Moberly said he might fix this problem in the next legislature session and I am sure he will.  He understands that education is about pushing forward and not holding back.


I am angry that it got this far.  Every person at the school board and in the school system should be working to get the child the best education she can possibly get. 


I thought that was what school was all about.


If I were running the school system, I would have put her in the first grade at all cost. Even if I had to tear up the rule book.


 If some paper pusher told me I was violating an idiotic rule, I would tell them to get a lawyer and sue me.


I think the jury would see it my way.


I am afraid that the incident in Kenton County is a symptom of a nationwide problem.  


 Paper pushers and bureaucrats forget that they are molding the lives of young people and enforce rules that have no meaning, purpose or logical sense.


Other countries aren’t doing that.  That is why they are eating our lunch on the economic front.


I hope the American school system gets it together.  If they don’t, they need to make sure American students learn a new skill:


How to eat with chopsticks.  Their future employers will require it.


Don McNay is President of McNay Settlement Group in Richmond Kentucky where we fight any rule that hurts  people.  You can write to him at or read other things he has written at






Parents of Smart Kids Told to Pay Up

Parents of smart kid told to pay
Kenton County charges tuition for advancing a grade


CRESCENT SPRINGS - The parents of a 5-year-old girl and the Kenton County School District are battling over a $3,000 tuition bill.

It's a situation caught up in bureaucracy that has left the gifted child's academic future in doubt.

John and Shauna Bomkamp's daughter, Alison, is in first grade at River Ridge Elementary School in Villa Hills.

After she was tested twice last winter at a second-grade level by an independent psychologist and River Ridge, Alison's parents decided to have her skip the school's half-day kindergarten this year and start first grade.

She was tested once more during the summer by the district, which told the Bomkamps if Alison qualified to skip kindergarten, there would be a $3,000 tuition bill to place her in a higher grade. Alison passed the test.

"We agreed to have her tested, but we did not agree on the tuition," John Bomkamp said.

Why a $3,000 tuition bill for a public school?

That's about half of what it costs to educate a child in Kenton County for a year, according to Superintendent Susan Cook. But the state only funds districts for half-day kindergarten.

And a 20-year-old attorney general's opinion of the state's primary school program law says if a child "would not be 6 years old until after Oct. 1 (as is Alison's case), the child would be eligible to enroll only in a public school's kindergarten program rather than first grade."

So Alison is attending first grade for a full day, but only half of her education is paid by the state.

"The district is following state statute," said Lisa Gross, spokeswoman for the Kentucky Department of Education. "The law does not give a district flexibility on how a child tests. It's age-specific."

The district appealed to the state board of education, asking for a waiver for Alison. State Sen. Jack Westwood also fought on the family's behalf, but the board denied the request in August.

"One reason the waiver was refused was because it's state law," Gross said. "And because they didn't want to set a precedent."

Westwood said he's not buying the precedent argument.

"I don't think that many kids will test at a higher level each year," Westwood said. "There has to be thinking of what can we do to help this child get the best education."

The Bomkamps say the district has already set a precedent by offering free full-day kindergarten at two of its schools - Piner and Ryland. Cook said it does that because of the location of the schools and because many of the students are classified as at-risk.

State Rep. Harry Moberly, D-Richmond, wrote amendments to the primary school program law in the 1990s and said the attorney general's interpretation was wrong.

He said the Bomkamps should not pay the bill and should hire a lawyer if necessary.

"I don't think they need a waiver," Moberly said. "The tuition is absolutely ridiculous. The law says kids have to be continually evaluated and regrouped in their best interest. The issue is, once enrolled, what are her needs?"

Cook said the district could meet Alison's needs by differentiating her instruction. For example, she could take second-grade reading while in kindergarten. The Bomkamps and Westwood say the district cannot meet all her needs in a half-day.

The family got the bill Sept. 17, about a month after Alison settled into her first-grade class.

Cook said it will probably take a change in the law for the district not to charge the Bomkamps. Moberly said he may look at doing that at the 2006 General Assembly.

But what happens now?

