A $215,000 raise makes Kentucky's Charles Grindle the nation's highest paid state tech chief.

The state says Grindle's new $375,000 reflects his value to the state.

Public records show Grindle and Gov. Matt Bevin are longtime friends and business associates.

FRANKFORT, Ky. — When Kentucky Gov. Matt Bevin wanted a new state chief information officer, he didn't do a national search — he hired an old Army buddy and longtime business associate last October at a salary that now leads the nation for similar state jobs.

Some Kentucky lawmakers were stunned last month when the Courier Journal reported that Bevin gave Charles E. Grindle a $215,000 pay raise on Aug. 1 — a highly unusual 134 percent increase after less than a year on the job. The raise also came four months after the passage of a state budget that included no pay increases for more than 42,000 Kentucky public school teachers and most of the state's nearly 30,000 state workers.

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Bevin told reporters last week he personally recruited Grindle, who retired last year as a colonel at the U.S. Army War College, for the critical job of managing state government's technology needs. Grindle started work Oct. 9, 2017, as executive director of the Commonwealth Office of Technology, which now pays a whopping $375,000 per year.

"I've known him for some time,'' Bevin said last week.

"I became aware of his availability a couple years ago when he was at the War College. ... When I heard that he was going to be retiring, I made sure I contacted him and let him know that this is something that I would hope that he would consider."

Bevin wouldn't say how long he's known Grindle. Neither Bevin nor Grindle have responded to repeated requests for information about their relationship and any role it might have played in Grindle's hiring and rapid increase in pay.

The Courier Journal, however, has learned the two of them have a relationship that dates back nearly 30 years.

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A former official of the Commonwealth Office of Technology this week told the Courier Journal that Grindle spoke openly about his long friendship with Bevin and that he had worked for Bevin in an unspecified capacity before going on the state payroll.

Roy Terry, former executive director for project management in the Commonwealth Office of Technology, said that at a staff meeting shortly after Grindle started work, the new boss said Bevin offered him the CIO job on the day of his inauguration in December 2015. He said he told the governor he had a commitment to the Army War College for about two more years, Terry recounted.

"First thing I thought of is: 'The governor was doing his friend a big favor,' " Terry said.

Bevin, Grindle mum on relationship

Bevin abruptly ended last week's talk with reporters after he was asked when he and Grindle first met. On Monday he brushed off a Courier Journal reporter.

Asked if he could take questions about Grindle as he was walking from a bill signing ceremony in the State Reception Room to his office, Bevin said, "No. Why don't we talk about things people care about?"

Public records reviewed by the Courier Journal show the two have had a long association.

In April, Grindle filed a personal financial disclosure form with the state Executive Branch Ethics Commission that shows he and his wife, Allison, owned Lone Star Graphics, a Pennsylvania-based website design and maintenance company.

Pennsylvania Department of State corporation records show Allison Grindle remains an officer of J.S.D. Enterprises Inc., which has owned Lone Star Graphics as a business name since 1998.

Records show Bevin has for years been a regular customer of Lone Star Graphics:

Integrity Asset Management, the investment firm Bevin founded in 2003, has credited Lone Star Graphics as its website designer since at least February 2011. Bevin announced the sale of the company to a Michigan firm in December 2010 but remained as CEO for nearly another year.

The Matt Bevin for Senate campaign paid Lone Star Graphics more than $26,000 for unspecified tech services in 2013 and 2014, according to Federal Election Commission records.

Bevin's gubernatorial campaign, Matt Bevin for Kentucky, made 30 payments totaling $9,693.16 to Lone Star Graphics for information technology services between March 9, 2015, and Oct. 9, 2017, according to state campaign finance reports. Treasurer Eva Smith said the campaign severed ties with Grindle's company about the time Grindle started work for the state on Oct. 9 — the same day it made its most recent payment to the company. Bevin's campaign website, www.mattbevin.com, is registered to Domains By Proxy LLC, an Arizona company commonly used to conceal a domain owner's identity.

Grindle and Lone Star Graphics were the registered administrators for Bwish.org, a website for Brittiney's Wish, a nonprofit organization created by Matt and Glenna Bevin to finance missionary trips in honor of their late daughter, Brittiney. The Bwish.org website was created in December 2004 and last updated in December 2016. The site's registration expired in December 2017, according to OursSite.com, which tracks internet domain registrations.

Terry, who was fired by Grindle in May, said it was no secret at the Commonwealth Office of Technology that Grindle and Bevin "developed their friendship" years ago, when they both were young Army officers.

"This is not third-party. This is something that he told us in staff meetings with other executive directors,'' Terry said. "He was not shy about it, he would talk open and frequently about that."

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Terry recalled Grindle telling an amusing story about how he once thought he had won an Army operational readiness competition only to be beaten by the hard-working Bevin.

Two other people who attended a meeting of state technology workers in March also told the Courier Journal that Grindle told the gathering he had known Bevin for a long time and they were in the Army at the same time.

Both asked to not be identified for fear of job retribution.

Army buddies

Bevin has refused multiple Courier Journal requests to release his military record. Grindle could not be reached for a similar request.

