Herald-Leader Editorial

Public money, public scrutiny: Foundation's murky deals need airing

August 28, 2013 

A word of advice to everyone who runs anything that uses taxpayer funding: Secrecy and public money are not a good match. If you want one, you can't have the other.

That's something Jas Sekhon, the former head of the Bluegrass Area Deveopment District, who is now its landlord through a mysterious non-profit he established, just doesn't seem to get.

So much so that he refuses to account for the way his nonprofit, the Bluegrass Industrial Foundation, is spending the hundreds of thousands of public dollars that flow into it from the Bluegrass ADD.

The office of State Auditor Adam Edelen has already begun looking into questionable spending and procedures at the Bluegrass ADD. These new revelations, outlined Sunday by reporter Linda Blackford, add further urgency and lines of inquiry to that examination.

The public deserves a full accounting of where the $30 million a year in public money that flows into the Bluegrass ADD finally winds up, and who benefits from it,

The auditor's inspection began shortly after Lenny Stoltz II, who followed Sekhon as the agency's executive director, was forced to resign in June (albeit with a generous severance package and a deal to come back as a consultant) in the wake of questions about the agency's acquisition of property and its lack of transparency.

Sekhon, who ran the Bluegrass ADD from 1971 to 2005, set up the Bluegrass Industrial Foundation in 1982, which bought the building at 699 Perimeter Drive in Lexington in 1993.

The Bluegrass ADD has been the primary tenant there since 2009, paying more than $1 million in rent during the ensuing years, contributing heavily to the foundation's annual profits of $60,000 to $70,000 a year.

What does this nonprofit foundation — meaning it doesn't pay taxes to contribute to the public monies that fill its coffers — do with that money?

Not quite clear, and Sekhon prefers that it remain that way.

Blackford discovered through federal filings that Sekhon himself gets annual pay of almost $30,000, and over three years about $115,000 has been spent on travel, $25,000 for conferences and almost $50,000 for "prospect development." The foundation's purpose is industrial development in Central Kentucky but exactly what it does to promote that is also not for public consumption, Sekhon says.

Equally murky is another relationship between the two entities involving the Paris-Bourbon Economic Development Authority. In 2009, the year the Bluegrass ADD became a major tenant of the foundation, the foundation paid the ADD $30,000 to help staff the Bourbon County agency. That flipped in the next three years, when the district paid the foundation just $5,000 a year for the same work.

Murkier still is the news that the head of economic development work at the Bluegrass ADD, said that as far as he knew, his agency hadn't had a contract to provide services for Bourbon County for "some time."

We've seen the results before of the combustible combination of large sums of public money, excessively close relationships among individuals and agencies and a penchant for secrecy.

It might not be a pretty picture, but it's one every taxpayer has a right to see.

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