The first tuition installment is due Friday. Cook said she has a paper signed by the Bomkamps before the district tested Alison that says they agreed to the payment.

The Bomkamps say they questioned the legality of the tuition at that time and made a notation on that paper that the tuition issue was still being discussed.

"I'm going to protect my daughter no matter what," Shauna Bomkamp said. "We will fight it tooth and nail."

Will the district remove Alison from first grade if the bill is not paid?

"I would hope that we could work with the family to come to some agreement," Cook said.



Houston Cronicicle Story about Frist

Sept. 24, 2005, 10:29PM

Frist inquiries may raise the stakes

Democrats gain an opportunity to extend claims about GOP ethics into the Senate

Washington Post

WASHINGTON - Two federal inquiries into Senate Majority Leader Bill Frist's stock sales have handed Democrats a chance to broaden their long-stated claim that Republicans push ethical boundaries and focus on laws that help the rich, political analysts say.


Until now, such accusations have centered on the House and White House. House Majority Leader Tom DeLay, R-Sugar Land, has been chastised three times by the chamber's ethics committee, and a Texas grand jury recently indicted a political action committee he had organized. The Bush administration's top federal procurement official, David Safavian, was arrested last week on charges of obstructing a criminal investigation into lobbyist Jack Abramoff, who has close ties to DeLay and other prominent GOP lawmakers.

With the revelation that federal prosecutors and the Securities and Exchange Commission are looking into Frist's sale of hospital stocks shortly before their value fell, Democrats are expanding their ethics accusations into the Senate's GOP leadership ranks.

Activists in both parties agree it is too early to say whether Frist, of Tennessee, engaged in insider trading. But the mere launch of inquiries allows Democrats to claim that Republican leaders operate under ethical clouds.

"It is a drip drip drip," said former House Majority Leader Tony Coelho, a California Democrat who resigned in 1989 following accusations about a loan deal. ''With (President) Bush's numbers down, this could be a very negative thing for the Republicans."

In carefully worded statements, Frist's office has said the senator instructed managers of his "qualified blind trust" in June to sell his family's shares in HCA Inc., the nation's largest hospital chain, founded by Frist's father and brother. A month later, the stock's price dropped 9 percent after the company predicted weakening earnings. It is illegal to trade stocks based on inside information. Frist "had no information about the company or its performance that was not available to the public when he directed the trustees to sell the HCA stock," his office said.

The senator's spokesmen say he sold the stock to avoid conflicts of interest as Congress deals with health care legislation. But for years, Frist rejected arguments that his stock holdings could cause a conflict.

In January 2003, Frist said in a televised interview that his assets were in a blind trust and "as far as I know, I own no HCA stock."

Financial disclosure documents filed with the secretary of the Senate by the trustees show that two weeks before the interview, a trustee notified Frist that HCA stock had been contributed to his trust. Spokesman Bob Stevenson said Saturday that Frist was truthful in the TV interview because the trustee can sell assets at any time without notifying the senator, and therefore on any given day the trust's contents are unknown to him.

Some nonpartisan analysts said the Frist case could fizzle, in legal and political terms, if anything short of insider trading is proved. For one thing, they say, the story has broken at a time when hurricanes are dominating the national news. Moreover, they say, questions of blind trusts and stock transactions may prove too arcane to captivate the average voter.



Don McNay


Good Tennessean Column on Frist

ow can this happen in a place of such wealth?

One thought turned public sympathy into outrage over the abandoning of New Orleans' most vulnerable residents during Hurricane Katrina:

How could this Third World-like tragedy be happening in the most powerful and affluent nation on the globe? And anger was further fueled by the realization that America has spent more than $200 billion and almost 2,000 lives to ensure better lives in Iraq.



Now consider the same scenario here, set against the great wealth that abounds in the health-care industry. Yet our state is denying our most vulnerable citizens help to afford medicines to prolong lives while forcing others to emergency rooms for care that will bankrupt families.

