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Cashing in with credit cards

In a climate of unbridled spending, the four lieutenants to the former head of Blue Grass Airport rang up about $332,000 in charges on their airport-issued credit cards over the last three years.

Based on the range of charges to the airport, the cards served almost as all-access passes for lavish indulgences and everyday needs for the men, all of whom receive six-figure salaries.

Electronic toys, tickets to sporting events, a jaunt to a strip club and numerous cross-country trips were put on the airport's tab, according to the Herald-Leader's review of credit-card statements. Among the charges were payments for golf lessons, Christmas presents for co-workers and nearly $2,200 for six tickets to the December 2007 Hannah Montana concert at Rupp Arena.

"It is difficult to imagine how some of those expenses could be appropriate," said David Wescott, a public relations consultant hired to speak on behalf of the Blue Grass Airport board of directors.

The four officials — who reported to former Executive Director Michael Gobb — also charged tens of thousands of dollars worth of more mundane expenses, such as gasoline, meals around Lexington, dry-cleaning bills and car washes.

Those airport managers — John Coon, operations director; John Rhodes, administration and finance director; Brian Ellestad, marketing and community relations director; and John Slone, planning and development director — were among seven airport employees, including Gobb, who had airport-issued credit cards.

Last week, board Chairman Bernard Lovely moved to cancel all of the cards, a first step in what board members and city leaders say will be a reform of airport policies.

The hundreds of pages of documents, obtained through an open-records request, also show that Gobb, who signed off on the spending of his employees, rarely challenged purchases or requested reimbursements for items that seemed to have little to do with running an airport.

"Possibly in an effort to avoid board scrutiny, people may have been taking advantage of the process where the executive director reviewed expenses," Wescott said. "That is a practice that began before Bernie (Lovely) was chairman and one that has been stopped."

The Herald-Leader submitted a list of questions to the directors about specific expenses. But they routed all inquiries to Wescott, who said airport officials couldn't comment on specific charges because of an internal review and a state audit that are under way.

The $332,000 in credit-card expenses does not include charges for airline flights that the four made through travel agents.

In November, the Herald-Leader reported that Gobb had incurred more than $200,000 in travel and other expenses during a little over two years. That spending led to Gobb's suspension by the airport board, which accepted his resignation Jan. 2 after a decade as executive director.

The four directors' credit-card statements also show that they routinely lunched at the airport's expense, dining at dozens of restaurants including Azur, co-owned by Lovely, the board chairman.

The airport, run by a board appointed by Lexington's mayor, uses some taxpayer funds, such as federal dollars for construction, and received city tax money in the past. Many of the administration costs are covered by ticket and parking fees paid by anyone who travels out of the airport.

In light of the revelations of spending and the public outcry, the airport board is scrambling to quickly rework its financial and management practices.

"We would like to rip the Band-Aid off quickly, not millimeter by millimeter," said Tom Halbleib, the board's attorney.

'Supplies and equipment'

As director of planning and development since 1999, John Slone oversees construction in and around the airport.

He also gives personalized gifts to his co-workers, according to his airport credit-card statements.

For Christmas 2006, he bought a Cincinnati Bengals jacket and a Pittsburgh Steelers hooded sweatshirt for fellow directors Coon and Rhodes.

Slone listed on the $121.89 receipt from Allsports at Fayette Mall that the purchases were "X-Mas gifts" to be listed under the accounting category of "supplies & equipment."

Slone gave two other staffers candles from Bed, Bath and Beyond that Christmas.

In all, Slone charged $612 worth of Christmas gifts for colleagues over three Christmases.

Slone was not the only one generous with the airport's money. Three Nintendo Wii systems and accompanying game packages worth $2,000 were purchased on the credit cards of Ellestad, Slone and Debbie Kelly, manager of airport administration, for Christmas 2007.

Lovely has said those electronic toys were purchased at the behest of Gobb as gifts for employees.

Event tickets also were popular purchases among the directors.

Ellestad made two charges totalling $2,167 to online ticket broker StubHub in November 2007. The charges had the note "Approved by Mike" scrawled next to them—an apparent reference to Gobb.

It turned out that Ellestad bought six $324 tickets — plus broker fees and taxes — to the Hannah Montana concert at Rupp Arena that December.

He also charged $325 for four golf lessons at Man o' War Golf, a $419 Calvin Klein suit from Men's Wearhouse and five trips to the cleaners.

Several credit-card statements showed purchases of LCD TVs and DVD/VCR combos and more than $420 worth of model trains.

The airport has hosted events in the past where electronic prizes were handed out, but it's unclear whether these were used in that way.

Beer and ball games

Looking at other charges Ellestad made, it's clear he likes chai tea, room service and attending sporting events to entertain others.

