A scathing report released last week revealed widespread misspending and sexual misconduct at Louisville’s public transit agency. Much of the report focused on then-executive director Ferdinand Risco’s relationship with a contractor who was paid more than $228,000 for no demonstrable work.
That contractor previously worked for another top city official: Tony Parrott, the executive director of the Louisville Metropolitan Sewer District. When he worked in Cincinnati, Parrott paid the same contractor $3 million over five years, a deal one city councilman at the time called “unconscionable.”
This is not a coincidence: Parrott introduced the contractor to Risco.
The referral came just months after an Ohio state audit revealed Parrott had misspent more than $750,000 on bloated, often unnecessary contracts during his time running Cincinnati MSD.
Risco was fired in February after sexual assault and harassment allegations from staff came to light.
The contractor that worked with Risco at TARC was not named in the report because she has accused him of sexual assault. But her attorney confirmed her identity, and the report makes it fairly clear who she is: the same woman who Parrott worked with closely for over a decade in Cincinnati.
In a brief response to emailed questions, Parrott downplayed his role in connecting Risco and the contractor, saying it was simply a referral. He did not offer more details on why he would refer this specific contractor to TARC, or what services he thought she would be best suited to provide.
Jean Porter, a spokesperson for Mayor Greg Fischer, also dismissed the concern, saying Parrott advised Fischer’s office that all he did was introduce Risco and the contractor at a “water equity task force meeting” years ago.
But the contractor told TARC investigators that Parrott was the one who initially reached out to her about an opportunity at TARC, and that she came to Louisville at his invitation. And the meeting where they all met?
According to the report, it was attended by only five people: Risco, Parrott, two MSD consultants and the woman who would become TARC’s newest contractor — and, five days later, would send a bill for $27,000.
In Cincinnati, Controversy
When Parrott was hired to run Louisville MSD in July 2015, Fischer said he was “the right leader for our city.”
Parrott had faced controversy in his last job over some residency requirements; at the time, Fischer announced he had hired a private investigator to look into the concerns, and came away confident in the decision to hire Parrott.
But within a few months of him taking the Louisville job, an investigative series from the Cincinnati Enquirer laid out Parrott’s mismanagement of the Cincinnati Metro Sewer District’s massive budget.
The FBI opened an investigation and the city undertook its own audit.
Fischer’s office told WHAS at the time that they were aware of the allegations, but Parrott had been thoroughly vetted and the Mayor had full confidence in him.
“However, the Mayor’s Office will be looking into the situation in the coming weeks,” the spokesperson said.
One major issue raised in the investigative series and confirmed in the audit was Parrott’s over-reliance on expensive outside contractors. Taxpayers received little benefit from many of these inflated contracts, the audit found.
Parrott awarded a contract to a former Cincinnati councilman for $294,000 that auditors could find no work product to show for it. Another contractor billed for more than 24 hours of work in a day. Contractors were paid by Cincinnati MSD to do work for a private foundation that Parrott also ran.
One article by the Enquirer focused in parton a contract with a Pittsburgh-based company. Between 2010 and Parrott’s departure in 2015, that firm was paid more than $3 million to help manage the agency’s budget, the Enquirer reported. Much of that sum came not from the actual wages of contractors, but from a “multiplier” written into the contract.
MSD agreed to pay 2.95 times as much as the contractor’s wages, with the excess going directly to the firm. Most contracts contain some multiplier, but experts interviewed by the Enquirer said, across the board, it seemed like Cincinnati MSD was significantly overpaying.
The recent TARC investigation cited these “questionable billing practices” from the contractor’s time with Cincinnati MSD as evidence that she was not suited to take on work in Louisville.
“An examination of Contractor’s relationship with Cincinnati MSD would have revealed to even the most uninitiated a troubling relationship,” the report says. “Contractor had previously been embroiled in billing controversies while contracting for Cincinnati MSD” — contracts approved by Parrott himself.
In 2018, after Parrott had been in Louisville for several years, the Ohio State Auditor released a report on his time at Cincinnati MSD. The audit uncovered $779,000 in improper expenses.
The auditor did not flag the $3 million paid to the woman who went on to work for TARC in the list of improper contracts.
Parrott was deemed jointly liable for $461,594, meaning he would have to repay the city if the companies did not. In an email, Parrott said he cannot comment on the status of that restitution due to ongoing civil litigation.
In an email, Porter praised Parrott as an effective leader for MSD and echoed the Mayor’s previous statements on the issue.
“The issues raised in his previous job were thoroughly vetted before he was hired here,” Porter said in an email. “Transparency and accountability are priorities at MSD.”
Pay From TARC, But No Work
In December 2018, the same month Ferdinand Risco was promoted to executive director of the Transit Authority of River City, Parrott reached out to the contractor to discuss “an opportunity to provide consulting services to TARC,” she told investigators.
The woman told investigators that Parrott invited her to Louisville from Dallas to discuss the opportunity with Risco. Investigators found evidence that an MSD contractor actually organized the meeting.
But in January 2019, Parrott, Risco, the contractor, the MSD contractor and another consultant all met.
Five days later, the contractor submitted her first invoice to TARC for $27,000. This was ostensibly in exchange for a “three phased study for TARC” that she submitted a proposal to perform, though internal investigators found no evidence that she actually did the work promised.
The payment violated several TARC policies, including the requirement to seek bids from local contractors first and not provide advance payments. There also was no formal contract until about nine months into the relationship.
The contractor billed more than $228,000 between February 2019 and Risco’s termination in February 2020.
The contracts — and payments in the absence of contracts — were further complicated by the woman’s report to investigators that she quickly began a sexual relationship with Risco.
“Over the course of a mere 22 days, Contractor had met with Risco, Contractor invoiced and secured $27,000.00 in taxpayer funds through a ‘no bid sole source’ contract that circumvented TARC policies and procedures, and the two had sex with each other, as Contractor...travelled at TARC’s expense,” the report wrote.
That sexual encounter was consensual, according to the woman’s account in the report. But in April 2019, while attending a conference in Dallas with Risco, she said they were alone in his hotel room when she said he grabbed her, attempted to lift up her shirt and sodomize her without her consent.
She told investigators about two other incidents of sexual assault in hotel rooms, one where he performed oral sex on her without her consent, and another when he got on top of her and she blacked out while he had sex with her.
“When asked whether the approval or continuation of any or all of her contracts was conditioned upon her submission to sexual relations, Contractor stated unequivocally that she was not asked or required to have sex with Risco in exchange for any of the contracts with TARC,” the report wrote. “She explained that her fear of Risco’s explosive temper deprived her of a choice.”
The contractor’s lawyer declined comment on her behalf.
Investigators concluded that, whatever her role was, it was Risco who, as a city employee, violated several policies by sending explicit text messages and not disclosing his sexual relationship with a contractor.
Asked whether he knew about allegations of sexual assault by Risco, Parrott responded emphatically: “No. No. None.”
Contact Eleanor Klibanoff at eklibanoff@kycir.org.