Digging In: A conversation with WDRB’s Chris Otts about Louisville nonprofit’s conflicts
Investigative reporter Chris Otts recently published an account that details a powerful local health care nonprofit’s questionable spending on businesses owned by its leader’s family members.
About two months ago, Chris Otts got a phone call from a source that suggested he take a look at the Louisville Healthcare CEO Council’s finances.
Otts, a business reporter, took a look at the group’s tax returns and had a hunch he’d found a story.
The publicly available documents showed the powerful nonprofit — known as CEOc — awarded nearly $400,000 in contracts to companies with close ties to Tammy York Day, the nonprofit’s chief executive officer.
“A lot of these connections between CEOc and for-profit businesses run by family members of [the nonprofit’s] leader were not hard to find,” Otts said.
The nonprofit has been under scrutiny for months following a KyCIR report about how the group gave Metro Council member Anthony Piagentini a consulting job the day after local lawmakers voted to give the nonprofit a $40 million COVID-19 relief grant.
Piagentini, a District 19 Republican, helped push the spending package through the council.
The story Otts investigated for WDRB unfurls York Day’s history of intertwining her family’s business ventures with the nonprofit she runs.
I talked with Otts about his investigation — and the impact it could have.
This conversation has been edited for length and clarity:
Chris, you found the nonprofit has a history of giving contracts to people with close ties to York Day. First, how much money are we talking about.
About $400,000 in total when you add it all up. But it’s important to note that we’re only talking about 2020 and 2021. These business relationships with these two entities have continued since then, we just don’t have the disclosures that would cover 2022 and what has happened, so far, this year. So, $400,000 is likely a low number, but that is what we know about.
And the bulk of it, which you detail in your story, went to York Day’s sister, Tonya York Dees, who runs an events management company. The rest went to York Day’s then husband’s software company. For people that might not follow the local business scene — what makes this a story worth putting out there?
Two things. First of all, what does somebody care about a nonprofit industry group? That’s a totally fair question. But there’s something that raises the stakes here. In 2022, as you’ve reported, the Metro Council suddenly decided to make this group in charge of $40 million in grants from the city’s COVID-19 relief funds. So, this organization is, rightly in my view, facing a higher degree of public scrutiny than it was before when its revenue was basically just the dues that these member companies were paying into it. The second thing is that nonprofits get a tax exemption from the government. That is a privilege, it is not a right. The basic idea is pretty obvious, this organization should use its tax exempt finances on its mission and no private person should be personally benefiting from those tax exempt dollars. Now, where is that line? It’s very hard to say because these are businesses that are providing services to the nonprofit. So, when you look at this story and you say — “Is any of this illegal? Is this a problem?” — unfortunately those questions are not ones that even experts in this field can necessarily answer. Would the IRS make a case of this? Possibly. Do they do that a lot? No.
You also talked to Metro Council President Markus Winkler for this story. Tell us what he said about how the investigation into Piagentini could impact the nonprofit.
Winkler told me that depending on how that case goes — the ethics charges — this $40 million grant could be rethought in some format. So, the council could be making changes to that. And, of course, CEOc’s board is a private organization and we have no right to have any visibility into what their board is doing, but I will be following and seeing if we can get any information about whether they think anything we have raised is worth responding to or doing anything about.