Since joining the airport in August 2006, Ellestad, whose job is to promote the airport, has racked up nearly $63,000 in travel charges on his airport credit card. That total doesn't include flights paid for through a travel agency.

Last summer, he attended baseball games at the home parks of the New York Yankees, Atlanta Braves and Houston Astros, where he bought hundreds of dollars worth of beer and jumbo hotdogs.

For instance, in a three-night excursion to the Southwest last July, he rang up $1,529 in hotel, bar and food charges.

Ellestad started that trip—which was fairly representative of his spending—at the Inn at the Ballpark luxury hotel near the Houston Astros' Minute Maid Park. He made five charges at the inn's bar and had room service for dinner and breakfast.

He spent the next night in Scottsdale, Ariz. And after a $317 outing at the upscale restaurant and bar Mastro's Ocean Club on July 23, Ellestad spent the night at the Sanctuary Camelback Mountain resort, where he went to the bar, got a room-service meal and ate $11 salsa-and-chips from the mini bar.

He then stayed at the Marriott Hotel near the Dallas-Fort Worth Airport, paying $74 extra for food and drinks.

Ellestad rarely recorded the purpose for his trips on the records and usually did not submit itemized receipts from restaurants.

While he also made stops at places such as Hooters of Palm Beach, Fla., his evenings out appeared tame compared to strip-club charges on other directors' credit cards.

Coon and Slone joined Gobb in a 2004 jaunt to a Dallas-area strip club where they spent a combined $5,000, as previously reported by the Herald-Leader.

Coon also charged $168 on July 20, 2006, at Covington's Club Venus, a topless bar.

And while several directors were in Las Vegas in February 2006, Rhodes charged $702 at the swank Pure Nightclub at Caesar's Palace.

Fuel and a wash

John Rhodes, the airport's administration and finance director since 1987, has an 86-mile round-trip commute from his home in Mount Sterling.

But even that drive doesn't fully account for his spending of more than $18,000 on gasoline charges — far more than the three other directors — in three years.

In fact, records show instances when his airport credit cards were used for fill-ups twice in the same day at gas stations between his home and the airport.

For example, on Aug. 6, 2006, Rhodes, who oversees accounting, bought a total of $124 in gas at two different gas stations. He paid for nearly 19 gallons in the morning at a Lexington station and 23.5 gallons more that night in Mount Sterling.

In addition to a Visa card, the airport supplied directors with a Shell gas card and a key to the airport's gas pump to fuel their vehicles, which are supplied by the airport.

Wescott, the board's spokesman, said the directors were entitled to pay for gasoline whenever they wanted. But that provision, as well as the directors' entire compensation packages, will be reviewed by a management consultant hired by the board, he said.

The airport credit cards also kept the vehicles clean. Slone, Ellestad and Coon charged $1,500 in car washes in three years.

Ellestad, meanwhile, put more than $1,550 worth of gas on his airport Visa card during trips to Grafton, Wis., where he used to live.

He made 11 such trips, with most of the visits coinciding with holidays: Thanksgiving and Christmas of 2006 and '07, Labor Day '07 and '08, Easter 2007 and Memorial Day 2008.

Lunches and events

John Coon, the airport's director of operations since 1999, oversees more than 60 employees, including the public safety officers.

Often, according to notations he made on his credit-card statements, he would pay for public safety meetings at area restaurants: Panera Bread, Ramsey's and Max & Erma's were standbys.

Occasionally, he and the other directors would meet over lunch at more upscale places, such as deSha's Restaurant & Bar and Jonathan at Gratz Park.

In all, he charged $8,609 worth of meals in and around Lexington in three years.

He wasn't alone. Each director ate out on airport funds at least a couple of times a week.

The four directors spent a combined $1,037 at Azur Restaurant & Patio, which is co-owned by Lovely.

"I've heard them say they've gone there for lunch before," Lovely said. "I had nothing to do with that, other than it was my restaurant."

In addition to directors' lunches, Lovely said they sometimes used Azur for receptions for incoming or outgoing board members. Several of those outings, including an $800 evening, were charged to the airport credit card of Kelly, the administration manager.

Lovely said he didn't encourage them to go there.

"Oh no, never at my request," he said.

Directors described trips to Keeneland and some restaurants on their credit-card statements as "special events."

In one case, Rhodes held a $71 "special event" in his hometown on Labor Day 2006 at the Mount Sterling Cracker Barrel, which included several children's platters.

Airport officials declined to answer questions about which of the men's expenses were justified.

"We're talking with the people who were having these expenses on their cards individually, and they're having to answer a lot of questions," Wescott said. He added: "There are a lot of things ... that the board is working on to make sure this never happens again."

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