When the Louisville Metro Council passed new rules this year requiring officials to disclose more about their finances and potential conflicts of interest, supporters framed it as a victory for transparency and good government.
The ordinance, which was authored by District 9 Council member Bill Hollander, D-Republic, requires city officials to add sources of income, Kentucky businesses they own and investment properties to their annual financial statements . The legislation made it clear that candidates for local office must also file a financial statement with the Louisville Metro Ethics Commission.
When the ordinance came up for a vote on March 4, the Metro Council unanimously approved it.
“What we’re doing here is identifying and correcting what I think is a weakness in the current ethics laws,” Hollander said before the vote.
However, a review of the new financial disclosures by WFPL News found that many respondents wrote “N/A” or “none” for most questions on the form. Sometimes these answers conflicted with publicly available information. And more than three months after the April deadline, more than two dozen officials and candidates for local office have yet to file their disclosures.
Officials say they had no guidance on the new forms
Local policymakers and city officials are already required to recuse themselves from making legal or contractual decisions if they have a conflict of interest. But previously, there was no mandate to report much on their finances, making it difficult to know when a conflict existed.
One of the new fields on Louisville’s financial disclosure form asks officials and candidates to list “any source of income” above $5,000 a year for themselves and their spouse. Eight Metro Council members wrote “none” or “N/A” in response.
David Waskey, an attorney and chairman of the city’s Ethics Commission, said those representatives should have at least disclosed their government salaries. Each Metro Council member currently earns $51,258 a year.
Some board members listed additional occupations for themselves and their spouses, but did not disclose compensation for that work. They also did not disclose the type of income they receive, such as a salary, commissions or business profits.
One example was Democratic District 12 Council member Rick Blackwell, who noted on his form that he is the president of DeSales High School, a private Catholic school in Jefferson County. Blackwell wrote “N/A” for income over $5,000. Similarly, Republican Robin Engel, who represents the 22nd District, did not claim any income above the reporting limit despite being a senior sales representative for RJ Schinner Co.
Another council member, District 7 Democrat Paula McCraney, owns two businesses, P Mc & Associates and The Traveling Boutique, but also did not disclose whether she made more than $5,000 from those businesses last year.
When contacted by a reporter, both Blackwell and McCraney said they misinterpreted what the question was asking. McCraney added that she received no guidance or training on how to fill out the form.
“We’ll do whatever it takes,” McCraney said. “But we should have received more training, obviously.”
At least two Metro Council members, including Blackwell, said they filed amended financial disclosure forms with additional information after receiving questions from WFPL.
It wasn’t just council members who failed to provide basic information about the new forms.
Mayor Greg Fischer, a Democrat, also wrote “N/A” when asked about his and his wife’s sources of income. Fischer receives an annual salary of $140,000 from Metro Government. His wife, Dr. Alexandra Gerassimides, is a pediatric pathologist. According to Norton Healthcare, Gerassimides provides services for the company and is employed by an outside medical group.
When asked why Fischer did not disclose his household’s sources of income, spokeswoman Jessica Wethington said the mayor “made an unintentional mistake.”
“The mayor is correcting the error and will submit an amended form,” he said.
Wethington added that Louisville Metro is considering providing training on filing annual financial statements.
See the financial information for Metro officials provided to WFPL here.
The forms filed by Fischer and some of the other board members were in stark contrast to how other Metro officials handled their financial disclosures. District 8 Democratic Councilwoman Cassie Chambers Armstrong said she wasn’t sure how to answer parts of the form either, but chose to err on the side of transparency. He even revealed a $500 speaking fee he received from Clemson University, just to be safe.
“With any new system, there’s going to be miscommunication, there’s going to be mistakes as we work through the kinks, but I think the public should expect us all to make a good faith effort,” he said.
Hollander, who authored the legislation expanding the disclosure, went beyond the requirements, detailing the mutual funds and retirement annuities in which he has invested. He also revealed that he is a member of the board of the local non-profit TreesLouisvillealthough he has no financial interest in the organization.
