Federal prosecutors have told Sen. Wendell H. Ford (D-Ky.) he will not be charged by a grand jury in Lexington that investigated an alleged state insurance kickback scheme that operated during his tenure as governor.
The news came the same day that Joseph Margiotta, the Republican party chairman in Long Island's Nassau County, was convicted of extortion involving similar charges. Sources said the allegations against Margiotta were "weaker" than those against Ford, but that the statute of limitations precluded any chance of filing charges against the senator.
Ford left the governor's office in 1974, after defeating incumbent Republican Marlow Cook in the Senate race.
In both the Kentucky and Long Island cases, investigators focused on arrangements in which insurance companies getting government contracts split commissions with party officials. Neither Ford nor Margiotta was alleged to have taken large personal kickbacks.
The indictment of a former Kentucky state Democratic chairman earlier this year did mention that Ford's insurance firm received $5,000 payments from shared commissions in 1975 and 1976. Ford's brother, who runs the family business, said at the time that "sharing commissions is a normal practice of long standing in the state."
The Lexington Herald reported late last month that the prosecutors working with the grand jury recommended that Ford be indicted on racketeering charges, on the theory there was a continuing conspiracy between his administration and his successor's. Superiors in Washington refused to approve the indictment, however, mainly because the evidence was too old, sources said.
Federal investigators have been examining allegations of political corruption in Kentucky for about four years. A special grand jury expired last week after 2 1/2 years of hearing evidence, a handful of indictments, and no convictions so far.
Its members recommended that a new grand jury be empaneled, apparently to focus on allegations about the administration of Ford's successor, Julian Carroll.
The Justice Department's public integrity section has been conducting the Kentucky investigation because the former U.S. attorney's brother was named as a "central figure" in the insurance commission sharing scheme. Justice Department officials said the Kentucky inquiry has been the most wide-ranging in the nation in recent years.
Federal judges and public officials have criticized federal prosecutors for the slow pace of the grand jury investigation. But officials give the investigation credit for reforming the state's practice of awarding its insurance policies without bid. Savings are estimated in the millions of dollars.