Many working poor Tennesseans are part of the 200,000 TennCare recipients being cut from the program. And several hundred thousand more Tennesseans — including those described by the governor as the sickest — have had the number of prescriptions covered by TennCare reduced to five.

How can our state government expect diabetics to play Russian Roulette with their health, choosing between insulin and assorted medicines to address heart, stroke and kidney conditions besides ulcers on their feet? Skip one, and you're headed to hospital or morgue. Meanwhile:

• Favorite son Dr. Bill Frist is being investigated by the Securities and Exchange Commission for selling his HCA stock before its value plummeted, possibly saving him millions. Yet Frist as Senate majority leader won't bother to intervene in the TennCare crisis.

• BlueCross BlueShield of Tennessee, despite skyrocketing health-care costs, has racked up more than $1 billion in profits to put into its reserves.

• Profits for Nashville-based Caremark rose 57% in the second quarter. Caremark provides drugs to health-care programs and individuals.

• Gov. Phil Bredesen made his fortune in health care, then sold his company. Owners later took it into bankruptcy. Yet with that record, he convinced enough voters he had the expertise to fix TennCare. Now we know the terrible truth. He didn't.

Ultimately, we're being fooled by these health-care profiteers. They tell us costs for drugs and treatment are too high to help working poor Tennesseans. But the same experts — as CEOs and elected officials — still find plenty of cash to make themselves millionaires and their corporations Wall Street darlings.

Like canaries in mines, Tennesseans suffering from TennCare cuts are offering a warning to the rest of us. We're going to get it, too, as more profits are squeezed out for the few at the expense of the many.

Socialized medicine in Canada is not the answer. But the CEO view that the profiteers are trying to sell us like snake oil also is wrong. The corporate view sees nothing wrong in the state hiring 120 lawyers to sit around and do crossword puzzles. They're supposed to be hearing appeals from disenrolled TennCare recipients. So that's $51,000 an attorney annually in taxpayer money for a five-letter word on 54 Down for a "Luau welcome."

Meanwhile, James Bryant of Rutledge died earlier than expected because he couldn't afford $700 for his medicines.

Bredesen imposed a five-prescription limit on people such as Bryant because he believed they were costing the state too much money. But the attorneys are not.

Though of different parties, Bredesen and Frist are part of the same ilk. We must look to new leaders. We'll find them in a special legislative session to address TennCare.

Legislators are the only people left with clout. I've counted 32 so far — 10 senators and 22 representatives — who want a special session. That includes Reps. Sherry Jones and Edith Langster, who called to add their names. I'm told there are more than the 32. There are at least enough to worry the governor. His underlings called every legislator last week about his or her position on a special session.

You must call, too. Ask your lawmakers to support a special session. The TennCare outrage must be stopped now before the cancer of profits ahead of people hits your health plan, too.



Don McNay


SEC, Justice Investigate Frist's Sale of Stock

SEC, Justice Investigate Frist's Sale of Stock

By Jeffrey H. Birnbaum and R. Jeffrey Smith

Senate Majority Leader Bill Frist is facing questions from the Justice
Department and the Securities and Exchange Commission about his sale of
stock in his family's hospital company one month before its price fell

The Tennessee lawmaker, who is the Senate's top Republican and a likely
candidate for president in 2008, ordered his portfolio managers in June
to sell his family's shares in HCA Inc., the nation's largest hospital
chain, which was founded by Frist's father and brother.

A month later, the stock's price dropped 9 percent in a single day
because of a warning from the company about weakening earnings.
Stockholders are not permitted to trade stock based on inside
information; whether Frist possessed any appears to be at the heart of
the probes.

A spokesman said Frist's office has been contacted by both the SEC and
the U.S. attorney's office in Manhattan about his divestiture of the
stock. HCA disclosed separately that it was subpoenaed by the same U.S.
attorney's office for documents that were related to Frist's sale. Frist
and HCA said they are cooperating.

