Louisville nonprofit at center of ethics inquiry loses $40 million federal grant
Louisville Mayor Craig Greenberg recommended local lawmakers divert $40 million in federal COVID-19 relief funds from a local health care nonprofit and move them to city parks and libraries.
At a press conference Friday, Greenberg said he terminated $40 million in contracts with the Louisville Healthcare CEO Council. That group hired Metro Council Member Anthony Piagentini after he helped the company get the federal grant package.
The unprecedented announcement comes the day after the Louisville Metro Ethics Commission found Piagentini, a Republican representing District 19, violated local ethics laws by seeking a job with the powerful nonprofit while he was pushing the grant proposal through Metro Council.
The commission found that Piagentini “took advantage of a perilous moment in government finance and did so with the intent to personally enrich himself.”
Greenberg said redirecting the money will help restore public trust.
“As public servants and elected officials, it’s our responsibility to reserve and uphold the community’s trust in our government and in ourselves,” he said at the press conference at Metro Hall on Friday.
He said he alerted officials at the U.S. Department of the Treasury about his decision. The federal department administered the COVID-19 relief funds.
Louisville received more than $388 million from the federal American Rescue Plan — which sent billions of dollars to cities across the country in the wake of the COVID-19 pandemic with the intent to help reinvigorate local economies.
The $40 million grant awarded in December 2022 to the Healthcare CEO Council was the biggest single award issued by the Louisville Metro Council.
The group planned to use the money to train hundreds of entry level healthcare workers and establish local health care-focused entrepreneurs. But the group has been mired in controversy since the Kentucky Center for Investigative Reporting first revealed they hired Piagentini just one day after the Metro Council voted to award the funding.
Greenberg is recommending the Metro Council reallocate $24 million of the funding to the city’s parks department and local libraries. He wants $14 million of that to go towards building new playgrounds, basketball courts, community centers and other stalled maintenance projects at local parks. And he wants $10 million to help complete projects at libraries in Fern Creek, Parkland, Portland and downtown.
“As a result of this new investment, we will be stronger,” he said. “We will not let the unethical actions of a couple of people get in the way of that.”
A spokesperson for the Healthcare CEO Council did not immediately respond to a request for comment.
Greenberg said the nonprofit’s leaders support the decision and are collaborating with his administration.
He said the remaining $16 million tied to the grant was set to be directed to other nonprofits that were a part of the Healthcare CEO Council’s project, including the Louisville Urban League, Metro United Way, and AMPED Inc.
Greenberg said he will urge the Metro Council to “recommit funding to these organizations so they continue their important work to educate and train the next generation of leaders.”
Officials with those groups did not immediately respond to a request for comment.
Metro Council president Markus Winkler, a District 17 Democrat, said any COVID-19 relief funding decisions are up to council members.
“Will we go with his recommendations? Not sure,” he said. “But they are projects that historically have had broad council support.”