Topeka ? Gov.-elect Kathleen Sebelius on Thursday appointed as her secretary of administration Howard R. Fricke, a business leader and political insider who three years ago sold a building to the state for $18.5 million in a deal that continues to stir controversy.

Fricke, 66, is former chief executive officer and current chairman of the board of Security Benefit Group of Insurance Cos., a high-profile Topeka business with reported assets of more than $10 billion.

“We are thrilled to have someone of Howard Fricke’s caliber willing to get involved in state government,” Sebelius said, praising Fricke and his leadership of Security Benefit, which has won numerous awards for innovation and employee relations.

The company and its executives maintain strong political ties to the Capitol. In 1999, the company moved its headquarters to another Topeka location and sold its downtown building to the state for $18.5 million.

The purchase combined with the state’s plans to spend $10.7 million to renovate it for headquarters for the Kansas Department of Transportation have been ridiculed by some lawmakers as too expensive. A state audit also questioned the purchase of the building.

One of those critics, state Sen. Jim Barone, D-Frotenac, said he had no trouble with the selection of Fricke to be secretary of administration.

“There are still questions about the building,” Barone said. “But I don’t question Mr. Fricke’s situation. He was the seller. My concern was with the buyer.”

Barone said he hoped that Fricke would bring the expertise that helped Security Benefit get $18.5 million for the building over to the state administration.

Gov.-elect Kathleen Sebelius and Howard R. Fricke laugh as they respond to questions during a news conference in Topeka. Thursday Sebelius named Fricke as her secretary of administration.

But former state Rep. Alan Goering, a Democrat from Medicine Lodge who tried to kill the appropriation to renovate the building, said the appointment of Fricke was uninspired. He said Fricke was a member of the group that told the state that the building was in excellent shape.

“What message are we sending?” Goering asked. “Things are in a situation where we need some creativity and fresh approaches. I’m real concerned we are lacking on those fronts.”

Sebelius and Fricke also revealed that Fricke would maintain his paid position on the board of Security Benefit, which has multimillion-dollar contracts with the state, one of which is up for renewal in a competitive bid.

Moments before a news conference announcing her selection of Fricke, Sebelius received a unanimous ruling from the state ethics board that said Fricke could keep his position on the Security Benefit board as long as he had no involvement in the company bidding for the state contract.

The state pays Security Benefit $14 million per year in premiums to provide group life insurance for governmental employees, according to Glenn Deck, executive director of the Kansas Public Employees Retirement System. In addition, employees pay another $7.5 million in premiums annually to Security Benefit for additional life insurance. Security Benefit also administers the state’s disability insurance for a service fee of $450,000 per year. The life insurance plan is currently up for bid and Security Benefit is one of five bidders. Trustees of KPERS may pick a contract winner as early as next month.

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