The Louisville Metro Ethics Commission is investigating Piagentini to determine if he broke local ethics laws last year when he helped the nonprofit Louisville Healthcare CEO Council get a $40 million COVID-19 relief grant then took a job with the group.
The investigation came after a KyCIR report that found Piagentini co-sponsored the spending plan last fall, voted for it in a council budget committee meeting, then started working for the nonprofit the day after the measure passed the full council in December 2022.
The city’s ethics ordinance prohibits council members from using their official position for “unwarranted” gain.
In February, Piagentini asked the ethics commission himself to review his involvement with the spending plan, but now he says he did nothing wrong and wants the commission to dismiss the complaint against him.
Piagentini’s defense
In February, Piagentini told KyCIR he didn’t start negotiating the job until he received a non-disclosure agreement from the CEO Council. He said that came after the spending measure passed the council’s budget committee in mid-November.
But records contradict that account. They show he received the NDA from the CEO Council’s executive director via email to his personal account about four hours before the committee meeting. J. Brooken Smith, Piagentini’s attorney, said the council member wasn’t expecting the email and doesn’t remember reading it until the next morning, according to records filed with the ethics commission in response to the complaint lodged against Piagentini.
“It was at this moment that Councilman Piagentini became aware for the first time that he was under consideration for a potential employment relationship with the CEOc,” Smith said in the response documents, which were obtained by KyCIR by an open records request. “Once [Piagentini] learned of the opportunity and reciprocated by signing the NDA, he immediately ceased all activity in support of the Coalition proposal.”
Smith said that makes it impossible to conclude that Piagentini violated ethics laws and that the complaint should be dismissed. The ethics commission hired Jim Griffin, a retired Kentucky State Police detective, to lead the investigation into Piagentini, which is set to wrap up by the end of June. He declined to comment for this report.
The commission voted in late March to issue subpoenas in the investigation, according to meeting minutes. Any findings from the inquiry will be referred to the ethics commission, which will determine if Piagentini broke rules.
The investigation could lead to the commission recommending that Piagentini be removed from the council, a move that would require a two-thirds majority vote from the full Metro Council.
Piagentini did not answer questions for this report.
Legal and ethics experts say his defense is hard to believe and the investigation should continue.
It’s highly unusual for job negotiations to begin with an unsolicited and unexpected non-disclosure agreement sent via email to a personal account, said Michael Mattioli, a law professor at the University of Indiana’s Maurer School of Law.
“It's not typical for a potential employer to send an NDA to a candidate just out of the blue without some prior conversation,” he said. “Usually, NDAs are presented to potential job candidates, and they're executed during a hiring process and that, usually, is something that happens after at least some initial discussion of a job.”
Piagentini’s job is a one-year contract that will pay $20,000 a month for public policy consulting, helping the nonprofit figure out how to monetize its sector focused on aging and leading the group’s innovation committee, according to records filed with the ethics commission. The salary is about $74,000 higher than what the nonprofit’s executive director, Tammy York Day, earned in 2019, according to the CEO Council’s 2019 990 tax filing.
In the response, Piagentini’s attorney said the salary is a fair wage based on his experience and past jobs — $200 an hour for about five hours of work a day.
‘This is not the normal way’
Piagentini said in February that he’s worked for more than two decades in the health care business industry and his experience impressed CEO Council officials. He said they told him “it’d be great to work together one day” as they collaborated on the spending measure. Piagentini said he was under contract with a different organization at the time “so, we didn't discuss anything beyond just, ‘Hey, we love your background.’”
He said he didn’t know they were going to offer him a job before the NDA landed in his personal email inbox shortly before noon on Nov. 17.
The email from York Day, the CEO Council’s executive director, was brief: “Please see our mutual NDA, and let me know if you have questions or any requested changes.”
Mattioli, who teaches contract law, said the informal nature of the message implies it was not the first discussion of a potential job.
“This is not the normal way that you would communicate if you were just at the very threshold of talking about employment arrangements,” he said.
Piagentini said he opened the message the morning after York Day sent it. He didn’t know what it was about until he talked to York Day by phone, he said. Then he signed the NDA and returned it via email at 10:38 a.m., records show.
“Talk soon!” he said in the email back to York Day.
York Day did not respond to multiple requests for comment for this report.
Investigators need to interview Piagentini and York Day to determine if any discussions about the job occurred before the NDA arrived in the council member’s personal inbox, said Kathleen Clark, a law professor at Washington University in St. Louis who specializes in government ethics.
Clark also said she wonders why York Day had Piagentini’s personal email address if the two were working together on a government-funded spending measure.
She said one of the most effective ways to manipulate a government official in a corrupt or unethical way is to offer a job — either as influence or reward, she said.
“It looks terrible,” Clark said. “Not just for [Piagentini], it looks terrible for [York Day] and for the CEO Council — because right in the midst of their attempts to get this huge contract, they dangle a job offer to one of the co-sponsors.”
'Tolerance for corruption'
The city’s ethics commission opened the investigation last month after getting a sworn complaint from Kevin Fields, the executive director of the nonprofit Louisville Central Community Center Inc., on March 2.
Fields said he filed the complaint after he read KyCIR’s initial report about Piagentini’s potential conflict of interest. He also applied for the same federal funding ultimately awarded to the Healthcare CEO Council and he worries Piagentini helped tip the scales and broke the rules.
In Piagentini’s response, his attorney said the CEO Council’s project “earned Councilman Piagentini's support squarely on the merits.”
Piagentini, a District 19 Republican, co-sponsored the spending measure with council President Markus Winkler, a District 17 Democrat.
The CEO Council plans to use the $40 million in COVID-19 relief funds to train hundreds of entry-level health care workers and build a multi-million dollar tech and learning center in the Russell neighborhood, according to grant agreement records provided to KyCIR through an open records request.
In recent years, Russell has been the planned site of several high profile — and big budget — development projects. Some say the focus on the area raises concerns about displacement, profiteering and gentrification in the historically Black neighborhood in Louisville’s West End.
Piagentini should have publicly announced he was recusing himself from supporting the project as soon as he started negotiating the job with the CEO Council — and explained why, said Scott Amey, the general counsel for the Project on Government Oversight, an independent government watchdog group based in Washington, D.C.
Instead, Piagentini waited to recuse himself until the final vote and removed himself as co-sponsor just moments before the measure came up for approval at a full Metro Council meeting on Dec. 1. He didn’t disclose he was going to work for the CEO Council the next day.
Amey said public money should be allocated with complete impartiality. The allegations in this case, he said, present the appearance that Piagentini was given the job as a reward for pushing legislation and helping the CEO Council get a $40 million grant.
The investigation is necessary, he said.
“The public has a very declining perception of public servants and this type of case doesn't help,” Amey said. “ I just don't know why anybody thought that this was a good idea.”
Corruption happens across the professional spectrum — from politicians to professors, police and more, said Richard Painter, a corporate law professor at the University of Minnesota and chief ethics counsel for former President George W. Bush.
“This is the environment we live in, where there's an awful lot of tolerance for corruption,” he said.
But when it happens it should be called out, and people need to be held accountable, he said.
Painter said in this case a thorough investigation is critical and the only way to determine what happened and if Piagentini broke any laws.
And then, he said, the council should reconsider the spending measure altogether, hold another vote, and Piagentini should stay out of the matter.