Historians said they cannot recall any other congressional leaders who
have faced federal inquiries into stock sales. Frist has denied any

On Thursday, a Frist spokeswoman said the senator had not discussed the
stock sale in advance with any HCA executives. On Friday, in a statement
from Frist's office, the issue was couched a little differently. It said
the senator "had no information about the company or its performance
that was not available to the public when he directed the trustees to
sell the HCA stock. His only objective in selling the stock was to
eliminate the appearance of a conflict of interest."

According to Frist's office, the senator decided to sell all his HCA
stock -- held in blind trusts managed by two companies for him, his wife
and his children -- on June 13. Under the rules of the trusteeships,
Frist had no control over the timing of the sale, Frist spokeswoman Amy
Call said.

When the company disclosed that its second-quarter earnings would fall
short of Wall Street expectations a month later, the stock price slid
steeply. By that time, Frist's shares had been divested. The managers of
one of the trusts told the senator on July 1 that his holdings had all
been sold; the other trust managers said the shares were gone on July 8.

Frist's financial disclosure statement earlier this year placed the
value of his blind trusts at between $7 million and $25 million.

Separately, documents unearthed yesterday by the Associated Press
showed that Frist was told about stock trades in his blind trust. In
documents filed with the Senate, trustee M. Kirk Scobey Jr. told Frist
in 2002 that HCA stock had been transferred to his trust. Scobey,
reached by phone last night, declined to comment.

The AP said that the documents disclosed that HCA stock worth hundreds
of thousands of dollars was placed into Frist's blind trusts several
other times in 2002 as well. Frist maintained in a television interview
in 2003 that he did not know how much HCA stock he owned, if any.
Spokesmen for Frist did not return phone messages last night.

HCA was founded in 1968 by Frist's father, Thomas Frist, his brother,
Thomas Frist Jr., and Jack Massey, the former owner of Kentucky Fried
Chicken. Frist's brother Thomas is a director and a former HCA chairman.
The senator himself is a surgeon.

Democrats were quick to pounce on Frist's problem. Democratic National
Committee Chairman Howard Dean urged the agencies involved to "fully and
vigorously investigate Frist's suspicious stock trade." He added:
"Republicans in Washington have made their culture of corruption the

"Bill Frist has this all upside down," said Rep. Rahm Emanuel (D-Ill.),
chairman of the House Democrats' campaign committee. "He thought Terri
Schiavo could see and his trust was blind."

Watchdog groups also lashed the lawmaker. Melanie Sloan, executive
director of Citizens for Responsibility and Ethics in Washington, said
she intends to petition the Senate Select Committee on Ethics to look
into Frist's actions and determine whether he ran afoul of ethics rules
involving blind trusts. A spokesman for the committee said the panel
does not disclose whether it is investigating a senator.

In addition, the Foundation for Taxpayer and Consumer Rights urged
congressional leaders to appoint an independent observer "to ensure a
thorough, transparent investigation."

Analysts said that Frist's White House hopes might be harmed by the
probe and that Republicans in general might be penalized politically.
Because few voters know Frist well, learning about him through an
investigation "would not be a good way to be introduced to the American
public," said Stuart Rothenberg of the nonpartisan Rothenberg Political

In addition, Rothenberg said the Republicans that Frist leads could
also be tarnished. The probe "adds to the general Democratic
ammunition," Rothenberg said.

"I do think this hurts his future ambitions, even if he's exonerated,"
agreed Jennifer E. Duffy of the Cook Political Report.

Congressional critics questioned the reason Frist gave for selling the
stock. Senate rules allow lawmakers to divest all of their shares in a
company from a blind trust, but only if they assume new duties and find
that their ownership presents the appearance of a conflict of interest.

Frist has held HCA shares in a blind trust since he came to the Senate
in 1995. He was promoted to majority leader in 2002. Frist regularly
deflected concerns about owning the shares while leading health care
debates by saying he kept them in a blind trust.

"I don't know what new duties he would point to above and beyond
becoming majority leader, and that was three years ago," said Fred
Wertheimer, president of Democracy 21, an ethics advocate.

Call, Frist's spokeswoman, said the stock sale was motivated solely by
the senator's desire to avoid an appearance of conflict, but she could
not cite any published criticism of his HCA holdings after April 2004.

