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Former Louisville mayor Jerry Abramson doled out $214,000 from discretionary fund

Ex-mayor's discretionary pool had little oversight


When the owners of 4th Street Live needed a stage for an outdoor celebration of the University of Louisville football team's Orange Bowl victory in 2007, they got $2,300 from a discretionary spending account controlled by Mayor Jerry Abramson.

And when Abramson decided to hold a luncheon for Louisville union and business leaders at a Washington, D.C., steakhouse, he again dipped into the taxpayer dollars at his disposal - this time writing two checks totaling $3,400.

Between July 1, 2006, and his exit from office last December, Abramson spent more than $214,000 from his discretionary fund on such things as sponsoring brunches to honor state legislators, buying $13,000 worth of T-shirts for a Hike and Bike event, putting $15,000 toward the cost of bringing the Idea Festival to town, helping support a child welfare agency and supporting a domestic violence summit.

The spending was done without any financial oversight by the Metro Council or a requirement that the organizations receiving the money report how they spent it - or that they return any unspent money.

Receipts that show what the money was spent on are nonexistent in the majority of the 60 files obtained by The Courier-Journal through a state open-records request. The files contain a request form for the money filled out by the mayor's office, and a letter notifying the recipient of the award.

Explanations of the public purposes of the spending are seldom more than a sentence on those documents. The letters accompanying the checks require only a signature from recipients, acknowledging that they got the money.

'Public purpose'

State law dictates that taxpayer money can be spent only for a "public purpose," which the Jefferson County attorney's office defines as an expenditure that "confers a direct benefit ... to a significant part of the public."

Documents for the $2,378.23 given to The Cordish Cos., for example, say simply that the money was used "To support the Orange Bowl victory celebration," which drew about 4,000 people to 4th Street Live, a complex of bars and restaurants.

Abramson said in an interview that the money was used to provide a stage. He said the request actually came from the University of Louisville, although the documentation says the checks were made out to Louisville Galleria LLC in care of Cordish.

"They called me up, said we've got all of these people putting up money, could you help us, or would you pay for the stage," Abramson said. "I said yes, it's a community thing, everybody is fired up, you guys won the Orange Bowl. Yeah, I wrote a check.

"Is the receipt for the stage in the file? I don't think so."

A Cordish spokesman called the celebration a "tremendous success" and said U of L, the city and Cordish all shared in the cost of producing the event. He did not respond to a follow-up question asking how much Cordish contributed.

Abramson, who is a candidate for lieutenant governor on Democratic Gov. Steve Beshear's re-election ticket, defended the discretionary spending and said it had been a staple of city budgets for years before he took office in 1986.

He also said his discretionary fund wasn't a secret - that he put the expenditures on the city's website when the Louisville Checkbook was created at the behest of Metro Council Republicans in 2009, and that he always made his discretionary account a line item in the city budget.

"I'm not stepping back from anything I did," Abramson said.

But public policy experts say such spending is fraught with risk if receipts and invoices are not carefully documented.

Phineas Baxandall, a senior analyst at the nonpartisan U.S. Public Interest Research Group, told The Courier-Journal that such spending needs "extraordinary levels of transparency" because there is "extraordinary risk of petty corruption."

Discretionary spending in metro government has come under increasing scrutiny since Louisville Metro Councilwoman Judy Green had two ethics complaints filed against her this year - one of which involves her handing of a grant to a nonprofit agency from a discretionary account available to council members. The council has started proceedings that could lead to Green's removal from office.

Aside from the mayor's discretionary account, each of the 26 Metro Council members controls $205,000 in discretionary funds annually. A recent Courier-Journal review of spending records from those accounts shows that the council has spent more than $110,000 on food for public events in the past 31/2 years. The council's business office acknowledges that it has no way to police the spending and make sure food isn't being wasted or taken home by council members.

At least some of the food purchased by council members was given to potential voters as the members were running for re-election.

D.C. steakhouse meeting

Abramson said in an interview this week that Shannon Tivitt, his chief of staff, kept files on each funding request that was granted money.

But an additional request for documentation from the city's Office of Management and Budget produced only a set of form letters that Abramson wrote as invitations to the steakhouse luncheon in Washington, and 40 thank-you notes written to attendees.

Abramson said the luncheon, with food prepared by a chef at Charlie Palmer Steak, was worth every penny and that "I would do it again."

"We were pitching money for bridges," for public housing redevelopment grants and highway expansion, Abramson said.

"Also, it was a month after John Yarmuth had been elected to Congress. I invited him to the luncheon to introduce him to these folks and (told them) John and I would be working hand-in-glove on these things."

