Wallace Wilkinson
Wallace Glenn Wilkinson was an American businessman and politician from the Commonwealth of Kentucky. From 1987 to 1991, he served as the state's 57th governor. Wilkinson dropped out of college at the University of Kentucky in 1962 to attend to a book retail business he started. The business rapidly became a national success, and Wilkinson re-invested his profits in real estate, farming, transportation, banking, coal, and construction ventures, becoming extremely wealthy. In 1987, he joined a crowded field in the Democratic gubernatorial primary. After running behind two former governors and the sitting lieutenant governor for most of the race, Wilkinson began to climb in the polls after hiring then-unknown campaign consultant James Carville. Wilkinson campaigned on a promise of no new taxes and advocated a state lottery as an alternative means of raising money for the state. Wilkinson surprised most political observers by winning the primary and going on to defeat his Republican challenger in the general election.
Wilkinson was able to secure passage of a constitutional amendment allowing a state lottery. He also helped craft a significant education reform bill in response to a ruling by the Kentucky Supreme Court that declared the state's entire public school system unconstitutional. Wilkinson's term was plagued by political scandal and an uneasy relationship with the state legislature. He advocated an amendment to the state constitution that would allow him to seek a second consecutive term as governor, but the amendment was defeated in the General Assembly. His wife Martha attempted to succeed him, but withdrew from the campaign amid weak support for her candidacy. Following his term as governor, Wilkinson encountered difficult financial times. In 2001, he was sued by a group of creditors, and during the proceedings, it was revealed that he was operating a Ponzi scheme to keep his businesses afloat. Both he and his wife Martha filed for bankruptcy later that year. In 2002, Wilkinson was hospitalized with arterial blockages. His condition was complicated by a recurrence of Non-Hodgkin lymphoma. He suffered a stroke on July 4, 2002, and his family withdrew his life support the following day in accordance with his previously expressed wishes.
Early life
Wallace Wilkinson was born on a farm in Casey County, Kentucky, about southwest of the city of Liberty, on December 12, 1941. The son of Hershel and Cleo Wilkinson, he had two older brothers and a younger sister. His parents were farmers and also operated a small general store. When Wilkinson was four years old, the family moved to Liberty, and the family opened Wilkinson's Grocery. During his childhood, he delivered newspapers, sold popcorn from a street stand, and co-owned a shoe shine parlor with a boyhood friend. He also accompanied his father to sell produce from the back of a truck. It was during one such trip that he met Martha Carol Stafford, whose parents owned a grocery store about away. The two dated throughout high school and were married in 1960. They had two children: Wallace Glenn Wilkinson Jr. and Andrew Stafford Wilkinson ;Wilkinson was a member of the freshman basketball team at Liberty High School. Using profits from his early business ventures, he purchased a business wardrobe that earned him the title of best dressed member of his senior class. He graduated from high school in 1959, but the poor curriculum there left him without the credits he needed to gain admission to the University of Kentucky's engineering program. He began selling livestock feed in Scottsville, Kentucky, and also worked at a venetian blind factory while taking classes at Campbellsville College to earn the credits he needed. In 1962, he moved to Lexington, Kentucky, and enrolled at the University of Kentucky. While in college, he worked at Kennedy Book Store in Lexington. Later, he and two friends borrowed money to open the Kentucky Paperback Gallery in Lexington; Wilkinson left school later that year to attend to the business full-time. At the time, Kentucky high school students were required to purchase their own textbooks, but there was no marketplace for buying and selling used books; Wilkinson's business catered to this market and was highly successful.
Business ventures
Wilkinson opened Wallace's Book Store in June 1965 after a local stockbroker helped him raise the initial capital needed through a public stock offering. By this time, Kentucky had adopted free textbook legislation at the behest of Governor Julian Carroll, so Wilkinson transitioned to selling college textbooks to students at the University of Kentucky. Throughout the 1960s, Wilkinson refused to pay the state sales tax on his transactions; he and Joe Kennedy, the owner of Kennedy Book Store, both claimed that paying the tax put them at a competitive disadvantage with the university's book store, which did not pay state taxes because it was operated by the university, a tax exempt entity. In 1977, the state Board of Tax Appeals ruled that all three bookstores should have been paying the tax, but by this time, the statute of limitations had expired, and none of the three were required to pay any back taxes. Wallace's Book Store continued to expand rapidly, opening retail stores in twenty-eight states and becoming one of the country's largest book firms. In January 1971, he considered issuing more stock to raise capital to buy Providence, Rhode Island–based Barnes & Noble, but the executive committee of Wallace's was averse to purchasing a company so far away and blocked the move. In April 1977, Wilkinson was cited for false and misleading advertisement in conjunction with claims made in radio ads for Wallace's Book Store claiming they were offering the first discounts in history on new college textbooks. In a court filing, Wilkinson admitted the claims were untrue, promised to stop airing the ads, and agreed to refund any money overpaid by customers.With the success of his chain of bookstores, Wilkinson pursued other business ventures in the fields of real estate development, farming, transportation, banking, coal interests, and construction. He purchased several private aircraft to help him tend to his diverse interests throughout the state, and in 1973, created Wilkinson Flying Service to keep the planes busy when he wasn't using them. After investing in the unfinished Bluegrass Commerce Center in Lexington in early 1977, he purchased one-third interest in the Purcell building on Lexington's Vine Street later that year. The building was only partially occupied, but had become more valuable because of the opening of nearby Rupp Arena in October 1976 and a new Hyatt hotel in May 1977. Developers Donald and Dudley Webb developed plans to construct the Vine Center on the block; by May 1979, they had options to buy every property on the block except Wilkinson's interest in the Purcell building. Unwilling to meet Wilkinson's asking price, they instead formed a partnership with him to co-develop the Vine Center. When Wilkinson eventually sold his interest in the venture at the end of 1981, he turned a profit of at least $1.3 million on his investment. Next, he formed a public-private partnership with the city of Lexington to construct the Capital Plaza Hotel in 1983. The city provided $3 million in capital and another $8.5 million in guaranteed loans to supplement Wilkinson's $1.15 million investment. Wallace's Book Stores was given 95% ownership in the hotel, allowing the company to shield $2 million in assets from federal income taxes and claim over $400,000 in tax credits.
