Louisville Metro Council members are allotted $75,000 in Neighborhood Development Funds (NDF) each year to spend on a wide variety projects that serve a public purpose, such as building school playgrounds, free community festivals and the operating costs of nonprofit organizations.
Another common use of NDF grants by council members is the sponsorship of fundraising galas for nonprofits, which can involve paying for the large overhead costs of food and entertainment, but also the purchase of expensive tickets that bring in revenue for the organizations.
When council members use NDFs to buy tickets for such fundraisers, they sometimes allow the nonprofit to disburse those themselves. However, an Insider Louisville review of council records from the beginning of 2017 through this April shows that more often council members will use those tickets themselves, or give them to family, friends and their legislative assistants and their families.
Since 2017, council members have spent over $20,000 in NDF grants on tickets to fundraising galas that were either used by themselves, their aides, or the families of both — which in most cases included prominent displays of the names of members who sponsored the events. Including tickets that council members gave away to their designated guests, the total reached just short of $40,000.
These fundraisers raised money for a variety of causes — such as regional community ministries, the Louisville Urban League, the Girl Scouts and the Center for Women and Families — but these NDFs at least partly went toward the overhead costs of glitzy events and advertisements for sponsors, not solely into those groups’ operations.
A Metro Council effort led by Republicans in 2013 to reform NDF spending guidelines and oversight considered prohibiting council members and their immediate family from using such tickets themselves — the argument being that members should not personally benefit from NDF grants — but such a measure did not ultimately pass.
In fact, the spokesmen for both the Democratic and Republican caucuses told Insider that nothing in council rules prevents members from using these NDF-purchased tickets for themselves, as long as each person who will receive a ticket to the event is disclosed when the spending ordinance is passed by Metro Council.
In the period examined by Insider, all but 10 of the 26 council members personally used tickets purchased with their NDF money, though Democrats took part in this practice far more than Republican members.
While most Democrats made personal use of such tickets at least once, five members of that caucus — Cheri Bryant Hamilton, Vicki Aubrey Welch, Cindi Fowler, Rick Blackwell and David Yates — made the bulk of such expenditures, each totaling thousands of dollars
Derby galas and brunches
The largest NDF spender on fundraiser tickets was Councilwoman Hamilton, with the majority of those expenditures being approved in one meeting of the appropriations committee in April of last year.
In that meeting, the three NDF ordinances that Hamilton sponsored appropriated a total of $6,200 to buy tables for 10 at the Kentucky Derby galas and soirees of the Louisville Urban League, 100 Black Men of Louisville and the Kentucky Minority Scholarship Fund. The ordinances also listed the individuals who would sit at the table of these events, which included Hamilton and her family.
Asked by Insider if it was appropriate to spend such a large sum of taxpayer dollars to send herself and her family to a fundraising event that could include a significant amount of overhead costs, Hamilton said that it was warranted because of the positive work those groups do for the community and the crucial role that fundraising plays in achieving their mission.
“I am more than happy to not only attended these events but while there help these organizations with my support by talking with others about the goals and impact they have on the community,” said Hamilton in an emailed statement. “The core mission of these groups is to help children and provide a good learning environment for them and that can be achieved through family. I am proud to have my family with me as an example and to show them the good work being done by these groups.”
Hamilton added that she makes “all determinations on spending NDF’s on a case-by-case basis and within the guidelines of the Metro Council’s Policies and Procedures.”
A review of such policies and procedures appears to back up Hamilton’s assertion, as they state that council members may use NDFs “to fund items such as sponsoring luncheons,” yet do not set any limitations on who can use tickets that come with such a sponsorship.
Tony Hyatt, the spokesman of the council’s Democratic caucus, told Insider that “as far as I know, there is no restriction on who can be invited when you use NDFs for this purpose.”
Steve Haag, the director of the Republican caucus, also said that this was the case, as long as the NDF ordinance disclosed who would be using such tickets.
Haag added that when Metro Council took up measures to reform NDF procedures and oversight in 2013 — just after the expulsion trials of the late Judy Green and Councilwoman Barbara Shanklin related to their alleged abuse of NDF spending — Republican members had pushed for prohibiting members from using such tickets themselves, but this item was blocked by Democrats.
“We weren’t going to win that, like many other things we wanted to do,” said Haag. “It was argued and it was lost.”
He added that the council at least passed a new measure requiring the disclosure of who uses such tickets, which “was an improvement on what we used to have. It’s not as far as we would have liked it to go, but we didn’t have the votes to make that happen.”
