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Louisville Woos Businesses With Taxpayer Money In Secret. Do Other Cities?

derby party

The Louisville Metro Council’s government accountability committee is considering an ordinance that would force Mayor Greg Fischer to release the guest list for the Kentucky Derby and other events that involve spending more than $10,000 of taxpayer money.

Economic development officials say keeping the names quiet is essential for doing business. Some council members say the public deserves to know who the mayor entertains since they’re paying for it. Records show Fischer has spent $390,000 on his private Derby events since 2015.

Mary Ellen Wiederwohl, Louisville's chief economic development officer, argued that identifying attendees would have a "chilling effect" on their participation. She addressed the Council's Government Oversight, Audit and Ethics Committee earlier this week.

Councilman Pat Mulvihill and other Metro Council members want to know whether the practice of keeping guest lists of taxpayer-funded parties private is reasonable.

"What are other cities or states requiring in terms of disclosure, if anything at all?” Mulvihill asked at the committee meeting.

One way to find out is to look at what other places share with the public about their entertaining for economic development.

'There are definitely results'

The Commonwealth of Kentucky has spent nearly $6,000 on tickets to Oaks and the Derby since 2016, said Jack Mazurak, communications director of the Kentucky Cabinet for Economic Development. Details about other entertaining expenses covered by taxpayer dollars were not immediately available.

He declined to share names of individuals or companies the Cabinet has hosted. A state statute exempts Kentucky agencies from disclosing "Public records pertaining to a prospective location of a business or industry." At Tuesday's committee meeting, Wiederwohl said the statute exempts Louisville as well.

Mazurak said that applies even after a deal is closed because the economic development team considers all guests to be prospects for relocation or expansion at all times.

The Cabinet for Economic Development is a small team, and is careful with taxpayer dollars, he said. But he declined to share names or provide examples of guests who eventually chose to do business in Kentucky.

"There are definitely results," he said.

'We have to justify the investment'

The approach in Louisville and Kentucky differs from some other cities with major sporting events. That’s in part because entertainment here is taxpayer-funded.

Compare that to Indianapolis, where the local chamber of commerce uses a blend of public, private and philanthropic funds to entertain prospects during the Indianapolis 500.

Maureen Krauss is the chamber’s chief economic development officer. She said telling the public that her group hosted a company’s representatives for the race would be fine once the deal is announced. Until then, her organization respects non-disclosure agreements and companies’ desire for privacy.

"Once a project is announced, we tell people," she said. "We celebrate that they’ve announced to be there."

A representative for Indianapolis Mayor Joe Hogsett said his office does not organize taxpayer-funded entertainment events for the Indianapolis 500.

Economic development groups in Augusta, Georgia, home of the Masters golf tournament, are also willing to share details in some circumstances, said Sue Parr. She is president and CEO of the privately-funded Augusta Metro Chamber of Commerce.

"We have to justify the investment that is made into the program to make sure that we have a return," Parr said.

A spokeswoman for Mayor Hardie Davis, Jr., said his office does not host taxpayer-funded entertainment for business prospects. She said he does attend events organized by economic development groups.

Parr’s counterpart Cal Wray is the president of the Augusta Economic Development Authority.

He agreed that sharing the names of guests or at least the companies they represent shows the public that the program works. It also signals to other prospects that attending events like the Masters or Kentucky Derby as guests of economic development teams could be worthwhile.

But he, like the others, said sharing a full guest list is not an option.

"We don’t disclose our guest list," he said. "(There are) no taxpayer dollars so we’re not obligated to share our guest list."

Wray said he’s willing to share names after deals are announced, even though his organization doesn’t use taxpayer money for entertaining. But he would not want to give out all the details.

Even a couple of years after an event, talks could be ongoing, he said.

The proposed Louisville ordinance would require Metro Government to hand over the details to the Metro Council President three years to three years and three months after the event. At the committee hearing, Louisville Forward's Wiederwohl said most decisions are made within a year, but some can take much longer.

Amina Elahi is LPM's City Editor. Email Amina at aelahi@lpm.org.