Despite playing a major role in the Lexington real estate market, Wilkinson was fiercely protective of his privacy; for a time, he even refused to allow newspapers to publish pictures of him. His public profile began to rise when he announced plans to construct the 50-story World Coal Center on the corner of Main and Limestone streets in Lexington. When completed, it would be the largest office complex between Atlanta and Chicago. Wilkinson hoped that all the major coal companies in the state would relocate their offices to the center, making it a hub for the international coal market. Shortly after Wilkinson demolished the historic Phoenix Hotel to make way for the building, the coal market experienced a pronounced lull, and the empty lot where the proposed coal center would have stood was derided as "Wally's Folly" and "Lake Wilkinson". In 1984, the Lexington-Fayette Urban County Government secured a lease from Wilkinson to develop a temporary municipal park on the site. Wilkinson conceded that he would not be able to develop the proposed World Coal Center in the near-term, and Lexington mayor Scotty Baesler wanted to improve the property before the city hosted the finals of the 1985 NCAA men's basketball tournament at Rupp Arena. In early 1985, Wilkinson struck a deal with the state and urban county governments to retain the park and build a public library and parking garage while allowing Wilkinson to construct and operate a 21-story apartment complex above the garage. Critics claimed that the city-county government bailed Wilkinson out of a bad investment by purchasing the property from him and by giving him a government-subsidized, low interest rate on his $12 million mortgage for the apartment building.
Alleged kidnapping by Jerome Jernigan
On April 10, 1984, Wilkinson was allegedly kidnapped by a man named Jerome Jernigan. In 1977, Wilkinson had provided Jernigan with start-up money for Jernigan Export Timber, Inc., a company that manufactured and exported wood veneers internationally. The company went defunct around the time of Jernigan's divorce from his wife, the secretary-treasurer of the company, in December 1980. Jernigan's son, Victor, continued to work for Wilkinson in another capacity until 1982.According to Wilkinson, in the months leading up to the alleged kidnapping, Jernigan had come to Wilkinson's office several times demanding money he claimed he was owed from his prior business dealings with Wilkinson. Wilkinson said he had been making the requested payments, but that when he refused Jernigan's request on April 10, Jernigan presented him with a four-page suicide note, then produced a pistol and told Wilkinson, "I'm going to kill you first." Wilkinson further alleged that Jernigan forced him to drive to the Crowne Plaza Hotel in Frankfort, a hotel Wilkinson owned, at gunpoint. The two spent the night at the hotel, and sometime during the night, Wilkinson contacted James Aldridge, president of New Farmers National Bank in Glasgow, Kentucky. Wilkinson, who owned an interest in New Farmers National Bank, told Aldridge he needed $500,000 as soon as possible. The next day, Wilkinson and Jernigan flew to Glasgow aboard a plane operated by Wilkinson Flying Service, another company owned by Wilkinson. Wilkinson said Jernigan threatened to kill employees at the company if Wilkinson attempted to alert them. Aldridge met Wilkinson and Jernigan with the money Wilkinson had requested at the Glasgow Municipal Airport. Upon their arrival, Wilkinson paid Jernigan $500,000 and was released unharmed.
After his release, Wilkinson alerted the FBI, and Jernigan was arrested the same day in Lexington. Upon his arrest, he was in possession of two pistols, six sets of handcuffs, and $400,000 in cash. Jernigan told authorities that he and Wilkinson had spent the previous night at the Crowne Plaza negotiating a settlement to their differences stemming from their earlier business relationship. The terms of the settlement, Jernigan maintained, included a $500,000 cash payment from Wilkinson, part of which would finance a new business venture similar to Jernigan's previous veneer export business. Wilkinson would also furnish Jernigan with a car, a furnished apartment in Lexington, and a salary of $5,000 a month. Jernigan stated that after the $500,000 was paid, Wilkinson decided to back out of the settlement and portray the encounter as a crime. Wilkinson denied Jernigan's allegations and maintained that the money – which was later recovered – was demanded by Jernigan as a ransom for his release.
Weeks later, Jernigan filed a counter-suit against Wilkinson in Fayette County circuit court. He asked the court to award him $50 million in punitive damages and to determine the profits made by his and Wilkinson's veneer company, of which he would receive half. A judge ordered the case moved to Louisville because the alleged crime was committed in Glasgow, in the state's western district. State charges against Jernigan, which included kidnapping and carrying a concealed deadly weapon, were dropped so that the federal extortion charges could take precedence. Over the objection of his legal counsel, the court ordered Jernigan to undergo a psychiatric evaluation to determine whether he was insane or mentally incompetent for his own defense. The court-appointed psychiatrist found Jernigan competent to stand trial, and he was released in late May on a $25,000 bond.
After his release on bond, Jernigan returned to the room at the Continental Inn in Lexington where he had been living prior to his arrest. On July 18, 1984, Jernigan's son Randy found him dead in the room. An autopsy showed that Jernigan suffered from coronary atherosclerosis, and heart disease was officially listed as the cause of death. Lexington police determined that there was no evidence to suggest foul play. Jernigan's ex-wife continued to pursue Jernigan's case against Wilkinson, but a Fayette County Circuit Court Judge awarded Wilkinson a summary judgment to dismiss the case in 1986.