But biographies, online records and publicly available information show that the two men — who entered the Army in 1989 as second lieutenants newly graduated from college ROTC programs — spent time at the same posts early in their military careers.

Bevin and Grindle both took field artillery officer training at Fort Sill, Oklahoma, although their courses were different, according to information provided by the Army. Grindle's attendance at Fort Sill lasted from July 1989 to December 1989, while Bevin arrived there in November 1989.

Army records also show Bevin was assigned to the 25th Field Artillery at Fort Polk, Louisiana, from October 1989 until September 1993, when he left active duty. He remained in the Army reserves until 2004.

Grindle was assigned to the 21st Field Artillery and the 1st Field Artillery Battalion at Fort Polk from February 1990 through September 1992. He remained in the Army, rising to the rank of colonel and spending the final years of his career at the U.S. Army War College in Carlisle, Pennsylvania.

Clay Chun, director of the War College's distance education program, said Grindle led the development of education in cyber warfare and also managed the distance education instructional support group, which was responsible for the IT architecture that supports "online delivery and interactive seminars."

Terry described Grindle as "extremely qualified, extremely bright," but said he was "shocked" by Grindle's 134 percent raise at a time when state government is not funding raises for teachers or the vast majority of state workers.

"We looked at it as a positive thing that this guy had a personal relationship with the governor, to be able to have his support and move things at a quicker pace,” Terry said.

Terry said he was disappointed, but not bitter, when he was told by letter of his firing in May. He said he doesn't know why he was let go, but he acknowledged his experience is in business and human resources management, rather than information technology. He said he respected Grindle's decision.

Campaign finance records show that Terry gave $1,000 in September 2015 to the campaign of Democrat Jack Conway, Bevin's opponent in the race for governor that year.

Bevin's Finance and Administration Cabinet did not respond to an email last week asking if the chief information officer job was advertised to the public or if there was ever a candidate search. The state is not required by law to advertise or conduct a search to fill this kind of job.

Grindle's state personnel file, obtained under the Open Records Act from the Kentucky Personnel Cabinet, is thin — seven pages relating to his hiring and salary, but no job application, resume or any document listing job references.

Grindle's predecessor, James Fowler, was making $139,244 when he left the job in December 2015, according to the Kentucky Personnel Cabinet. The job remained open for 22 months, with duties shifted to an acting CIO until Grindle officially started work on Oct. 9.

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Grindle's $160,000 per year starting salary made him one of the highest-paid state workers in Frankfort. His Aug. 1 raise to $375,000 made him the highest-paid state chief of information systems in the nation, according to a 50-state salary survey by the Council of State Governments that was updated just last week.

The next-highest CIO, in Oregon, makes $160,000 a year less.

StateScoop, a website that covers state government technology, reported this week on the wide gap between Grindle's salary and pay in other states. StateScoop reported, "Grindle is not alone among high-ranking Army veterans to become state IT (information technology) chiefs: Michigan's Dave DeVries is also a retired colonel who spent 29 years on active duty. DeVries earns $180,000 a year."

Raise controversial but legal

The $215,000 raise granted by Bevin was made possible by a last-minute bill passed in April, at the end of the 2018 General Assembly, to make changes to the 2018-20 state budget bill. One provision — included at the Bevin administration's request and approved without a legislative hearing — exempted Grindle's job from a state law that caps salaries at $163,992.

Some lawmakers say they knew Bevin planned to pay Grindle more and accepted the need to bump the salary to keep a highly qualified employee. But they expressed surprise at the amount.

State Rep. Jim Wayne, D-Louisville, voted against the legislation, which he called "an abuse of power" because it never received a legislative hearing. Last week he questioned the amount of Grindle's raise, saying, "Surely we can find someone who is dedicated and highly qualified at a much more reasonable salary."

State Sen. Morgan McGarvey, D-Louisville, said, "I think it's outrageous. ... And I've seen little or no apparent justification or transparency to this."

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Whether Bevin's business arrangements with Lone Star Graphics could present a conflict of interest remains unclear.

State regulations specify the Executive Branch Ethics Commission may investigate if a public servant uses his or her position to influence a decision involving "a person with which the public servant has a personal relationship.”

Kathryn Gabhart, executive director of the commission, last week said she could not comment beyond referring to sections of the state ethics code dealing with conflict of interest.

Meredith McGehee, a government ethics expert and strategic adviser for the Campaign Legal Center, a Washington, D.C.-based nonprofit, said Grindle's salary may be an issue for voters but appears legal.

McGehee noted that the legislature, which is responsible for government oversight and spending, approved the elimination of the pay cap.

“It’s more of a political question, right, about whether or not paying a state official that much money — over $300,000 — is what the citizens of Kentucky believe is merited," McGehee said.

But McGehee suggested elected officials could encourage public confidence in such personnel decisions by being transparent about any past business relationships they've had with someone they hired or to whom they gave a major raise.

Tom Loftus: tloftus@courierjournal.com; Twitter: @TomLoftus_CJ. Support strong local journalism by subscribing today: www.courier-journal.com/toml. Morgan Watkins: 502-582-4502; mwatkins@courierjournal.com; Twitter: @morganwatkins26. Support strong local journalism by subscribing today: www.courier-journal.com/morganw.