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Federal Jury Convicts Husband of Former Kentucky Governor

October 14, 1993 GMT

FRANKFORT, Ky. (AP) _ The husband of former Gov. Martha Layne Collins was convicted Thursday of extorting money from state contractors and disguising kickbacks as political contributions.

A jury deliberated about 11 hours over two days before returning the verdicts against Bill Collins, who prosecutors said exploited a perception that he could influence contracting for bond issues and professional services during his wife’s four years in office.

Collins looked grim but otherwise showed no emotion as he sat beside his attorneys and heard the jury’s verdict. His wife, who was not charged, sat silently in the front row of spectators. Neither would comment after the verdict.

U.S. District Judge Joseph M. Hood scheduled Collins’ sentencing for Dec. 22. Collins could be sentenced to 25 years in prison and a $500,000 fine. He faces trial on charges of obstruction of justice and drunken driving.

Collins, a small-town dentist before his wife’s rise in Kentucky Democratic politics, had been under investigation since she left office in December 1987. The lengthy investigation resulted in an indictment in July 1992 that charged he steered contracts to companies whose executives invested in his business partnerships.

The prosecutors in Collins’ seven-week trial presented to the jury what they admitted was a circumstantial web of evidence that some contractors had paid the governor’s husband to ensure getting state business.

The biggest bond issues, totaling $1.7 billion, went to two firms whose executives agreed to invest $1.7 million with Collins’ partnerships in thoroughbred horses.

The firms were Donaldson Lufkin & Jenrette of New York and Cranston Securities Co. of Columbus, Ohio. Several top executives of both firms were witnesses in Collins’ trial.

Collins testified in his own defense that there was no connection between his business and the awarding of state contracts.

The main witness against Collins was his former business partner, Lester ″Mac″ Thompson, who also was the first finance secretary of Mrs. Collins’ administration. Thompson, who was granted immunity from prosecution, testified that Collins was a behind-the-scenes power during his wife’s administration.

Other witnesses, including DLJ President and Chief Executive Officer John S. Chalsty, disputed Thompson. Chalsty personally invested $250,000 with Collins, but said he never felt pressured. Chalsty and other investors were not charged.

Mrs. Collins testified she urged her husband to avoid conflicts of interest but never otherwise discussed his business. She said she was unaware their combined net worth increased sevenfold to more than $1.9 million during her administration. At the time she was in office, Kentucky’s constitution barred governors from seeking re-election.

Defense attorney Frank E. Haddad questioned how thoroughly the jury examined the evidence.

″You can’t go through the evidence in nine or 10 hours that’s taken eight weeks to present,″ Haddad said. ″They just didn’t consider the evidence and apply it to the law.″

Haddad said he would appeal Collins’ convictions on the grounds of insufficient evidence.

But Assistant U.S. Attorney Jane Graham said the verdicts were ″well warranted on the basis of the evidence.″

In the obstruction case, Collins is accused of trying to influence Thompson’s grand jury testimony. Haddad said he would ask for a delay of the Nov. 15 trial.