The thank-you notes show that the guests included executives from Kroger, General Electric, Louisville Gas & Electric, Jewish Hospital, CSX Railroad, Churchill Downs, BellSouth, UPS, Ford, Union Pacific, Baptist Healthcare, Kindred Healthcare, University of Louisville and Greater Louisville Inc., the city's chamber of commerce.

"So these were people who couldn't afford to pay for their own lunch?" former councilman and mayoral candidate Hal Heiner asked when told of the attendees.

Heiner, who was on the Metro Council for eight years and lost to Mayor Greg Fischer in the 2010 mayor's race, said a mayoral discretionary account is a legitimate need in Louisville. The money, however, should be distributed through city departments, and documentation of the spending should be required, he said.

"It needs to be done on a fully transparent basis," Heiner said. "And there should be an accounting to the council on how those dollars were spent."

In an email, Yarmuth called the luncheon "very helpful" in meeting community leaders that he would later work with on issues such as getting federal investment in local Ford and General Electric plants.

"If you judge the value of the expenditure by the progress, particularly in terms of economic development, we've had since then, I'd say it was worth it," Yarmuth said in the email.

When asked through an email if those contacts could have been made someplace other than a Washington restaurant, Yarmuth's spokesman replied: "I think he speaks to the value of the event in his statement."

Carmen Hickerson, GLI's vice president of government affairs, attended the lunch but said in an interview that she couldn't remember the meeting agenda that day.

"We just went," she said. When asked whether the food was good, Hickerson said: "If it was Charlie Palmer's, it was good. That's the place to go in Washington."

Lax record-keeping

This isn't the first time Abramson's administration has been accused of lax record-keeping.

A 2010 audit of the city's finances, performed by a private company on behalf of the state, found that the city had no system in place for checking the millions of dollars in grants handed out every year by Metro Council members. That audit did not address spending from the mayor's discretionary fund.

Auditors consider grant compliance work to be a crucial step in ensuring that public money is being used appropriately. The lack of oversight was cited as a major problem in the audit.

Fischer's administration has since instituted a policy that discretionary grant money will be distributed quarterly, and the money will only be given if the agency is up to date with its financial reporting.

Abramson said the grants weren't monitored because his administration felt they were the council's responsibility.

"We made the conscious decision, right or wrong, that it was (the council's) call," Abramson said. "We did not follow up. We thought that was part of their responsibility to ensure it was being handled properly, and we didn't take a position.

"We thought that was a legislative matter."

Abramson also came under fire in the mid-1990s for not documenting expenses during trips out of town.

A 1994 Courier-Journal review of his expenses found that the mayor did not fill out required travel forms, used his city credit card to pay for things such as use of limousines, but never turned in receipts to justify the expense.

One organization that did routinely turn in documentation for use of the mayor's discretionary funds was Jefferson County Public Schools, which put on an annual academic competition called the Mayor's Cup thanks to $4,000 checks from Abramson.

The documents show that JCPS bought trophies, medals and ribbons for the participants, and it routinely turned in a list of students in the competition.

The Mayor's Cup competition is the only discretionary fund expenditure so far by Fischer.

Fischer spokesman Chris Poynter said the $4,000 request came in shortly after Fischer took office, and he decided to fund the event because it had received city sponsorship in the past.

New policies in place

Poynter said Fischer thinks the $41,000 discretionary fund for the mayor is necessary, but has instituted new policies for the money's use. He will require recipients to provide invoices or receipts showing how the money is used, will provide reports to the Metro Council on his use of the money and will place on his website a link to a database of discretionary fund spending.

"The fund is important because if it's not already in the budget, we wouldn't have any money for it," Poynter said.

For instance, the mayor's office is considering doing a poll to gauge residents' attitudes about the city-county merger that created Louisville metro government.

Abramson spent discretionary money - in amounts large and small - on many other events, such as $2,000 for a domestic violence summit in Louisville; $2,500 for a study on historic preservation; $35,000 for general operating expenses for Maryhurst Inc., which is a child welfare agency; and $10,000 to Churchill Downs for Derby Day brunches.

Abramson also provided a check for $12,935.59 in June 2008 for T-shirts to be given away to participants at one of his signature events - the Mayor's Hike and Bike.

"It was going to be a sunny day, there's going to be 6,000 people ... so you see the allocation ... made for the T-shirts," Abramson said.

He said it was much more common for him to give money to nonprofit agencies with programs to help the poor, youth or those in need after disasters.

"There's one in there for a library initiative - I wrote a check. I gave $800 to turn the lights on for the Little League," Abramson said. "If I had some money left over, I was there for them."