The administration of Gov. Matt Bevin didn’t just spend hundreds of thousands of dollars on Kentucky Derby and Oaks tickets for mystery economic development guests over the last three years, it also shelled out tens of thousands more for these guests’ lodging, meals, transportation and even gifts — from bourbon balls to socks to jewelry.
As Insider first reported last month, the state Cabinet for Economic Development and the Kentucky Tourism, Arts and Heritage Cabinet have spent over $350,000 on “Millionaires Row” tickets at Churchill Downs for such guests to attend the Kentucky Oaks and Kentucky Derby during the past three years. They also continued the tradition of past governors’ administrations by withholding these guests’ identities by citing an exemption in the Kentucky Open Records Act to prevent the disclosure of prospective businesses.
According to new records obtained by Insider from these two cabinets via open records requests, the Bevin administration also spent nearly $189,000 on these mystery guests’ hotel lodging, transportation, food, beverages and gifts.
The Cabinet for Economic Development picked up 72 percent of the expenses on Derby guests, with the tourism cabinet picking up the rest. The costs all together totaled $529,528.
Much like the administration of Mayor Greg Fischer — which has faced criticism over spending roughly $390,000 on Derby guests in the last four years, without revealing their identities — the Bevin administration has argued that businesses considering relocating to and expanding within Kentucky require and deserve confidentiality despite the large sum of taxpayers’ dollars spent entertaining them.
While declining to disclose the names of any companies that decided to locate or invest in Kentucky after being entertained at The Derby, Cabinet for Economic Development spokesman Jack Mazurak told Insider in a statement that “in terms of (return on investment), the decisions made as a result of these events, and the relationships created and strengthened during them, have collectively contributed directly to billions of dollars in long-term corporate investment in Kentucky and thousands of jobs created and sustained.”
Tickets to the races accounted for more than 65 percent of the public money spent on secret Derby guests by the Bevin administration, with hotel lodging expenses coming at a distant second. Both state cabinets put up guests in the Embassy Suites by Hilton in Lexington each year — together spending a total of over $51,000 during the past three years.
Mazurak told Insider that the cabinet aims to provide a “top experience” for the guests that make investment decisions for major companies, “while working diligently to minimize costs behind the scenes.” As an example, he cited their ability to negotiate room rates of $160 a night in Lexington, which includes “a full breakfast and happy hour with hors d’oeuvres.”
The Bevin administration spent under $17,000 on hotel lodging in 2018 for roughly 60 guests, according to the cabinets’ records. By comparison, the Fischer administration’s economic development team at Louisville Forward spent nearly $30,000 just this year on lodging for nearly half the number of guests at the new Omni Hotel in downtown Louisville.
The majority of the administration’s expenses were paid for by Derby Celebration Inc. — a nonprofit set up to organize the governor’s Derby weekend events and entertainment — and then reimbursed by the two cabinets. In addition to the Churchill Downs tickets and hotel lodging, each year the nonprofit paid for the annual Derby eve black-tie gala at the Governor’s Mansion, a private breakfast at the Keeneland racetrack in Lexington on Derby morning and a dinner at the Jim Beam American Stillhouse in Bullitt County after The Derby races.
The Bevin administration has purchased 126 tickets to the governor’s Derby eve gala for these secret guests during the past three years, which amounted to $27,300. The Derby day dinners at Jim Beam has cost the administration over $24,000, while the Keeneland breakfasts totaled nearly $17,000.
In addition to these meals and parties, the administration also directly purchased drinks for these guests at Churchill Downs and paid for their charter bus transportation around the state. These prepaid beverage packages at the races cost $14,614, while the charter buses and their parking cost over $25,000.
Though a smaller percentage of the total expenses, the cabinets also spent roughly $20,000 on a wide variety of gifts and souvenirs for their guests. The administration spent $3,339 on candy alone, including chocolates, bourbon balls and caramel corn from local stores around the state.
The Cabinet for Economic Development spent over $2,500 on 74 custom-made bracelets during the three years, in addition to well over $1,000 on 30 Derby ties, 25 pairs of Derby socks and hand-painted silk scarves.
The more than 100 tote bags that held some of these gifts for guests cost nearly $2,000 alone, while the two cabinets spent $3,365 on 95 complimentary copies of a book about the Kentucky Derby.
The administration paid over $5,000 for additional souvenirs, including candles, Derby glasses, engraved picture frames and personalized stone cups and pitchers.
All of these gifts were purchased from companies around the state, with Mazurek noting that the cabinet goes “to great lengths to source products and services from Kentucky businesses.”
The Cabinet for Economic Development also provided a copy of the receipts from the previous administration of former Gov. Steve Beshear in 2015, which showed purchases from some of the same vendors.
While the Beshear administration hosted a Derby eve gala at the Governor’s Mansion and purchased Churchill Downs tickets, it also paid for a train ride with food and beverages for guests from Frankfort to Louisville on Derby day and lodged them at a cheaper hotel in Frankfort. The Keeneland breakfasts and dinners at Jim Beam for economic development guests appear to be a new feature of the Bevin administration.
According to an email chain from Cabinet for Economic Development officials in 2015, the typical total that it spent on prospective business guests each year was roughly $130,000 — similar to what Bevin’s cabinet spends each year. However, that figure rose to $165,000 in 2015 due to costs for the governor’s Derby eve gala going up by $25,000.