He said he doesn’t think the mistakes made by other officials were nefarious or the result of people not taking ethics seriously.
“I think because of the relatively short time frame and the changes in the law, there was significant confusion among some people about what they had to do and when they had to do it,” he said. “This is something that can be fixed moving forward.”
Some Metro officials and candidates did not file the forms
Although Metro officials and candidates for local elected office were supposed to file their financial returns by April 30, the Ethics Commission says 26 people have yet to file.
Republican and Democratic candidates who ran in the May 17 primary election were not even notified of the requirement to file their returns until May 11, according to reports. a recent WDRB report. Waskey, the chairman of the Ethics Commission, blamed delays in gathering the new forms and getting guidance from the Jefferson County District Attorney’s office.
The Commission sent certified letters to the 26 people who had not completed their financial statements during the first week of August, a full three months after the original deadline.
Waskey declined WFPL’s request for an interview, but said by email that he was aware of the findings that a number of officials failed to disclose the sources of income for themselves and their spouses. He said the Commission has already started making changes to the form.
“Compliance with next year’s disclosure form will be achieved through better communications, required annual training of Metro officers and as simple as adding a statement to the form to contact the Commission with any necessary clarifications or questions,” he said.
Metro officials and candidates who fail to file a financial disclosure within 10 days of receiving the certified notice face a fine of $25 per day, up to $500. But even if someone lies or withholds information that would be important to identifying a conflict of interest, the Ethics Commission is unlikely to catch them.
If there is an obvious omission, Waskey said the Commission can contact an official or candidate to amend their form. Otherwise, the agency assumes that disclosures are complete and that everyone is acting in good faith. All officials with errors on their forms who were contacted by WFPL said no one had notified them.
Waskey said the Ethics Commission will only investigate major omissions if someone files an official complaint, “none of which have been filed so far.”
Is the Ethics Commission ready for more responsibility?
In addition to expanded financial disclosures, Metro Council is currently considering other transparency-focused ordinances that give more responsibilities to the Ethics Commission.
Another proposal written by Hollander would require anyone paid to influence Metro Council decisions to register with the Commission as a lobbyist. They should also disclose who their customers are and how much money they are spending on advertising for or against a local government action.
Members of the Council’s Government Supervision and Audit Committee, which is currently debating this proposal, have questioned whether the Ethics Committee has the capacity to take on these new functions.
The Commission is a volunteer body whose seven members are appointed by the mayor and confirmed by the Metro Council. They were supposed to meet once a month, but the first four meetings in 2022 were canceled. The Ethics Commission’s only full-time employee is Celia Gregory, Human Resources Manager
At a recent Government Oversight Committee meeting, 21st Democratic District Councilwoman Nicole George asked Gregory how much time and resources had been devoted to complying with the new financial disclosure rules, and how much more time would be devoted in the lobbyist register.
“I had to stay up a few nights late, but not too late, to do it,” he said. “In the beginning, just trying to get in touch with everybody, it took a few extra man hours.”
Gregory added that “maybe it would take a second” employee to handle the new responsibilities.
Currently, the Ethics Commission does not have its own budget and any expenditure must be approved by the city’s Human Resources Department. These expenses also come from the human resources budget.
Anyone considered a lobbyist would not have to register with the Commission until about six months after the ordinance is passed, giving the agency time to create and distribute guidance documents. Hollander said that, in retrospect, he wished he had built in a similar turnaround time for the expanded financial disclosures.
Hollander also said he believes the Ethics Commission has the ability to handle the new responsibilities he wants to give them. He said if it turns out the Commission needs additional staff or a budget of its own, Metro Council has the ability to do that.
“If there’s a need, the people of the Metro Council will have to decide if that’s something they want to invest in,” he said. “Certainly, I think it’s worth investing in transparency.”
The Government Oversight and Audit Committee is expected to continue discussing the proposed lobbyist registration ordinance at its August 30 meeting.