Would you like to send this article to a friend? Go to

Visit today for the latest in:

News -

Politics -

Sports -

Entertainment -

Travel -

Technology -

Want the latest news in your inbox? Check out's
e-mail newsletters:

Washingtonpost.Newsweek Interactive
c/o E-mail Customer Care
1515 N. Courthouse Road
Arlington, VA 22201

(c) 2004 The Washington Post Company

The Not So Blind Trust

The Not So Blind Trust

 “It’s always been a matter of trust

-Billy Joel   

One of the most important  positions in the world  is the Majority Leader in the United States Senate. 

It’s only a few steps from Majority Leader to President.    Lyndon Johnson made it.  Bob Dole and others tried.   

Current Majority Leader Bill Frist has  his eye on the White House.  He may be looking at a stay in the big house instead.

Frist is from an incredibly rich family.  His father and brother founded Hospital Corporation of America (HCA), the nation’s largest hospital chain.   Senator Frist disclosed that he is worth somewhere between $7 million and $35 million.

You won’t find him in the line  to get a payday loan.  

Like many rich people, he owns stock that can make or lose money because of decisions the government makes. 

Most wealthy senators, including Frist, put  their  money in something called a “blind trust.”   They turn their money over to someone else and not supposed to know how it is invested.

I know a lot about blind trusts.  One of my friends ran for Governor of Kentucky several year ago  and asked me to manage  his blind trust if he won.

If I ran through the money, he wouldn’t find out until he got out of office. 

I was honored but stressed.  I would have been  responsible for him and his family.  If I screwed up, his kids did not go to college.

He lost the election but his children will be well educated.

Jimmy Carter did a really stupid thing with his blind trust.  He put Billy Carter, his beer swilling, red neck brother, in charge.

Jimmy lost re-election and  found that  Billy’s shrewd  money management caused Jimmy to be broke and  heavily in debt.  Jimmy had to  start writing books   to get out of hock.

Frist does not have Carter’s problem.  His family knows how to handle money.  The question is whether they know tricks that hurt the public.  

Two possible scandals have erupted for Senator Frist.  The first is that the Senator and HCA are  being investigated by the Securities and Exchange Commission and the Justice Department for possible insider trading. 

 Senator Frist was able to sell its HCA stock right before it dropped 15%.  The Senator was either tipped off or incredibly lucky.

Insider trading is the same thing that Martha Stewart went to jail for.  She went for chump change.  If found guilty, Frist would be looking at a serious sentence.

Company executives have  to sit tight when they have information  that the public doesn’t  know about.   People will not buy stocks if they think the market is rigged.

Friends of Frist say he would not have done something illegal  because he is rich. He does not need the money.

ANYONE accused of insider trading is rich.  It is a crime committed by wealthy  stockholders and their friends at the country club.

You don’t see people on food stamps being accused of insider trading. 

When the Justice Department stops   by HCA  to drop off a subpoena, things are very serious.

Especially since the leaders at Justice were appointed by Frist’s close friend George  W. Bush.

Insider traders have to be stupid  as technology makes it easy to catch them.  If  HCA did wrong, we will know.

A bigger concern is that  Frist’s  blind trust  had a  seeing eye dog, Senator Frist himself.

Numerous documents show  that Frist kept a close eye on his money.  He was actively involved in many of the “blind” trust decisions, including the one to dump the HCA.

The blind trust  seemed to have 20/20 vision.

Along with being greedy, Frist might be a  liar. 

 In a 2003 television interview, he said that “as far as I know, I own no HCA stock.”   Two weeks before that interview, the trustee had given  Frist an update on the  HCA stock he owned.

Frist is in a position that effects every American.   Forget the fact that he is dying to be President,  he has a huge amount of power right now.  

He can use it to help us or use it to line his pocket.   If he is going to stay a United States Senator, he needs to show that he is obeying the law.

It is a matter of trust.

Don McNay is President of McNay Settlement Group where  insider traders need not apply.  You can write to him at or read other things he has written at