For years, the public has pondered why the Veterans Administration paid an investment group led by Louisville businessman Jonathan Blue millions too much for a proposed hospital site near two of the region’s 10 most congested hotspots. Now emerges another question: Was the VA’s site-selection process for sale, too?
Here’s what we know:
On Sept. 22, 2010, David S. Blue, Jonathan’s father, contributed $30,400 to the National Republican Senatorial Committee. According to the elder Blue, the donation was made at the behest of Mitch McConnell of Kentucky, then and now the GOP’s most powerful U.S. senator.
In a telephone interview, I asked David Blue, “Have you ever made a donation that large?” He replied only, “I made the donation because Sen. McConnell requested the donation.”
The bequest was extraordinary, even for Blue, who sold the lucrative Louisville Scrap Materials Co., an industry giant, in 1998.
The hefty handout far exceeds the sum of his other campaign donations dating back to 1999: The $30,400 is more than six times his second-highest single contribution of $5,000 in 2001 to the Bluegrass Committee (McConnell’s leadership PAC) and 12 times his third-highest of $2,500 to the 2002 Kentucky Republican Victory Committee.
Critics of Jonathan Blue’s Brownsboro Road site first brought the donation to my attention last year, beginning an exhaustive search to follow the money via the most detailed, discoverable chain of events.
Research revealed the contribution coincides with the controversial sharp turn and acceleration of the site selection, according to a timeline former VA Secretary Eric Shinseki provided to the chairman of the VA Subcommittee on Oversight and Investigations.
The donation came the month after three undeveloped “greenfield” sites, including Blue’s, cleared a crucial VA hurdle: approval by Shinseki for “due diligence” or reasonable steps to satisfy agency requirements for buying real estate.
“I had no idea of that,” David Blue says. “I had nothing to do with that property.”
However, his son and McConnell apparently knew the greenfield sites had been greenlighted shortly before his Sept. 22, 2010, donation: According to Shinseki’s timeline, “The Kentucky congressional delegation was notified of the Secretary’s decision on September 14, 2010, and the landowners were notified shortly thereafter.”
What are the odds that the donor’s crest would coincide, by chance, with the sudden surge of his son’s site?
McConnell spokeswoman Stephanie Penn declined to answer emailed questions including 1) what did McConnell know about the emergence of the Brownsboro site, and 2) why did he solicit the large donation from its owner’s dad?
And so questions persist: Did the $30,400 donation purchase leverage? And if so, how much did it advance McConnell’s goal of becoming the most powerful person on Capitol Hill?
At the time, the minority leader, then 68, was eager to become majority leader, which would remain beyond reach until GOP senators outnumbered Democrats. Thus he and the NRSC shared a top priority: maximize giving to overtake a party amid a forbidding climate — just two years beyond McConnell’s narrow re-election.
Extraordinary pressure for selection
In the year after receiving a sizable donation from David Blue, McConnell repeatedly sought to expedite VA Secretary Shinseki’s decision on the site of the replacement Robley Rex VA Medical Center (RRVAMC). In an Oct. 1, 2011, letter to Shinseki obtained under the Freedom of Information Act, McConnell recalls past pushes — and then gives one last shove:
As you know, this is not my first attempt to obtain answers from the Department about this delay. Just last year it required holding one of your nominees whose appointment was pending before the Senate in order to obtain the Department’s assurances that a decision would be made by “summer 2011.”
Since the VA’s timetable was issued in a June 22, 2010 letter to me, my office has been reassured on a number of occasions — including in writing — that the Department would select a site by September 2011. Summer has past (sic); September has now come and gone and still no site has been selected. Each month of delay means the longer that Kentucky veterans have to wait to get the quality of care they need and deserve …
I, therefore, strongly urge you to make selecting a site in a timely manner one of your top priorities.
The letter also includes his ubiquitous disclaimer: “I myself have taken no position on where the RRVAMC should be located.”
However, during a March 2012 conference of the Veterans of Foreign Wars in Louisville, he telegraphed where it should not be located. He reportedly criticized “a recent Courier-Journal editorial that was supportive of a downtown location” and added, “This is not an economic development project.”
Ignoring the steroidal stimulus of this billion-dollar project aligns the lawmaker with the VA against neighborhood attorneys who claim the agency, in its site selection, unlawfully ignored an executive order (No. 12898) requiring the VA “to the greatest extent practicable” to make “achieving environmental justice part of its mission.”
The senator’s discouragement of a downtown site also aligned him with Jonathan Blue, whose Brownsboro property stood a better chance of selection if a major roadblock was eliminated.
Red flags emerge
On Nov. 10, 2011, less than six weeks after McConnell’s memo to the VA, Sec. Shinseki unexpectedly named the Brownsboro Road site the preferred alternative and a Factory Lane site (before it dropped off the market) the second choice. McConnell’s statement said, “I’m pleased the VA Secretary made the decision.”
Three weeks later, Shinseki wrote McConnell that construction would take about three-and-a-half years after the purchase of the property, which was finalized on July 9, 2012.
Four-and-a-half years later, ground has yet to be broken. During that time, however, many red flags have emerged.
In July 2012, The Courier-Journal’s Chris Otts (now at WDRB-TV) reported that Blue and his co-investors sold the VA the site for almost $8 million more than the $4.96 million they paid for it eight years prior.
Otts subsequently petitioned the VA, under the federal Freedom of Information Act, for appraisal information. A month later, he reported that his open-records request remained unfulfilled. Stunningly, McConnell intervened to obtain from the VA an appraisal for the Louisville daily he often disparaged as “The Curious-Journal.”
In February 2014, the specter of a cover-up emerged with news that there were two appraisals separated by only 14 months. McConnell had helped the C-J obtain only the second appraisal of $12.9 million — which the VA paid in full. It was 31 percent higher than the first appraisal of $9.8 million. The inspector general concluded on Sept. 17, 2015, that the VA may have overpaid in excess of $3 million for the property.
McConnell’s office has declined to answer whether the senator was aware there were two appraisals, and it remains unclear whether anyone involved in the scandal sought his intervention.
The senator has steadfastly maintained he takes “no position” on the location of a new VA.
In recent months, the standard cut-and-paste reply to VA-related questions from McConnell’s office reaffirms the need for speed: “It is time to build the new facility.”
Given escalating controversy, however, the fate of the location remains uncertain.
Louisville Mayor Greg Fischer recently alerted the VA to multiple issues that “could impede the success” of the site amid growing public, political, veteran and medical opposition. In addition, opposition groups including Grow Smart Louisville have retained lawyers, and litigation overshadows the process — a process that seems too fouled by favoritism not to fail.