Republican members had also pushed in 2013 for a prohibition on council members getting personal name recognition at events or projects they sponsored through NDFs, as well as a prohibition of NDFs being used to reimburse groups for events that had already occurred or been paid for, but neither proposal passed into law.
The council did pass a new rule requiring NDFs to at least be filed before the event seeking cost reimbursement has taken place, in addition to a new requirement to disclose any relationship the NDF sponsor has with the organization receiving such funds.
Despite this bipartisan agreement that council rules do not prohibit Hamilton’s use of NDFs on The Derby galas, local attorney Dawn Elliott filed a complaint with the Metro Ethics Commission on Wednesday against the councilwoman, in part asserting that she violated the city’s ethics rules by “utilizing taxpayer funds for her personal entertainment and the entertainment of her immediate family,” which provided “no benefit to the community. Just her family and herself.”
As of Thursday morning, Hamilton did not have a reaction to the complaint — which also asserts that she used city resources for her re-election campaign and paid her legislative assistant for more hours than she worked — as she had not had time to review the charges and accusations it made against her.
However, Hamilton was far from the only council member spending a significant amount of NDF grants on such events — related to The Derby or not — over the past two years.
Councilwoman Welch spent $3,641 worth of NDFs on fundraiser tickets that were used by herself, her aide or her family over this period, with over $900 more in tickets allotted to others. Councilwoman Fowler’s personal use of tickets including aides and family also totaled over $3,000, and that figure reached $5,724 when including the additional guests she provided tickets.
Councilman Yates also used $2,600 worth of NDF-funded tickets for himself, his partner and family, and gave out an additional $1,625 in tickets. Councilman Blackwell also used over $2,600 for himself, his aides and family.
Much of this NDF spending in each of the last two years occurred at the annual Mayor’s Derby Brunch on the River, which raises funds for Riverside, the Farnsley-Moremen Landing, the nonprofit arm of a historic property in the southwestern part of the county.
Welch, Fowler, Yates and Blackwell — as well as Councilwoman Marianne Butler — each used NDFs to purchase their own $1,000 table for eight along with sponsorship signs and placements for the 2017 event. These four members used at least half the tickets for themselves, aides and family.
The number of council members devoting their NDF grants to this Derby brunch swelled in April of this year when these four members were joined by Democratic council members David James and Jessica Green, as well as Republican Councilwoman Angela Leet, in buying a table for eight.
Green and Leet gave tickets to themselves and a family member, as well as their legislative aide and that aide’s spouse, and allocated the remaining four to other guests. James used two for himself and his wife and gave the six remaining spots to other guests.
Councilman Vitalis Lanshima also used $1,000 of his NDF funds to buy a full table just before this ordinance passed the full council, but did not include a list of who would be using the tickets.
Council members Welch, Fowler and Yates also spent a large amount of NDF funds on a fundraiser for Southwest Community Ministries in February, splitting up one table with 16 seats at a price tag of $5,000 in NDF money. Each used a ticket for themselves and their spouse or partner, with Fowler including four guests and Yates two more. Blackwell purchased four tickets, but was unable to attend and gave them away.
On Feb. 28 — four days after the Southwest Community Ministries fundraiser occurred — an ordinance sponsored by Fowler was passed by the appropriations committee that allocated $2,571 of her NDF funds to the nonprofit to pay for the event’s entertainment, linens, decoration and dinner.
This appropriation would appear to comply with the current council rules regarding NDFs, as the ordinance was filed before the event and Fowler disclosed in the ordinance — as well as the ordinance to purchase the $5,000 table — that she is a member of the Southwest Community Ministries board in a role with no fiduciary duties.
Republican Councilman James Peden purchased 13 tickets and 12 tickets in the past two years on fundraiser dinners for the Girl Scouts of Kentucky, with his NDF grants coming to a total of $3,325. While he allocated most of these tickets to local scout troop leaders, he and his wife — one of those troop leaders — attended both years, with each individual ticket worth $65.
The use of NDF grants on fundraiser tickets personally used by council members, their staff and family has only increased in the first four months of 2018, as the $12,167 total from this period already exceeds what was spent and used by members in all of 2017.
The only council members to not spend any NDF funds on tickets for themselves, their family, their staff or designated guests since the beginning of 2017 were Barbara Shanklin, D-2, Brandon Coan, D-8, Kevin Kramer, R-11, Scott Reed, R-16, Glen Stuckel, R-17, Marilyn Parker, R-18, Julie Denton, R-19, Stuart Benson, R-20, Robin Engel, R-22, and Madonna Flood, D-24.